Metrics and Analytics Decoded!
What analytics are businesses able to pull?
This may seem like a simple question, but there are so many different responses that the answer itself can be overwhelming. That’s why we’ve put together a short guide to, hopefully, illuminate the high points—the analytics and metrics that you most need to know in order to get the full picture of how your business is performing online. As a business—small or large—analytics are going to drive many of your digital decisions, so getting an idea of what type of data is out there is a natural first step.
This is your primer on metrics and analytics, including the basics of how to measure online performance and the terminology you need to know.
Gathering the Data
Tracking Web Traffic: Who is Coming to Your Site, and How Long are They Staying?
Speaking generally, Google Analytics (GA), HubSpot, or similar tracking software are obvious choices and imperative for website analytics. This will help you measure campaign performance, visitor traffic, demographics, and more. You can get more advanced with GA—incorporating filters, goal tracking, eCommerce integrations, and other tricks—but at least getting it running in its basic form is a must for any company. There are thousands of tutorials out there, dashboard templates, etc. to get you up and running quickly.
If you’re running a digital shop—check out the Enhanced E-commerce option.
Tracking Paid Campaigns: Are You Getting Your Money’s Worth?
Web Analytics Software (like GA) is going to be your staple source of information regarding users on your site. Alternatively, if you’re running digital advertising campaigns on AdWords, Facebook, Twitter, Instagram, etc. you’ll need to utilize the individual reporting tools for each to see what’s happening before the user gets to your site.
Each advertising network has their own reporting platform (Facebook/Instagram are conveniently housed in the same, thankfully) that can be accessed directly. There are more advanced integrations that allow for end-to-end tracking—namely the Facebook Pixel, which will help you track the full lifecycle of a customer’s behavior from the time they interact with your ad to their final destination on your website.
Focusing on the Metrics that Matter
It’s easy to analyze the wrong metrics and it usually leads to uninformed—and typically bad—business decisions. There is an abundance of information floating around the web discussing which metrics are the most important and almost all of it is misleading. At Michaels Wilder, we’ve settled on a few “must haves” for our analysis when it comes to web traffic and digital advertising.
Web Traffic Metrics (with Necessary Filters)
Sessions refer to the individual visits to your website, including all page views, events, transactions, and other interactions. A look at your number of sessions will gives you the best snapshot of your traffic growth (or decline) over time.
Average Session Duration
Everyone wants users to spend more time on their site—regardless of industry, goal or type of landing page—which is why we think it’s a pretty important metric for measuring success. Keep in mind that if you’re using GA, the software does not count time for the last page viewed during a session, which means that the average session duration will tend to be skewed lower than the actual amount of time people spend on your website.
This metric shows you an average of how many different pages a visitor views per session. A big caveat here: if you’re building a standalone landing page with no internal links, you shouldn’t even look at this metric. If you’re expecting normal engagement with your site (browsing), this is a great metric for gauging the interaction level of your target audience.
Goal Rate (i.e. Form Fill)
First off, a goal doesn’t have to be the sale of a product! Within GA, for instance, you can define goals (whether that’s filling out a form, navigating to a specific page, or purchasing an item). These conversions will be your ultimate measure of success.
Your Goal Completion will be counted when a user converts for a specific goal. However, it will only be counted once per session (meaning that multiple conversions within a single session only count as one). A Goal Value is an optional metric you can assign to each goal. This can represent an actual dollar amount, an estimated value, or a symbolic value. Establishing goals early on and (if you can) giving these goals monetary values will help you calculate Return on Investment (ROI) across the board.
Bounce Rate is perhaps one of the most misunderstood metrics, so be careful with this one. As defined by Google, “A bounce is a single-page session on your site. In Analytics, a bounce is calculated specifically as a session that triggers only a single request to the Analytics server, such as when a user opens a single page on your site and then exits without triggering any other requests to the Analytics server during that session.” High bounce rates can be expected on a single landing page with no internal links. Traditional pages, however, would ideally drive lower bounce rates.
This is just like it sounds. These are pages where the user left your website. You might expect users to leave on certain pages (e.g. after submitting a form and landing on a thank you page). Other pages you might not expect (or want) them to leave—like your homepage.
Digital Advertising Metrics
Quality Score (AdWords Only)
When analyzing the performance of your keywords, make sure you can see the Quality Score column. (This is typically disabled by default.) Quality Score is out of 10 and measures how effective a keyword is within your Ad Group. It’s somewhat of a snowball effect as well. For higher Quality Scores, you actually pay less to achieve the same placement as a lower Quality Score keyword. For lower Quality Scores, you might have to inflate your bid to increase your impression share and position. Quality Score is calculated by an algorithm that analyzes:
- Click-through rate (CTR)
- The relevance of your ad text
- Landing page quality and relevance
- Relevance of the keyword to the parent ad group
- Historical AdWords account performance
While Google is tight-lipped on the exact formula, the CTR is definitely the most heavily weighted variable, and we’ll get to why in a bit.
Cost Per Conversion
An obvious but important metric. Conversions can, again, be customized to a specific goal like landing on a specific URL, placing a call, checkout, and more. Depending on your goal, this number can help you monitor your campaign ROI.
Truly the most important metric in this section. A conversion, of course, can refer to any action you want a user to take—whether that’s making a purchase or signing up for a newsletter. Your number of conversions is then divided by the number of people who view your ad to get your conversion rate.
Conversion rate optimization (CRO) is the process of improving that metric by hypothesizing and testing why users aren’t converting. This usually involves A/B testing to figure out which version of an ad yields better results.
Maybe the #2 metric in terms of importance, the CTR measures the number of clicks you receive on your ads per number of impressions, in other words, (Total Clicks on Ad) / (Total Impressions) = Click Through Rate. Google AdWords offers a price discount for ads that offer highly relevant content to searchers. Google, therefore, gives higher Quality Scores to ads with high click-through rates. So, not only is CTR is the most vital metric to understanding if your ad itself is relevant and generating engagement, it may also help you save money.
Cost Per Click (CPC) or Cost Per Thousand (CPM)
This is simply the cost you pay each time someone clicks on your ad or for every thousand impressions.
Another warning: We’ve seen too many clients lean heavily on this metric as a performance indicator. Only use this metric to calculate your ROI minus the “expense” of the click. CPCs fluctuate wildly and do not always indicate strong or weak performance in either direction. There are too many variables and too many differences between industries to make blanket statements. We like to use anecdotes to bring this point home.
Imagine your CPC is $20—pretty high right? But what if in that campaign you’re achieving a 9% CTR (very high) and a 12% Conversion Rate (unheard of) which ultimately gave you a 500% ROI. Are you going to stop the campaign because the CPC was too high? No, you’re not. In fact, you may sell everything you own and invest it all. This is an extreme example of course, but you can see how there’s more to the story than just CPC. Don’t fixate, and don’t number chase!
Pulling It All Together
There are many ways to view and analyze digital advertising analytics, making it difficult to sift through the noise. The multitude of integration techniques and options creates a problem with too much information scattered across too many platforms. At Michaels Wilder, we organize the information and the platforms into a centralized dashboard. Through our dashboard, we can isolate and view Facebook Ads, then immediately go back to a summary view to get an idea of our performance in an aggregate view across Facebook, AdWords, Twitter, LinkedIn, and so forth. Creating a centralized view of your analytics is much more effective than logging into 10 different platforms every day to check on campaign performance. Take our word for it.
Having the “data” to analyze your digital presence is not enough. You need to know what to do with the data that is available. Create goals and decide how you plan to measure them using the tools available before starting your campaign. And, as always, when in doubt, bring in an expert! If you need help with analyzing your digital presence, Contact Us today for a quote.