I have known a lot of com­pa­nies that spend a tremen­dous amount of time on their ana­lyt­ics. They tweak their tags, they build cus­tom dash­boards, they set up auto­mated report­ing, and they have busi­ness ana­lysts doing stud­ies in the data on a reg­u­lar basis to find inter­est­ing insights. This is all as it should be. The first rule of ana­lyt­ics is that it doesn’t do you any good unless you study it and share it.

How­ever, it is always odd to me when I see a com­pany that has found some very com­pelling insights in their ana­lyt­ics but they have yet to act on it. They may have even done a study to esti­mate how much money they could be mak­ing if they just improved a par­tic­u­lar top entry page’s bounce rate, for exam­ple, and it could be worth mil­lions in incre­men­tal rev­enue to them to decrease that bounce rate. But months later, they have yet to real­ize those gains because they didn’t know where to go from there. As a result it can some­times seem that they are not yet earn­ing the first dol­lar of ROI on all that effort and expense to do the analy­sis. That is, until they take action. And if you never take action on your analy­sis then it may have been inter­est­ing, but largely aca­d­e­mic. That is what test­ing and tar­get­ing are for – to help you actu­ally earn your ROI, not just fore­cast it and doc­u­ment it.

I do this all the time on my own web­site with the Omni­ture Suite, and I never cease to be amazed at how sim­ple it can be to take action that dri­ves real results fast. In my years at Omni­ture, and when I was an Omni­ture customer, I’ve led many ini­tia­tives involv­ing ana­lyt­ics, test­ing, and tar­get­ing. So from this expe­ri­ence, I wanted to share the first in my multi-part series called “When to Test and When to Tar­get.” We’ll start with the first item in The 5 Times When You Want to Test.

1. Land­ing Page Opti­miza­tion – when you need to opti­mize beyond the click.

For many years com­pa­nies have been spend­ing a lot of money on adver­tis­ing to drive vis­i­tors to their web­sites, but com­par­a­tively under-investing to con­vert that traf­fic once it arrives at the site.

I know a large busi­ness that as recently as last year was spend­ing almost $100MM of their adver­tis­ing bud­get in PPC search cam­paigns. It’s fair to say that they were only spend­ing maybe 0.2% of that to opti­mize the key­words’ land­ing page expe­ri­ences after the click­through. I don’t want to make it sound like it has to be a 50/50 split between ad spend and opti­miza­tion efforts – that’s prob­a­bly unre­al­is­tic. But $500/$2 ratio is quite lop­sided toward the ‘spend side’ regard­less of who you speak to.

One quote that has always stuck with me comes from a Wun­der­man exec­u­tive who “gets it.” He said the following:

“We preach that clients today should be set­ting aside 15% of their spend for opti­miza­tion. We believe that the oppor­tu­nity to improve the per­for­mance of the other 85% is that sig­nif­i­cant, and well worth it.” – Mark Tay­lor, Wun­der­man, EVP and CIO

This means that if you have an adver­tis­ing bud­get of $500k for a par­tic­u­lar “new prod­uct release” cam­paign, you nor­mally might engage your agency to build a flash microsite to cap­ture leads, as well as a cou­ple of dif­fer­ent sizes of dis­play ban­ners to put out on pub­lisher sites. Then point them all to the microsite. But if you are look­ing to max­i­mize the num­ber of leads you get out of this new cam­paign, you might do the fol­low­ing instead: Ask your agency to use their cre­ative minds to come up with 3 vastly dif­fer­ent approaches to the microsite, depend­ing on dif­fer­ing the­o­ries they have of what might drive con­ver­sion. Then have them do mul­ti­ple alter­na­tive cre­ative approaches to the dis­play ads. Spend the first 15% of your bud­get to run some tests to find out which com­bi­na­tion of ad+microsite is the best per­former. It’s the Dar­win­ian con­cept of let­ting the first vis­i­tors suc­ceed and fail to dis­cover what works and what doesn’t. Because who’s to say that the first microsite idea the agency came up with is going to be the highest-converting idea? Once you know the best per­former, push the rest of your ad spend to that expe­ri­ence. At least now you’ve found the least-leaky bucket before turn­ing the water on full volume.

Return­ing to the busi­ness that spends $100MM on paid search…. The fact of the mat­ter is, in today’s eco­nomic cli­mate the VP of Adver­tis­ing may have his acqui­si­tion bud­get hacked in half. He can’t spend nearly as much just to shove traf­fic at the site. But, of course, the VP of the .com is prob­a­bly still held to her same rev­enue tar­gets from last year. The only log­i­cal way for the CMO to make this work is to squeeze much more juice out of the traf­fic that DOES come to the site. And the way to do that is to con­stantly be run­ning opti­miza­tion cam­paigns on your land­ing pages. Some of you may be think­ing, “That’s great stuff…I wish we could achieve it. But we’re just try­ing to sur­vive this year.” That’s true – and land­ing page opti­miza­tion is your mar­ket­ing department’s life raft.

Tune in next time when we’ll dis­cuss the sec­ond sit­u­a­tion when you should test….

–Brig Graff

3 comments
victor
victor

This short article is very well put together. Mr. Graff's intelligence precedes his knowladge and reputation in SEO & SEM.

Brig Graff
Brig Graff

Thanks Reuben --- in situations where you don't have campaign spend that you are optimizing, then I think the question is how much traffic to split off to the alternatives before calling a winner, since that was the intent of Mr. Taylor's comment on proportion to spend on optimization efforts before rolling out the entire campaign spend. In the case of traffic, you can roll out a test to however small a group you want ----- just realize that if you only have 1,000 visitors per week coming to the page you're going to optimize, and you try out 4 alternatives of that page (3 plus a control), then even if you roll out to 100% of visitors you'll only get 250 visitors into each experience. This means that it could take a long time before statistical significance reaches a high enough level to crown one recipe the winner. As far as how much of your operational budget for marketing you should allocate to employees & expenses related to optimization efforts, that is a separate blog post series in itself! :-)

Reuben Poon
Reuben Poon

Great article. I'm looking forward to the rest of your series. I like how you included a guideline or frame of reference when budgeting out ~15% spend for optimization. What about companies without a budget or no budget? I've been pondering this question. What if a company were to make successive improvements with the guide that 50-100% of the increase they see they redirect into optimization efforts? Process might be slow at first but you would essentially be funding your own success and after time be self-sufficient and able to initiate other efforts as well.