Defining Web Analytics: Market Intelligence
How do you know growth is good enough and you're maximizing potential?
How do you know growth is good enough and you're maximizing potential?
My previous column outlined the need for measuring and optimizing Web site performance to become a more holistic, consumer-focused discipline rather than a purely quantitative analysis of data from a Web analytics tool. An effective measurement strategy for optimizing site performance has four key components:
Today, let’s look at the meaning of “market intelligence.” Market intelligence provides the context for a business’ performance. To ensure the marketing plan operates in the right context, you must understand how the external world behaves and develops. The kind of things you might want to know include:
This type of information helps an e-business create a picture of the environment it operates in:
Consider the following U.K.-based scenario. Assume the table below represents the site-centric performance of an online retailer over a six-month period:
March | September | Change (%) |
|
---|---|---|---|
Site unique visitors | 1,270,000 | 1,397,000 | 10 |
Orders | 44,450 | 50,228 | 13 |
Sales value | £2,750,000 | £3,162,500 | 15 |
What conclusions might you draw from these results?
On the surface, these results look quite positive. Over six months, traffic is up 10 percent; orders are up 13 percent; and order value has risen 15 percent. Also, the conversion ratio (percentage of visits with an order) has improved marginally, as has average order value.
Let’s add some market intelligence to our site-centric perspective:
March | September | Change | |
---|---|---|---|
Site unique visitors | 1,270,000 | 1,397,000 | 10% |
Orders | 44,450 | 50,228 | 13% |
Sales value | £2,750,000 | £3,162,500 | 15% |
Total number of people online | 22,350,000 | 26,149,500 | 17% |
Reach | 5.7% | 5.3% | -0.4 pts |
Visitors to e-commerce sites | 13,180,000 | 15,947,800 | 21% |
Online retail sales index | 275 | 371 | 35% |
Now the picture isn’t quite so rosy. Overall traffic growth lags behind the growth in the overall number of people online and well behind the growth in traffic to e-commerce sites. Additionally, sales growth experienced by the retailer is significantly below that reported by his peers.
Although growth is good, it isn’t good enough. And that’s the point. When markets are generally still growing organically, as they are in Europe, how do you know when good is good enough and that you’re maximizing potential? By tracking what the market is doing and benchmarking against your competitors.
Typically this type of market information is obtained from third-party providers; companies usually don’t have the opportunity or resources to create this type of analysis themselves. There are a wide variety of sources available. Even the answer to a simple question, such as “How many people are online?” requires careful framing or interpretation:
Depending on the answer needed or the way the data are collected, you’ll get a wide range of estimates. You must understand how the data have been sourced and what you’re dealing with.
Some primary market intelligence sources include:
Market intelligence brings context to the site-centric world often inhabited by digital practitioners. It allows you to understand and assess your business’ performance in the context of the overall market’s development and your competitors’ performance.
Next, user profiling and some of the methods and approaches to understanding who your visitors are and what they think.