Web Metrics

Web AnalyticsWhy Measure?What Can We Measure?Who Measures?

Why Measure? Return on Investment

Most common reason for establishing metrics is to assess the effectiveness of what you are doing. (Source: Iconocast, 9/02/98)

To indicate progress towards a goal.

What Metrics? "Which of the following metrics does your

organization use to measure site activity?"

Metric %Unique visitors 59Page views 57Unique visits 50Repeat visitors 38Referral pages 32Entry/exit pages 26Browser type 22Top-level domains 20None of the above 15

Source: Nov. 2000 ICONOCAST Inc./InsightExpress

Why Measure? Track interest in content Examine patterns of visitor activity Monitor effectiveness of advertising

campaigns Track the success of promotions and

how they lead to transactions.

Who Measures? Traffic Analysis

Log files Advertising Servers

Advertisers check on results of campaigns

Auditing Third-Party oversight

The ClickstreamTracking User Activity "the database created by the date-stamped

and time-stamped, coded/interpreted, button-pushing events enacted by users of interactive media controlling their systems via remote control channel changers, alphanumeric PC keyboards and mice, numeric keyboards of PDAs and similar devices, and voice command of screen media." (CASIE)

• Coalition for Advertising Supported Information and Entertainment, an advertising industry group.

Measuring User Activity Hits, Files, Page Views & Visits

Hits correspond to physical files served graphics intensive pages show more

hits (HTML pointing to lots of gif or jpeg files)

an index of server load not a reliable indicator of usage.

Page views also called impressions and exposures.

a logical measure of usage based on what the user receives.

Visits a single user session perhaps the most useful indicator

but difficult to track unless cookies are used.

Requests and Impressions Internet Advertising Bureau --"

METRICS AND METHODOLOGY" (9/97)

Careful to draw the distinction between what is requested and recorded on the server side versus what is actually delivered to the client (impression).

Tracking requests "The requested elements can be

fulfilled from a number of locations:

1. the visitor's local cache,

2. the ISP's proxy server,

3. the publisher's Web site,

4.or not at all -- images turned off, connection terminated,etc."

Standard Definition of Terms Internet Advertising Bureau

IAB Guidelines (PDF)

Visitor Management ToolsVisitor Management Tools

Tool Feature Benefit

Hit counter Server load analysis

Visit Tracking Visit length

Path Analysis Visit patterns

Time-of-day use Visit patterns

Keywords used User origination

Site analysis

Referrer Logs User origination/destination

Cookies Ad rotation based frequency, platform

Time-of-day use Time-of-day serving

Page Views Visit patterns

Impressions Ad-response profile

Clickthroughs Ad-response profile

Keyword used Personalized ad

Ad Server

Referrer Logs Personalized ad

Cookies Content Profile

Pageviews Content Profile

Click-throughs Content Profile

Personalization

Keywords Content ProfileSource: Iconocast, 10/07/98

CPM

Cost Per Thousand CPM is the cost to reach a thousand

people. Sample CPM Rates Average CPM ($20-30)

CPM vs. Performance-based Pricing

Reach How much of the total potential

audience without duplication does a site capture?

Nielsen Top 25 Web sites

Stickiness How long do users remain at a site? A pattern of usage measured in

Time Pages

Games and Auction sites are sticky; users stay on the site for a long time.

Click-through Rate (CTR) Advertisers calculate cost-per-click:

how much it costs to advertise divided by the number of users who actually click-through in response to the message.

Click-through initially averaged higher than it does today. Down below 1%.

Publishers argue that click-through rate fails to account for value of an impression.

Trial Use Number of people who

Receive offer Respond to offer Convert to customer

Advertising-to-Sales Ratio (A/S) Computer industry spends 1.8% of

its sales on advertising Online businesses might be 14% AOL = 12%; CNET = 25%; Yahoo =

49% (41 million in net revenue; 20 million spent on marketing and sales.)

Cost-per-sale (CPS)

Average Marketing cost for each new account

Company Cost-per-Sale

CDnow $40

EarthLink 75

America Online 93

Credit card companies 90-100

Long distance telephone companies 100

Mortgage lenders 100-250

Advertising Messaging Objectives Increase Brand Awareness Encourage trial of a service Promote a product offer Identify target customers Close a transaction

Source: Iconocast, 9/02/98

 Amazon’s Amazing Numbers “Its revenues doubled but its net loss

in the period was $197 million, up more than four-fold from $45 million it lost in the same quarter last year.”

Shares plunged 6.5%, wiping out 1.6 billion of Amazon’s market value.

• Source: Gretchen Morgensen, Market Watch, New York Times, 10-31-99

Revenue Per Sale Declines While Cost of Sale Rises Revenue per customer declined from

$40.32 in 3rd quarter of 1997 to $27.16.

Revenues per new customer declined almost 20% from $51.68 in 1997 to $41.51 today.

Cost per customer has risen 10.2%, from $32.73 to $36.08.

• Source: Gretchen Morgensen, NYT

Ameritrade’s Costs Cost to sign up a new user have

tripled from the $157 per customer in the third quarter of 1997 to $451 in the fourth quarter.

• Source: Gretchen Morgenson

Online Advertising How Much? $1.46 billion for the second quarter of 2002 in US. A 4.1 percent decline from Q1 2002, and a 21.9 percent

decline from Q2 2001. The first six months revenue for 2002 totaled $2.98

billion, off 20.8 percent from the comparable period of 2001.

Source: IAB Press Release 10/15/02

Advertising By Segment

Q2 – 2002 Q2 - 2001

Consumer 32% 30%

Computing 19% 18%

Financial Services 14% 13%

Media 12% 10%

Telecom 7% 8%IAB and PWC

Consumer Segment

Q2 – 2002 Q2 - 2001

Retail 44% 51%

Auto 18% 11%

Music 12% 10%

Travel 15% 11%

Entertainment 4% 5%

IAB and PWC

Advertising Consolidation Top 10 sites = 76% of all ad dollars. Top 25 sites = 89% Top 50 sites = 97%

IAB and PWCIAB and PWC

Types of Advertising

Q2 – 2002

Q2 – 2001

Banners 32% 36%

Sponsorships 24% 28%

Classifieds 15% 16%

Key Word Search

9% 3%

Slotting Fees 8% 8%

Other 12% 9%

DoubleClick Largest Ad-related Internet company

An advertising network Ad server technology (DART)

Additional Resources: Cyberatlas Project 2000 (Novak and Hoffman)

New Metrics for New Media (1996) Flow model (1997)

MediaMetrix Ipro – Internet Profiles

Chronology Nielsen Net Ratings

Two Approaches

Rich Media Ads Will Rich Media Win the Day?

Google’s Adwords Eric Schmidt