How to Run a FaceBook Ad

,

How to run a facebook ad

CONTENTS

  1. Vocabulary
  2. What are FaceBook Ads?
  3. Why should I use FaceBook ads? (Statistics and Pricing)
  4. I’m convinced. Tell me more (Types and Formats of FaceBook Ads)
  5. How to ACTUALLY set up my FaceBook ad (And Beyond)

 

Vocabulary

  1. Ad – the final image or other media form that the potential client will see
  2. Ad set – the level where you decide your target and budget
  3. Ad campaign – your ad objective (you can run more than one campaign at once and have more than one ad set for one campaign)
  4. Ad account – the place you manage all of your ads
  5. Ad manager – the place you set up multiple ad accounts and see all the info on your ads
  6. Business Manager – the place you manage your agency’s advertising account
  7. Leads – Information from your audience e.g. phone numbers, emails for newsletters etc.

 

What are FaceBook Ads?

Simply put, FaceBook Ads are a form of publicity for your brand, product or service. They are a social media tool used to reach the audience on FaceBook and, if you so wish, Instagram.

 

Why Should I use Facebook Ads?

Well, FaceBook so happens to be the largest social media platform in existence at the moment. This translates into you having the potential to reach 1.62 billion of its users on the planet. Yes, you read that right. 

That’s almost 1/4th of the world’s population.

 Surveys say that users are over 50% more likely to buy from a business they found on FaceBook than other social media platforms.

About 140 million businesses worldwide use FaceBook Ads as a marketing tool with single entities earning millions of dollars from them. 

This includes Ad agencies running ads for multiple clients.

By creating Ad campaigns, FaceBook has made it easier to run the right ad for achieving a specific goal for your brand. 

With this tool and more, as you’ll see below, the process has been made quite simple to follow.

Facebook has 2 agreeable rules concerning cost:

-The least cost is 1 dollar per day.

-Your budget must be at least double your cost per click (i.e. the average cost it would take to get two clicks).

Outside these rules, FaceBook Ads cost only as much as you’re willing to pay.

You can set a budget that’s either daily or lifetime. 

 

Daily means that your budget will be spread out through the day. Lifetime means that your budget will be spread out through the entire length of time you want the ad to run for.

If you’re having problems deciding, Facebook will suggest a budget based on your ad campaign/objective, your industry and other criteria.

According to Jorden Platten, the average CPC (cost per click) is $0.80 and the average CPM (cost per 1000 impressions) is $5.00.

In my opinion, Facebook Ads, when used properly, are well worth your money.

 

You’re convinced. I’ll tell you more.

This section of this article explains the different formats of FaceBook Ads that consumers see and the different types of ads based on what they help you accomplish.

 If you feel like you know enough and just want to jump right into the process, feel free to skip this section.

Now there are 5 formats and 14 types. I think it’s more beneficial to read about the formats so we’ll start with those.

Formats of FaceBook Ads

  1. Photo/Single Image ads: These are also called links ads. You can upload a photo or status and add some text, a headline, and a description or use an existing post or status as your image ad.

Facebook has guidelines which you can check on FaceBook’s help documentation to check character count and image dimensions e.g. your photo’s size should be 1200 by 628 pixels if you want it to also be displayed on Instagram. 

Also, the photo itself can have overlaid text but if it is more than 20% of your image, your ad might be displayed to fewer people, if at all. 

Hint: Research suggests that the best performing images are funny photos or photos with people smiling, babies, pets or special offers e.g. discounts. 

  1. Video ads: These tend to perform best as they are more interactive and contain more information. 

Over 60% of consumers are more likely to purchase products they’ve seen a video on. Your video can pop up in a video someone is watching or as a story.

However, your video must be captivating from the very beginning as most people tend to abandon videos after a few seconds. It would probably be helpful to include captions or use videos that are easy to understand without sound as videos do not automatically play with sound (the sound has to be turned on manually by the user).

If you want your video to also be played on Instagram, it mustn’t be more than one minute long.

  1. Slideshow ads: Here, you can upload 3-10 photos and FaceBook will turn them into one slideshow for you. 

You can also add sound and text. Slideshow ads loop and while they are similar to videos, they might be a better option for you as slideshow ads are easier to load on slower internet.

  1. Carousel/ Multi-image ads: These allow the user to swipe through 2-10 photos. You can add a link and headline to each photo or use one link and headline for all the photos in the carousel. 

You can choose to allow Facebook to automatically show the best performing photo as the first.

  1. Collection ads: It is more interactive as users can swipe and zoom in or out.

This ad type cannot be displayed on desktops. In creating this ad, readymade templates are available and optional. 

Disclaimers: 

  • Options b through to e allow you to include more information than in single image ads, are more interactive and therefore tend to perform better. They can be used to tell a story about your brand, show a product from multiple angles, display multiple products, explain a process or tutorial, or show before and after pictures.
  • Your ads should contain or end with strong calls-to-action e.g. links that say “sign up here” or “get directions” or “shop now”.
  • If you’re not sure what format to run with, you can use Facebook Creative Hub to create mock-ups of different formats to help you decide.

There are 14 types of Facebook Ads categorized into 3. They will be listed out for you in the process of setting up the ad. Each type accomplishes the particular objective for which it is named; however, some extra information will be given in this list.

AWARENESS

  1. Brand Awareness: In choosing this objective, you should run with a more general audience. You could also use this option to remarket to people who have interacted with your brand before but may not have fulfilled your main objective e.g. subscribing to a newsletter or purchasing a product. It is targeted at people more likely to look at the ad for a longer amount of time.
  1. Local Awareness: To publicize to people within a particular area.
  1. Reach: To get your ad/page to as many people as possible. Brand awareness is more focused on people who will remember your brand.

CONSIDERATION

  1. Traffic: To get people to click on a link. It is ideal for a small budget and works well if you’re trying to get people to read an article of any kind. This can be used to generate leads by driving people to your page. (In tracking the metrics of this, it is better to pay attention to landing page views than the number of clicks because not all clicks mean that someone actually viewed your content/website.)
  1. Post Engagement: This encourages people to like your content, view your videos, share your content, comment and engage with your page. The main benefit is that it lends credence to your page so if you’re a new brand or business, with little to no following, you might want to look into this. However, according to Jason Wardrop, this is simply a vanity metric whose target you’ll accomplish anyway if you run conversion ads; so it might be better to save your money on this and put it into a conversion ad instead.
  1. App Installs: This encourages users to install and use your app if you have one. This would probably be better suited for businesses like taxi companies, banks, etc.
  1. Video views: This is highly advisable, especially for businesses that are just starting out with no audience as video is a high-converting form of advertisement. This gets as many views as possible for the video.

Side Note: After the video has been sent out, you can create remarketing lists of users based on the amount of time people watched the videos for e.g. those that watched for 5seconds, 1 minute or 10%, 20% of the video etc.

  1. Page Likes: It simply gets people to like your page. This also is most useful, in my opinion for gaining social proof as a new page. However, you could also use it to grow a group by inviting the people who like the page to join a group.
  1. Event Responses: This gets people to attend your event.
  1. Lead generation: These help you gather information from potential clients via lead form ads that open in Facebook itself (not your website). You could also do this with conversion ads but the information gathered with lead generation tends to be more accurate because, in this system, FaceBook automatically fills the blanks with information that the users have already given it access to.
  1. Messages: Messenger bots are used to encourage users to chat with you; the bots could also be used to keep the conversation going. It is widely advised for brands that have expensive merchandise; it would give potential customers a convenient way to have their inquiries answered and objections were taken care of so that they can then purchase.

CONVERSION

  1. Conversions: This is used to get people to carry out your specified action e.g. making a purchase, filling a form, etc. As mentioned before, conversion ads are also used to generate leads on your website. The differences between these and lead generation ads are that the user has to manually enter the information here and that you have more control over what happens next whether to send the user to some other page.

To use the following two, the landing page should contain a Facebook pixel (which can be put in by you or your web developer) to help you monitor more details of user activities on your site after they use the link in your ad.

  1. Catalog sales: This encourages people to shop with you. You can remarket with this; for example, it will remarket a product or a similar product of yours to a person who may have looked at that product but didn’t purchase it.
  2. Store visits: This advertises, to people, your branch that is closer to them.

Disclaimer:

  • it’s important that you choose the right objective because Facebook will show the ad to the people that are most likely to fulfill that particular action. If you try to get leads with a traffic ad, your conversion rate will be low because traffic ads target users who are likely to click on your link, not users who are likely to fill out a form.
  • If you want to run just one ad, choose the objective that is MOST important to you at that time and run with it.

How to ACTUALLY Run Your Ad

You must have a Facebook Account to create a Facebook AD.

You can then create a page in your Facebook account for your brand or business. Use your personal account to create your business page (you can get banned if you try to open a new account for your ads alone therefore it is not advisable).

To start the process of running the ad, you can use Facebook Ads Manager.

ADS MANAGER

Using Ads Manager will show the ad on the page you used to create the ad so if you don’t want your page cluttered with ads, use the Power editor.

  1. Go to Ads Manager, on the top right corner of the page, click on ‘Create an ad’.

After loading your account information, it will present you with the list of campaign objectives for you to choose the one you want for that ad. Choose your objective.  T

These are the types of Facebook ads we discussed in the previous section. They determine how you want the users who see your ad to respond and therefore determine the audience that Facebook makes available to you.

Hint: Note that ‘Boost your posts’ will mostly get you likes only.

  1. Pick an objective and fill in the follow-up details.
  1. You’ll be led to the ad set where you set criteria for the audience you want to reach. e.g. location, gender, age, interests, etc. You can create and save custom audience lists for future use. Fill as desired.

If you’re not sure what the target audience for your product or service should be, a google search could help you figure that out. You will also set your budget here. Facebook can suggest a budget for you and you can give Facebook an amount to spend for you. As discussed above, you can decide if you want your budget to be ‘daily’ or ‘lifetime’.

  1. Create your ad: Choose your ad format, select your photo. You will also insert the headline, text, and call-to-action you want to use to communicate your ad to your audience.
  1. Click on “Publish” at the bottom right of the page.
  1. Track and Measure: Go to your Ad manager dashboard and pick the ad you want to track; When you have on the ad, you’ll see “view charts” Like the image below.

 Click on it and it will take you to a dashboard where you view your ads performance based on your set objectives.

Conclusion:

Facebook ads shelters the largest number of individuals amongst other social media platforms. Running an ad on the platform may seem complicated on the surface but this guide has broken down what you need to know about creating a Facebook ad. From creating a Campaign Manager account to Creating an Ad Set to hitting publish. Feel free to save and reference it anytime. Happy advertising.

Identify and track your visitors

OT iconStart your free trial now!

Scalable Analytics: High Traffic Website Measurement

Scalable Analytics; High Traffic Website Measurement

Understanding Change

Now available: Real-time high volume traffic reporting. Think hundreds of thousands, millions of visitors and page views! We have made our Most Popular Pages report on-demand.

We start this article with a quote from the Xoriant blog which discusses architectural considerations for high traffic web portals:

“To withstand the heavy traffic, the system should primarily be scalable, be highly available and should be able to intelligently delegate/distribute the traffic to improve the overall performance.”

The Solution

This development project was accomplished with two technologies: Hadoop and Cassandra. The result is a fast, scalable, cutting-edge engine which is built on a platform characterised as “infinitely scalable”. We have tested this claim successfully with millions of pageviews per day on a single site.

This cloud-processing model is used by companies such as Twitter, Google, Amazon, and Facebook (it’s Facebook technology – Facebook started Cassandra). This technology is now available to all users of Opentracker.

Case Study

An online newspaper with millions of daily visitors spoke with us. They needed to know what stories are getting the most play on their website. They need this information now, in real-time, from minute to minute. This information will let them manage content and maximize advertising potential. The website content editors need to know what their readers are interested in.

Findings : 

Tools are needed to manage the traffic flow and also to manage the content people are looking for. For example, to produce or purchase more content if interest is growing. Websites also need to take advantage of traffic streams to generate revenue by displaying appropriate advertising. They also need to take advantage of opportunities by informing potential advertisers about opportunities.

The same scenario applies to social media sites, traffic portals, sports sites, television, media, video entertainment content providers (think Youtube, NFL, or HBO), gambling and adult content sites. This information is critical for managing content and advertising streams. Robust, scalable, traffic measurement is absolutely critical. Traffic movement can be volatile on the internet, the world’s attention span is dynamic, take a look at Twitter over a 24-hour period to get an idea. Millions of visitors can come and go within the space of an hour or less. Visitors are interested in different areas like international news, world sports championship events, large-scale media events, gossip, celebrities, movies, hollywood, etc.

Conclusion 

The reporting technology will deliver the capability to see where traffic attention shifts, as it happens. This reporting will give web masters the ability to monitor network traffic loads where scale is an issue.

Q: Who is this technology meant for?
A: Anybody who needs to know what is happening on a website while it happens. People who manage site with fluctuation and traffic spikes. People who need to make decisions based on visitor behaviour.

This technology is ready to deliver. Contact us for details and pricing

Marketing Campaigns: Creating Highly Effective Promotions

, ,

Marketing campaigns: Creating highly effective promotions

This is the ultimate guide to crafting online marketing campaigns that converts traffic to clients. This article is written to get you high ROI from organic and paid marketing.

Do you want a highly effective marketing campaign that delivers quality traffic that converts to paying customers? This article is for online businesses who want to attract prospects & qualified traffic that converts to happy customers.

1. What you will learn in this article

In this article we address marketing campaigns. For starters we provide the definition of a marketing campaign. We provide some background history. We outline developments in internet advertising which set the playing field. There is a list of ten steps to plan a perfect marketing campaign. We discuss the challenges marketeers face; what makes it difficult to launch a successful marketing campaign. We discuss options specific to LinkedIn, Google, and Facebook.

To give value, we provide tools for improving your chances of launching a successful marketing campaign and seeing a return on your investment. Learn more by watching this video.

Table of contents:

  1. What you will learn in this article
  2. Definition of a marketing campaign
  3. Best way to plan a marketing campaign
  4. Problem (issue) the difficulty of launching a campaign in today’s environment
  5. Potential solution – use measurement for data-driven campaign planning and execution
  6. Recent developments in the history of marketing campaigns
  7. The current landscape – challenges facing marketers – better targeting
  8. Avoid spend without ROI
  9. Measure and Increase Chances of Measurable Success
  10. Conclusion

2. definition of a marketing campaign

The definition of a marketing campaign is an effort to publicize new or existing products and services through established channels using advertising and marketing materials. A typical combination of media might include email, social media, pay-per-click, and print, television or radio advertising.
dictionary for marketing campaign

The main goals of a marketing campaign should be to drive traffic, improve brand awareness, and increase market share through additional sales.

3. best way to plan a marketing campaign

This list of ten modern Best Practice will help you create an exceptional data-driven marketing campaign.

Ten steps: the best way to plan and run a successful marketing campaign. The process from campaign launch to leads.

  1. define your marketing campaign goals
  2. define measurement metrics for your marketing campaign goals
  3. build your call-to-action – what do you want people to do
  4. plan the work flow – where will visitors land – build and test your landing page(s)
  5. outline campaign goals: define success – the minimum numbers needed for ROI
  6. determine your marketing campaign budget
  7. asset production: prepare your message and offers
  8. identify marketing campaign channels
  9. identify target personas
  10. measure results: monitor conversion closely once the campaign is launched

4. The difficulty of launching a successful marketing campaign in today’s environment

On the face of it, this should not be so complicated. At the moment however, many people are losing money on marketing campaigns. It’s become increasingly difficult to guarantee success or even positive ROI outcome in today’s landscape. The point of a marketing campaign should be to: use a formula to put in Spend and get out Desired Outcome. At the moment however, we see people spending money and losing it.

Question: what is the current problem with launching marketing campaigns?
Answer: the complications and uncertainty involved in predicting success, or even break-even outcome

5. Potential solution – use measurement for data-driven campaign planning and execution

Question: what is the solution?

Answer: social web and mobile analytic data now available for measuring marketing efforts allows you to deliver data-driven campaigns. This increases the chances of a successful outcome. Identify your ideal target buyer personas and use data to target them. Marketing can target them with content. Once they are engaged, leads can be passed on to Sales. Use metrics to manage and improve the process.

As with many strategic business decisions, fail to plan = plan to fail. Here is a list of campaign components you will need to plan:

Options (channels, platforms)
Audience (target buyer persona)
Workflow (call-to-action)
Plan (budget and objectives)
Mechanisms to track and monitor success (test, deploy, monitor, adjust, repeat)

Uncle Sam's marketing campaign

6. Recent developments in the history of marketing campaigns

Ten years ago, it was relatively easy to launch a marketing campaign. Instead of becoming easier, things have become more complicated. The current landscape is a moving target. It is very hard to guarantee ROI. There are many unknowns; targeting has become both standard and increasingly expensive, to the point of being cost-prohibitive. An additional challenge is designing measurement correctly so you can both pivot and measure conversion. In other words plan for and define the desired outcome.

Some historical background

Advertising and Marketing is an ancient and noble art. A bronze plate advertising a needle shop during the Song dynasty in China a thousand years ago is considered our first advertising medium. Trademarks have been around for up to 4,000 years, in the form of marks and seals. The first advertising agency in the U.S. was founded in Philadelphia in 1840. Think of campaigns such as ‘Uncle Sam wants you’ and ‘Got Milk?’ which have become part of our cultural lexicon. [insert image – Uncle Sam Wants you / Got Milk?]

7. The current landscape – challenges facing marketers – better targeting

Fast forward to the 1990s and the introduction of search engines which allowed for targeting based on search queries. Today, the problem situation is:

  1. the major players are Google Facebook, and LinkedIn
  2. the marketplace for launching campaigns is a shifting landscape
  3. this is further complicated by the fact that lead generation involves several delicate steps
  4. Google and LinkedIn are no longer for testing – they are expensive
  5. You need to be an expert in many fields – ie LinkedIn / Facebook / Adwords certified in order to compete. It takes many months – even a year, to become an expert – which costs money (or hire an agency due to complexity)

Context: a few years ago, Facebook started by copying Google, in allowing you to target ads. Six months ago, for example, you could not target niches on LinkedIn.

Now, Facebook is copying LinkedIn, allowing you to target professions/ professionals using lead ads. Meanwhile, LinkedIn offers targeting via firmographic demographics.

8. Avoid spend without ROI

This may sound like a lot of opportunity, but many people try and fail, because a) prices have become so high and b) linking the technologies together is tricky. In other words, the outcome is a (high) cost without the desired outcome. It is necessary to configure attribution, conversion, and success in order to measure and repeat results. A structured plan will increase the chances of generating a positive ROI outcome because it will allow you to verify results, both good and bad.

9. Measure and Increase Chances of Measurable Success

In spite of uncertainty, by looking at these basics we can help you increase chance that ROI outcome is successful. You can minimise risk through planning. Using the

  • i. point 3. above: Ten steps to plan a Marketing Campaign
  • ii. planning how to measure and
  • iii. using metrics to update campaign elements and increase chances of successful outcome

10. Conclusion

Learn more by watching this video.

Schedule a no-risk consultation session with one of our experts
We track business. Watch how.

3 Ways To Increase Traffic

Start your free, no-risk, 4 week trial!
Track your visitors now

How to Buy Traffic

Executive summary and article navigation

Lead Generation And How To Buy Traffic ( 3 Part Article )

We discuss 3 ways of driving traffic directly to your site, and present our findings.
Part 1 talks about paid inclusion in newsletters, and ads / banners on tech & marketing sites.

The 3 articles are:

  1. Buying targeted leads & Paid Inclusion – placement in newsletters & blasts
  2. PPC ad campaigns – adwords / google; proven source of targeted traffic
  3. Bulk traffic clicks – buying 50,000 visitors

The secret is that there is no easy way to buy traffic. There are a lot of sites and products claiming to bring you traffic, but in reality, it is difficult to arrange for people come to your website, click around, and buy something. We tried 3 techniques and share our findings with you here.

We are of the opinion that
1) PPC campaigns are a definite must
2) paid inclusion in newsletters, ads and banners, can be successful if well-placed and well-designed, & that 3) bulk targeted traffic is a scam.

Note: industry information on lead generation is somewhat guarded. Lead generation and the purchase of traffic is a complicated business, with networks and affiliate groups. There is not much info on this subject to be easily found on the internet. We present this account with a pinch of salt. We would be very interested to read about your experiences.

Part 1: Buying Paid Newsletter Inclusion

Research markets – buy advertisement

We purchased advertisement inclusion in two well-known opt-in / subscription newsletters. Both inserts were in the price range of $750 – $1000.

For both campaigns we provided a banner ad with text for inclusion in a newsletter published on the internet and sent out to various email lists, made up of 25,000 to 500,000 opt-in subscribers.

We were told to expect anywhere from 300 to 3000 click-throughs. From that number, 10% of the visitors might take out a free Opentracker trial, and of those trials in turn, a percentage of people would purchase website statistics subscriptions.

We created separate landing pages for each mailing, so that we can very clearly see, by url, how many people landed on each page.

Results – collect data

In both cases the numbers were lower than expected.

For the first mailing, we received 10% of the visitors we had been told to expect, but the visitors showed a high level of interest, based on pageviews.

For the second mailing we received the amount traffic we had been told to expect but less than 10% of the visitors created trial accounts. The average number of clicks was much lower, indicating that this group was clearly less interested than the first mailing group.

Analysis – study what is happening

Here are three sample variables we use to measure success in this situation:

  1. Acquisition cost-per-visitor or cost-per-lead
  2. Is traffic well-targeted? Average number of pageviews each visitor generated
  3. Conversion: percentage of visitors who follow call of action and “do what we want them to do”

Evaluating variables:

  1. The acquisition cost-per-visitor / lead was substantially higher than we had expected, i.e. whereas we pay $0.50 or $1.00 per lead on Google or Bing, we were paying up to $4.00 per lead in this lead generation campaign. A lead is a lead, however, and if they are well-targeted, they are worth the investment. Which brings us to
  2. The number of pages the visitors view. This is important. There was a large difference in the quality of the traffic. For the first mailing, the average visitor viewed 7.5 pages, and hence was likely to create a trial account. The group that received the second mailing averaged 2.5 pageviews each. The lesson is to stress the importance of well-targeted traffic. The question remains; why would one group of visitors look at more pages than another?
  3. The percentage of visitors who follow the primary call to action and “do what we want them to do” was larger for the first group than for the second. This can easily be explained by looking at the average number of pages viewed per person. The finding is that the lower the average number of pages viewed, the less likelihood of conversion.

Best landing page practices

If your campaign spans several days, experiment by changing the landing page, and comparing results. On the right, please see the places that people clicked, in order of popularity.
At one point we noticed that the average pageviews were very low, meaning that nobody was reaching our target page (the sign-up page). We changed the landing page and directed the visitors directly to the ‘create a free trial’ page. This led to an even further drop in the average number of pages viewed.
People did not respond well to being landed directly on a sign-up page.
There is a lot of literature on this subject. The challenge is to offer a well-built page which is to the point, invites exploration, and leads visitors to complete a desired action. In this case a text-link produced the best results (see diagram).

Text links were most effective at driving traffic

See the diagram above (click to enlarge). The diagram tells you what percentage of visitors clicked on each image or link on the page. The text links towards the bottom of the pages attracted the most visitors.

Conclusion: paid inclusion

You do not know what the quality of the traffic that you will receive is going to be. There is no way to guarantee that your visitors will take any action, which tells you that you need to both a) have well-targeted traffic, and b) make your site a great place to visit.

Nobody can “force” people to come to your website, look around, and make purchases. Of course, some people are paid to surf to your site, a sneaky tactic which is covered later in part 3.

What to bring – budgeting

In our experience, you need a budget of several thousand dollars to test the waters; a regular budget of somewhere between $500 and $1500 per month, or every other month. You should budget a larger percentage to continue purchasing sources of traffic that work for your site. Also budget a small percentage of your marketing wallet for experiments, to find new sources, and tap into new marketing channels.

next: Part 2 – PPC pay-per-click campaigns

What Is Churn Rate? Define and Calculate Churn Rate.

How to Calculate Churn Rate: A Comprehensive Guide

Introduction

Calculating churn rate can be intimidating.

But it’s something no SaaS or subscription business can escape. You have to know how many customers leave at some point — so you can determine why there is a problem and if the effort to fix it is worth the effort.

(Un)fortunately, there are several ways to calculate churn, which have led to a lot of complexities. But at the same time, it’s necessary and important to understand the different ways to calculate churn rate — as long as they help you improve retention and revenue.

Moreover, each calculation method has its own usefulness. For example, you can calculate the churn you experience on:

  • a specific cohort (a group of users)
  • based on revenue or customer numbers
  • a monthly basis
  • quarterly/yearly basis
  • a seasonal basis

Each method has its churn rate formula, so let’s take them one-by-one:

3 churn rate formulas to calculate how users leave

At its core, calculating churn is controlled by the following formula:

In essence, you divide the number of churned customers in a period (month, quarter or year) by your total number of existing customers in that period.

churn rate

Now let’s explore the different methods for calculating churn:

1. The cohort analysis method

First, ‘cohort’ simply connotes ‘group.’ So when you identify churned customers by a common group they belong to, you’re basing your churn estimation on cohorts (groups) of users.

For example, you can get cohorts (groups) of lost customers who signed up in the same months. That’d look something like this:

Customers who signed up in May and left before September.

Or

Users who signed up in April but left in nine months (see the gif below).

churn rateSource The lifespan of groups of users based on their signup months

 

You get the idea. Monitoring groups like this helps you understand activities you should be pouring more or less of your marketing/advertising investment into. The result?, You get to cut churn and improve profit. Reducing churn by 5% can increase profits by up to 125%!.

Compute churn rate (through the aforementioned formula above) for every month and you’ll get the churn rate for each cohort; more on this in #2 below.

2. The monthly % churn method

This one is clearly the simplest of all churn calculation methods:

churn rate

© Opentracker.net

And while it might look too simplistic to be effective, this is the churn calculation type that anyone in your organization can compute; they simply divide the number of churned customers in a month by the number of customers you had at the beginning of the month.

The result they get reveals churn rate.

But you might be surprised at how many complex monthly churn rate calculations are flaunted online today. Some of them are indeed necessarily complex, but many others? Not so much.

The chief argument complex calculation users purport is that fluctuations occur in your number of existing and lost customers during the month and your formula needs to account for those numbers. They’re right, but a much simpler way is to use the cohort method to derive monthly churn.

Compute your churn rates month-after-month, back-to-back, and you’ll discover you’re already accounting for all new, existing and churned customers in your computation.

For example, say your existing customers in May are 10,000 but by month’s end, you’ve lost 500 of them. Also, during the month, you added 1000 customers out of which you also lost 50.

 How to solve this complexity:

By now, your churn situation is not so simple anymore. So at this point, it’s clear you can’t just use the simple churn calculation method to get accurate results; here’s how your churn calculation for the month of May would look:

churn rate

© Opentracker.net

You kick off the following month with the number of customers you ended with last month, minus the ones you lost (i.e. 10k customers from May – the 500 you lost + the new ones you added in the month).

And since you’re growing, let’s say during the month of June, you acquired another 700 subscribers but lost 60 of them. Again your churn and existing customer numbers have changed, so you can’t just apply the aforementioned monthly calculation method.

So a better monthly churn calculation formula is:

churn rate

This way, your calculation encompasses all existing, churned, new and newly churned customers throughout each month.

So let’s continue with our example, assuming:

  • we bring in existing customers (minus churned in May) at the end of May,
  • lost 500 of them at the end of June,
  • added 700 customers in June,
  • and lost 60 of them.

Here’s the math:

churn rate

© Opentracker.net

In general, here’s the monthly churn calculation for both months:

churn rate

© Opentracker.net

This way, you realize that every lost, new or existing customer that wasn’t accounted for in a certain month computed into the next and was duly accounted for.

3. Quarterly churn

As a product marketer or customer success manager, monthly churn rates can be all you need to keep going about your day-to-day. But CEOs, CMOs, investors, board members and those higher up the chain need more solid and broader reports to make their decisions.

That’s where quarterly churn reports come in.

It’s simple. After computing the monthly churn rate as in #2 above, simply add up the churn rates for every three months.

This formula works for that:

churn rate

Where:

X is the computed churn rate for each month (using the calculation method in #2 above)

N is 3, representing the no. of months in a quarter

A slightly more complex formula (which most businesses don’t need) is to compute the numbers of existing, churned, new, and churned new customers in all the three months in a quarter and divide the result by the ARR at the start of each month.

Comprende? Here’s how it looks in a formula:

Quarterly churn = CCn / EC

Where:

CCn is the number of churned customers at the end of every month in the quarter

EC is the number of existing customers at the start of each month

On the other hand, a wrong way to measure quarterly churn is calculating churn in the quarter’s first month and multiplying that by three.

It would have been an accurate calculation method if there was no growth in the quarter, or if all numbers of existing customers, churned users, new users and lost new customers were constant from month to month.

But that never happens. All the numbers change too frequently.

4. Annual churn

Like quarterly churn, execs and board members use annual churn to set forecasts and make company-wide decisions.

Once you’ve understood how to calculate monthly and quarterly churn rates, computing annual churn is the easiest thing to do.

But you must use the monthly churn calculation method in #2 above — since it accounts for all customers (existing, lost, and new) every month.

So here’s the formula to calculate annual churn:

Q1 + Q2 + Q3 + Q4 = Annual churn rate.

Where: Q represents the churn rate of every quarter.

OR

M1 + M2 + M3 + M4 …… + M12 = Monthly churn rate.

Where: M represents the churn rate of every month.

And this is clearly different from just multiplying one rate by 3 or 12 to arrive at your churn rate; that’s not helpful as it would ignore all the growth/fluctuations you experience throughout the months in a year.

Calculating churn based on revenue?

If your SaaS business has more than one price or contract size, an enterprise churned customer may not represent the same value as a small business churned customer. SaaS businesses that have tiered pricing need to take the loss of revenue per customer into account.

To do this you will need to replace the above formulas with revenue units (i.e. dollars or euros). Churn can then be expressed as lost revenue offset by growth of new customers in terms of new revenue.

And contract terms also influence churn. A contract that renews on a yearly bases churns much less than a contract that renews on a monthly basis. Understanding this can validate up to a 30% discount for contracts that renew just once a year!

What’s the best way to calculate churn?

In general, it’s best you keep it super simple.

And that’s why this guide centres on simple but accurate calculation methods.

Stick to a calculation method that’s easy for anyone and everyone in your organization to compute; such that if your CEO, for example, isn’t great at numbers, she could still ascertain your churn rate without anyone’s help.

And you’ll know your calculation method isn’t too complex when stakeholders who need to compute it themselves don’t complain that it’s too complex.

What is a good churn rate?

You don’t want churn to occur at all, but we know that’s not going to happen.

But then, you want it to be as low as it can be.

So what’s it going to be? 5%? 7%? 10%?

A good churn rate is somewhere <12.30%, but a nice sweet spot is anything around 5%.

Whatever it is for business, it shouldn’t exceed the “healthy threshold” — the threshold that allows you to make enough profit to pay all salaries/other company expenses and live the life you desire.

Save yourself the stress

Let us handle your churn (and other SaaS metric) analyses.

Your business is different from every other business, regardless of how similar a lot of them look. We’ll help you accurately compute your churn and retention metrics — so you can focus on other important aspects of your business.

Here are three key ways we help you:

  1. Measuring what matters

If you haven’t already discovered the metrics or OKRs that directly influence your churn and retention rates, we help you find them. The metrics we find help you to:

  • focus your resources on what matters most in cutting churn
  • track your work and focus results towards achieving your goals
  • enable large groups to work together in alignment
  • go the extra mile (if need be) to achieve goals you probably thought were impossible
  1. Speed & agility

We provide incremental steps that help to deliver value in a timely manner. Our agile process helps us deliver work in small, but usable, increments.

  1. Simplicity & accuracy

From this guide, you can tell we prioritise not only accuracy but also simplicity. We implement procedures that help to curb the complex steps in computing any metric. In the end, we help you reach desired churn and retention goals.

Fill out this form to apply for a free consultation session.

Pay-per-click (PPC) advertising and campaign management

Pay-per-click (PPC) advertising and campaign management

Summarized overview

Questions and subjects discussed in this article:

  • definition: PPC campaign
  • definition: impressions
  • PPC market leaders: what and where to buy
  • clickstream analysis and keyword selection
  • cost-per-unit and what you should expect to pay
  • how to evaluate the traffic you purchase
  • the difference between quality and quantity
  • importance of conversion rate metrics

PPC advertising

Pay-per-click (PPC) advertising and campaigns are the primary way of advertising on the internet. As of May 2009, the three largest players in the market are Google, Yahoo, and Bing.

A PPC campaign lets you determine exactly who comes to your website. You only pay for clicks to your site; if a person clicks on a search engine result, link, or banner and lands on your site (aka PPP pay-for-performance advertising). If the person only sees your link, but does not click through, this is called an impression.
Impressions are “the number of promotional units a person is subjected to” (Cone, S. 2008. Powerlines) You do not have pay for impressions. There are also pricing models based on impressions, which charge per thousand (CPM). Whether or not the purchase of impressions is interesting for you depends on your product and target audience.

Using clickstream analysis, a tracking system will tell you what people do on your site once they arrive through PPC advertising. This information is necessary to manage your advertising, and determine the best ways to:

  • obtain quality traffic
  • convert visitors into customers
  • create action that generates revenue

PPC advertising is based on keyword selection. The entire internet advertising market revolves around choosing the correct search terms and keywords. Well managed PPC advertising will bring traffic that achieves your goal, or ‘desired outcome’, whether it is to publicise an event or sell goods and services.

Quality is more important than quantity.

‘Quality’ traffic refers to traffic that is well-targeted. This means that the visitors:

  • are looking for what you are advertising
  • enter the site and look around
  • complete a transaction or become a lead (i.e. convert)
  • come from countries and regions that you are interested in
  • return to visit your site again

Quality traffic will bring you a higher percentage of success, in terms of seeing your visitors complete a transaction, or subscribe to the service that you provide. Conversion rate analysis will allow you to determine which traffic sources turn visitors into leads and sales.

Conversion rate is the statistic that tells you what percentage of your visitors are converted from visitors into customers/ leads. High quality traffic will deliver a higher conversion rate. Conversion rate is another way of talking about your return on investment (ROI) and acquisition cost-per-visitor.

How to use tracking to evaluate PPC campaigns

A tracking service will allow you to:

  1. Check how effective clicks are and adjust campaigns accordingly:
  • see which keywords and search terms bring more visitors
  • learn which advertising copy is most effective
  • know which source/ search engine brings the best results:
  • at the right price per click (cost acquisition per customer)
  • determine conversion rate and set goals
  1. Accountability: make sure you are getting what you pay for
  • source of traffic: country, etc
  • how long do they stay, how many pages viewed? Average number of page views from one search engine might be lower than another
Please click here to read our recent article on “how to update PPC campaigns with search term data”.

We cannot stress how important it is to actively manage your PPC campaigns. Update your keywords, campaigns, vendors, and bids as frequently as possible, as your budget allows.

What can a tracking system tell you about the quality of your traffic?

Low quality traffic may overload your server(s), spike your traffic & frustrate you. More importantly it is a waste of time, money, and resources. It will create false expectations. A tracking system will tell you if / why your traffic is low quality.

  1. Does it come from a country which is not your market? For example a place where most people do not have credit cards or are not interested in buying real estate in Canada, because they live in China.
  2. Do the visitors land on your homepage and leave without clicking any further? Visit duration is an important statistic which tells you if people are interested in your site. How many pages do the visitors look at?
  3. Are the visitors presented with a link to your site when they search for a related keyword or search term? This is called phrase matching. The worst-case scenario is when your link is presented randomly, or as a pop-up.

Where should I buy PPC advertising traffic?

There are many sources to purchase clicks from, we recommend that you try more than one service, and compare results. Many sites use search results originating from a small number of search engines. This type of system is called a “content network”. The major PPC vendors such as Google and Yahoo also place content within their own networks. For example, they place advertisements alongside like content.

The PPC vendors distinguish between ‘Sponsored Search’ results and ‘Content Match’ placements. Sponsored searches place results alongside search engine results. Content match places results near articles, email content, forums, etc. In our experience you will obtain a higher conversion rate with sponsored searches, which also cost more.

Statistics on the subject of where searches are conducted vary widely. Estimates for Google, the leader, are as high as 80%. The leaders after Google are Yahoo, Bing. Many smaller search engines come and go, as they are purchased and incorporated into the larger search engines.

List of companies who sell PPC traffic:

Google, Enhance (ah-ha), Overture, FindWhat, Kanoodle, ePilot, LookSmart, Search123, eSpotting.

NOTE: the list above dates from several years ago and demonstrates some examples of search engines which have disappeared. Do some research to determine the current “hot” markets.

The advantage of paying for your traffic is that most campaigns can be implemented immediately, although it will take several hours to set up your first account. Depending on your budget, you can pay for a high ranking and see your advertising online within an hour. The disadvantage is that you have to pay every time a person clicks on your advertisement.

Therefore we recommend that all PPC campaigns are accompanied by ongoing efforts to improve your Google pagerank and optimise your site for search engines. These results are free and cannot be directly purchased, although you can hire a company to perform search engine optimization (SEO) on your site.

How to start your PPC campaign

The best thing to do is to run a few PPC accounts and run your campaigns for a set period of time and compare results. The standard setup procedure involves:

  1. create account & deposit funds
  2. receive confirmation that your account has been activated
  3. choose your keywords & text
  4. watch your traffic to evaluate your choice of text & words
  5. adjust your bids/ budget accordingly

Most PPC campaigns allow you to bid on your position. This means that you can bid on the number one position in the sponsored listings category. Bidding can be very competitive, with advertisers paying above $5 per click. Consider your price an acquisition cost-per-customer. It is part of the larger picture of website management strategy.

Once your visitor arrives, you must ensure that they find what they are looking for, and in the words of many marketing consultants; that you are able to guide them to complete actions that you desire, for example:

  • placing an order
  • completing a transaction
  • making a reservation
  • becoming a lead
  • signing up for a newsletter

Several studies have demonstrated that once a visitor makes a purchase on a site and effectively becomes a customer they are likely to return again. In this way a high acquisition cost can be justified, when ROI is taken into account.

Creating a PPC advertising campaign may seem daunting at first, however with a little research, you can design your own campaign, and reach a larger percentage of your target audience. Whether you manage your own campaign or hire somebody to do it for you, we are of course interested to hear from you and offer any advice that we can.

Start your free, no-risk, 4 week trial!

How To Improve your Google Rankings

Improve Google ranking and PageRank

Start your free, no-risk, 4 week trial!
Track your visitors now

Summarized overview

In this article, you will find information about:

  • Google PageRank
  • Search engines & keyword significance
  • Google bots and fresh bots
  • Optimizing your pages
  • Content updates: ‘a page a day will send Google your way’

Google is your friend

At the moment, Google is by far the most popular internet search engine in the world. At the time of writing, Yahoo is the second largest, it takes over a majority of remaining smaller engines (Inktomi.com, Altavista.com, fastsearch.com, alltheweb.com, etc.) through its acquisition of Overture. Bing is the 3rd player, and is currently developing their own search engine that will produce independent results.

Numerous big players like Yahoo, Hotbot, AOL, and Netscape use Google engine and indexes.image for google page rank

Google has a unique way of determining where to place sites in result listings, from top to bottom. They use a technology called PageRank:

Most services offer the bare minimum, a counter, for free. If you wish to learn about your traffic in any detail, an upgrade and payment is necessary.

PageRank

The word “PageRank” means a system for ranking web pages.

“PageRank relies on the uniquely democratic nature of the web by using its vast link structure as an indicator of an individual page’s value. In essence, Google interprets a link from page A to page B as a vote, by page A, for page B.”

Backlinks and how they affect your pageRank

Links from any page (internal or external) to your site (primarily your homepage) are called backlinks.

Additionally, Google looks at more than the sheer volume of votes, or backlinks, a page receives; it also analyzes the page that casts the vote. Pages that are themselves ‘important’ weigh more heavily cast votes and help to make other pages ‘important’.

Thus, “important, high-quality sites have a higher PageRank, which Google remembers each time it conducts a search. Of course, important pages mean nothing to you if they don’t match your query. So, Google combines PageRank with sophisticated text-matching techniques to find pages that are both important, and relevant to your search.”

“Google goes far beyond the number of times a search term appears on a page and examines numerous aspects of the page’s content (and the content of the pages linking to it), to determine if it’s a good match for your query. “

To find out what your site’s PageRank is, you can download a tool . To check your backlinks, try typing ‘link:www.yoursite.com’ (without the ‘ marks) in the search box.

The above excerpts are taken from an article that was posted by Google, which provides additional background information on PageRank.

Meanwhile the page has been removed, so here are some other links to relevant info:

http://en.wikipedia.org/wiki/PageRank
http://www.google.com/competition/howgooglesearchworks.html#section1

How to improve your site listings in Google

Getting Started

Check if your site is in the Google database.

If your site is new or you are still building the site, add your site as soon as possible. It can take up to a month to see your site turn up in Google. This is a rough estimate, as the time period is steadily diminishing. You will turn up much quicker if you are linked to a site which is frequently ‘spidered’ by Googlebots; little robot-scripts that index the internet page-by-page. These robots, which search engines send out, are variously called ‘spiders’, ‘bots’, ‘crawlers’, etc.

 

Googlebots

Google spiders in particular are called Googlebots. There are different types of bots. A freshbot, for example, visits you on a regular basis if you make frequent updates. The advantage of being visited by freshbots is that your updates can appear in Google on a daily basis: something of a positive version of catch-22. The more content you add, the more often you are visited. This leads to the importance of adding content. This is discussed in detail below.

If you have a link from a site that is often visited by a googlebot, then you can appear in Google within 24 hours.

Feshbots

To determine if your site has recently been visited by a freshbot, do a search on Google for your site URL. Freshtags, which indicate the recent passage of a freshbot, will appear in the search results as a recent date (shown just below the single line of site description). They are not rare, however, like clouds, on some days there are none in the sky.

Find link-exchange partners and check their PageRank, a link from a site with a high PageRank is better than one with an low PageRank. The case has been made that linking to a site that has no PageRank will keep your rank down. This is called linking to a ‘bad neighborhood’.

Optimizing your pages for Google

Your site will be visited by Googlebots if you establish one or more links from other indexed sites to yours.

Googlebots scan the content of your pages mainly by looking at the following items:

  • Page title
  • Meta description
  • All text on your page(s)
  • Links to other pages

All these items are of great importance because they should contain your important search keywords.

This is an important conceptual hurdle. The entire internet revolves around the choice of individual words. This process is constantly being refined. It is essential that you are Spartan and accurate whenever choosing your descriptive terminology: words. Try and put yourself in the minds of the people who will be looking for your site. What are the one or two words that they will focus on?

Page title

Make sure your title contains your most important search keywords. Do not make your titles longer than 80 characters (more can be considered as spamming).

Meta description

Google does not index your meta ‘keywords’ tag but it does index your meta ‘description’ tag. Make sure your description contains your most important search keywords.

All text on your page(s)

Make sure your text contains your most important search keywords. More importantly, the pages should focus on your subject, service, product, or area of interest. Put your most important keywords once in your headers, a couple of times in your paragraphs, once in bold once in italic, in your image alt tags, your image names, your url’s, etc.

Links to your other pages

Make sure the Googlebot can find its way through your site. One thing Googlebots find hard to follow is framesets. 

or hidden section where your text and links are located. Adding a sitemap can do wonders for letting Google index your entire site.

Tip: if you have a button on your website that takes you back to the homepage, link it to your domain name (www.yoursite.com) instead of a page called home.html or index.html. Google doesn’t recognize the difference between outbound or inbound backlinks.

Content: update your content as frequently as possible.

The more often you update your content, the more often freshbots will visit your site. Try to add a page a day if possible. The content you generate should be of high quality. Try to find every angle from which you can discuss or describe the subject your site is about. The point is not to generate poor quality or duplicate material. Duplicate pages will lead to penalization. The point is that Google, for example, loves content. It is a question of scale. Think of the old adage ‘an apple a day will keep the doctor away’. In this case it can be revised: ‘a page a day will send Google your way’. More content, more spider visits, more human visitors, more readers, more pages, etc.

All this will contribute towards strengthening your PageRank and realising a higher position in Google search results. This will lead to more traffic.

Please keep in mind that the above tips, suggestions, and ideas are based on our experiences managing Opentracker. This information is subject to change on a daily basis.

Start your free, no-risk, 4 week trial!

Search Engine Optimization (SEO)

Search Engine Optimization

Start your free, no-risk, 4 week trial!
Track your visitors now

Article navigation

In this article you will find information about:

Search engine optimization (Ŏp’tě-mĭ-zā’shěn) n.

Search engine optimization (SEO) is the process of making your website easy to find on the internet. This is done by optimizing your site for the search engines that people use to surf the internet. A well optimized site can draw thousands of (free) referrals per day from major search engines. Properly optimizing your site will mean a gradual shift away from Pay-Per-Click campaigns to cost-free referrals.

In this article we outline several techniques you can use to undertake a simple search engine optimization of your site.

The goal: improve your position in search engine results

The goal of search engine optimization is to place your website as high as possible in search engine listings. Most surfers do not scroll down through search engine results, which is why you need to be as high up as possible.

For example, if you sell widgets, you do not want to come up number 68 in search engine listings. If you do, chances are very few visitors will make it to your site, unless you use paid or sponsored listings. Not only can paid listings be expensive, but a surprisingly low percentage of surfers actually click through sponsored results. By our estimates, made through studying Google Ad campaigns, the clickthrough rate on sponsored listings often hovers around or below 1.0% of all impressions made. That means that less than one percent of all visitors click on paid listings in Google.

Some search engines, for example Dogpile, Teoma, and InfoSpace, present a higher percentage of sponsored listings. Others such as AOL, Netscape, Ask Jeeves, and Hotbot feature sponsored results more prominently, and subsequently have a higher click-thru rate on paid listings than Google. Keep in mind that ownership and management of many search engines and portals changes on an almost daily basis. Perhaps the most important point is to be aware of where search engines get their results from.

Ultimately, you want to have your site listed in the top 10 or top 20 search engine results. This counts for all search engines, and especially for search engines that you would not be able sponsor your way into, even if you had the budget.

How SEO works

The goal of SEO is to increase the amount of traffic that is led to your site. One way to do this is by optimizing the content of your website page by page. Below we describe a few of the steps that you can take yourself to optimize your pages.

Parts of the optimizing process are fairly straight forward. The most important focus is the choice of keywords/search terms that you build into your site. The keywords you use are the road signs that lead traffic to your site. Therefore, your content should be purpose-built, by carefully choosing the words with which you create the content of your site. This means both your page titles, and the actual content of your pages.

Carefully chosen keywords, that reflect the search terms that surfers use, will also have the advantage of improving your Google ranking.

Here are a few steps that you can take yourself:

  1. Find out what your keyword density is. This number tells you the number of times specific keywords appear in each page. Between 5% and 15% is a good range to aim for. It is up to you to find a good balance between being informative and repetitive.
  2. Build links into your site. Both visitors and search engine spiders navigate by way of links. It is necessary to have numerous links, both from external sites (called backlinks) and links within your site (called crosslinks). When creating links, use words in place of logos or graphics. This is called anchor-text placement.
    Links will make your site easy to navigate for the bots and spiders that some search engines send out to index all the websites on the internet. Note: not all search engines send out bots. MSN, for example, use advertising, paid listings, and existing directories. You make your site easy to navigate with either a site map, extensive crosslinks, or both.
  3. Examine your page titles. Make sure they are succinct and relevant.
  4. Describe your service or product in as many ways as possible. For example, if you sell widgets, post articles and content which talk about the many wonderful applications of widgets. You could have a piece about manufacturing widgets, a piece about widgets as the perfect gift. You might want to include descriptions of both the numerous types of widgets available, and descriptions of all the numerous widgets, and widget-related products that you carry. A piece on the historical development of the widget would not hurt.
    The reason for including so much widget-related content is to try and cover all the possible word combinations that refer to widgets. You also want to be as informative as possible.
  5. Equally important is the steady addition of content. ‘Content, content, content’ is fast becoming a mantra on the internet.

Professional SEO services

SEO is a very wide subject. Optimization work is carried out both on sites under construction, and established sites. A professional SEO strategist will look at an existing site, and see what improvements can be made. This is done by looking at the competition, for example, their keywords, and also by looking for places to create backlinks. It involves a lot of research, content change, and subsequent search engine results. After each composition change, it is necessary to wait for the results to show up, before the effects of the changes can be measured. It is a slow process which can easily take months.

Numerous alternatives to conducting your own SEO exist. There is a vast and growing market for SEO. There are many companies competing for your business. There is a difference between getting a high listing position, and keeping it. A tricky aspect of SEO is that it is an ongoing process. Therefore choose carefully, when you choose an SEO company, as they are likely to be a long-term partner in your growth. SEO companies that guarantee you a first, second, or third place listing should make you suspicious. There is too much variability to make such promises.

What can a new site expect?

Ideally, a new site will start out with a fair number of traffic generating strategies before rising to prominence in search engine listings. So, a new site might buy traffic, register with search engines and portals, submit their URL to paid and free listings, and possibly buy backlinks. As a site grows in popularity, and the frequency of spider visits increases, the percentage of traffic driven from listings will increase. Thereafter economic resources can be moved away from paid advertisements. It can be very satisfying to watch these percentages change.

How can Opentracker help?

Opentracker can:

  1. Give you accurate statistics and visitor behavior, customizable to any given time frame you are interested in.
  2. Tell you which words to build into your site through extensive search term tracking. For example, we provide you with chronological ranked listings of all the terms used to find your site. We also provide you with the clickstreams of the users who surfed in with those terms.
  3. Measure the percentages for you, and tell you which of your traffic is from standard results and what percentage is from sponsored listings. This will allow you to achieve an overall understanding of what your paid listings are bringing you.
  4. Tell you how effective your campaigns, paid listings or paid inclusion are.
  5. Show you which entry pages are the most popular on your site. You can see how many people come in to specific pages. This, in turn will tell you how well each page has been optimized, which changes to pursue, and which ones to drop.

Related Reading:

Identify and track your visitors

OT iconStart your free trial now!

Building Online Community

Building Online Community

A How-to Guide: Using webstats to build online community

Build and measure community: Strategies to attract visitors
‘Customer loyalty’ – getting visitors to return
Target audience behavior: Understand your clients and community
Visualize your website as a store
Learn from traffic patterns
Content management based on traffic statistics

Building (and measuring) a community of visitors to your site

One secret of sites like Facebook, Amazon, ebay, Twitter, and Yahoo is ‘customer loyalty’, which means a community of returning visitors. These sites have generated trust.

To begin replicating this process for your own site, benchmark your traffic community based on the variables outlined below.

This is the point of tracking: evaluate your marketing strategy (i.e. site content) based on performance in terms of what your visitors do on your most important pages. What do they do just before they convert from visitors to clients?

Click here for an in-depth analysis of how to Use Statistics for Decision-making.

Customer loyalty and returning visitors

Some sites we measure have a very good returning visitor ratio of 30-40%. This group of visitors is their customer client-base, the community. So, if a community has 100,000 members, over a given period of time, two months for example, then you have the population of a small city coming to your site and returning. This means that people are actively using the info in some way. The useful aspect of this information could not be deduced from ‘pageviews’ alone, but is only interesting when the pageviews are correlated to unique visitors. This will tell you, for example, how many pages the average visitor views.

Understand target audience behavior

There are road signs to tell you how a community is behaving. A community comprised of first-time visitors has few variables. All you know at this stage is that your campaign generates first-time visitors. The best investment is to try and build a community of returning visitors and study their behavior. We have a community at opentracker that returns on a regular basis. If this community starts to visit our site less frequently and for shorter periods of time, using less information, we will take a look at the indicators and evaluate why such changes are taking place.

Visualize your website as a store with real people coming in & out

Visualizing a store and actual humans is a good way to measure the performance of your site, and to try & visualize what people are actually doing in your store. The trick here is to remember that the numbers are generated by people. Are these people doing what your site is designed for? What is the ultimate conversion goal that you have set for your site? From which page on your site do the most people ‘convert’ as you want them to? Is there a banner or link that is most frequently clicked on? This single piece of information is tremendously valuable. Click here to read more about Website Visitor Conversion Activity.

Learn from traffic patterns

One statistic that can give you an idea of what people are doing is the list that tells you which pages are being looked at most. This tells you which part of your store is most popular. Imagine pages as shelves or sections of your store. Do you have ‘staff’ or help resources to help people make decisions? The pages that are heavily trafficked should receive the most of your attention when you manage your content. Keep in mind, also, that while certain pages do have a lot of pageviews, they are perhaps viewed by a minority of people. It is therefore not smart to focus on these pages, simply because they have a lot of pageviews. For instance we measure numerous sites with forums & chat pages that continually refresh, thus generating many pageviews from relatively few people. These pages do not need attention in the way of marketing optimisation.

Content management based on statistics

The most interesting statistics tell what is happening on your pages: how long people stay. Average viewing time above 20 seconds is very good. Most people click away in less that 10 seconds. Therefore, if people are reading & returning, then you know that the site is being used, people are continually coming back to check for information or research / make purchases. You know which information is the most important, generating more interest. A newspaper has no way of knowing how much time its readers spend on a page, this is a wonderful comparative advantage for a website. The goal is to take your stats & use them to improve your marketing strategies.
  1. Identify important pages.
  2. Evaluate their performance based on statistics.
Further reading: Here is an article we wrote on How to Make Statistics Work for you.

Articles & White-papers

Identify and track your visitors

OT iconStart your free trial now!

Traffic Conversion: Return on Investment (ROI)

Traffic Conversion: Return on Investment (ROI)

Start your free, no-risk, 4 week trial!
Track your visitors now

Summary overview

In this article, you will find information about:

  • What is a conversion rate?
  • How to improve your conversion rate
  • Conversion rates for pay-per-click (PPC) advertising
  • Conversion as a measurement of ROI
  • ‘Desired actions’ and ‘shortened paths to actions’
  • Drop-off points and leaks

Return on Investment (ROI)

Just like a brick-and-mortar business, a website needs careful management to ensure commercial success. Content management decisions should be based on web metrics, not guesswork. Setting measurable business goals and monitoring progress will help you to build a website that generates revenue.

Your website conversion rate tells you how many of your visitors are being ‘converted’ from visitors into clients, customers, leads, or subscribers.

If you purchase your traffic through a Pay-Per-Click (PPC) advertisingcampaign, or invest money into website management, then a visitor who has been converted into a client, or completed a purchase (an action known as a ‘desired outcome’) is a return on your investment.

A well built PPC advertising campaign with optimized search terms can bring you visitors at an acquisition cost of pennies-per-click.

Once visitors are on your site, optimized navigability is necessary to ensure that the traffic you worked so hard to drive to your website also finds what they want (provided that you have it).

An important feature of Opentracker that will assist you in this process is clickstream analysis. How many clicks stand between your visitors and the outcome that you desire? Are there obvious drop-off points between ‘add-to-cart’ events and checkout? A drop-off point, or a leak, is a place where visitors leave your site, but are not intended to do so. In some cases eliminating a click, leak, or drop-off place will lead to a substantial increase in conversion rate.

The idea is to identify bottlenecks and shorten the path to desired actions.

Professional real-time visitor analytics
Accuracy enhanced by first-party cookies

Steps to Improve Conversion Rate:

  • Reduce the number of clicks to your desired action
  • Identify drop-off points and eliminate them
  • Identify bottlenecks and improve traffic flow

Learn about your Conversion Rate:

  • What percentage of your visitors are converted?
  • What is your best source of converted visitors?

Learn about Visitors who Converted:

  • Study the visitors who complete specified actions and become clients
  • Do they come from a specific advertisement or search engine
  • Do they return?
  • Learn what your ‘model visitor’ looks like

Making informed business and content management decisions can make your webiste a profitable enterprise. In essence, conversion metrics are about finding out what works and putting your advertising dollars there. Use your statistics to track your progress over time. Measure a campaign from start to finish, evaluate, update your site, and measure again.

Glossary:
ROI
Goal
Conversion
Source

Identify and track your visitors

OT iconStart your free trial now!