How to Create a Laser Focused Digital Measurement Strategy

Are you struggling to make sense of your web analytics data? Don’t know what report to look at to optimise your marketing channels?

This article is about giving you a clear path by creating a digital measurement strategy. A way to weed out those metrics which just get in the way and allow you to focus on what information you need to make informed decisions about whether your marketing strategy is working or not.

Let’s start at the beginning.

There is no point in collecting web analytics data if it is not related to your digital strategy. And your digital strategy is defined by your business objectives.

Therefore, it is essential that you know and have your business objectives and the digital strategies written down, before you begin implementing for web analytics system.

Here’s the process.

Step 1: Determine your business objectives

At any point in time a business will have one key objective it is trying to achieve. Note the word key. A business can have multiple objectives, but there will be one which stands tall above the rest. (If there isn’t you may need to rethink your business strategy).

A startup that has just released a software product will most likely be concerned with getting their product noticed in the market. They want brand recognition and to acquire new customers.

An online retailer with many years experience may be less concerned with new customers and more concerned with increasing repeat purchase rate and minimising churn.

A blog may be getting lots of traffic but now need to focus on converting those visitors into cash.

Typically your business will be in one of five phase:

  1. Awareness (sometimes called acquisition)
  2. Activation
  3. Retention
  4. Revenue
  5. Referral

This is the Pirate Model developed by Dave McClure, so named because it spells AARRR (the noise a pirate would make). But it is synonymous with the five stages of the classic consumer decision journey.

I’ve seen two approaches to settings your business objective.

  1. Look at your business as a whole and pick the most important of the 5 stages to focus on.
  2. Create business objectives for each of the five stages.

Both approaches have merit, depending upon how much marketing resource you have available to you.

In this situation we will adopt approach 2, but for the sake of brevity only discuss the first two pages of the consumer decision journey: Awareness and Activation.

Awareness and Activation are not business objectives. We need to translate them into marketing strategies in order to meet objectives.

The main objective of an Awareness phase is to get attention and to make people aware of our products and services. The strategy is to bring a high volume of quality traffic to the website.

The main objective of an Activation phase is to get people engaged with us, not just coming to the site and leaving none the wiser. One strategy might be to ensure that everyone either reads our about page or interacts with one of the tools we’ve developed for the website.

Phase: Awareness
Objective: Draw attention to our brand
Strategy: Bring in a high volume of quality traffic

Phase: Activation
Objective: Give people an understanding of what we do
Strategy: Ensure that people read our about page or interact with our tools

Step 2: Compile your data sources

List out what data sources you have available to you, and which would be most useful for each of the business objectives. You can use first party data sources such as web analytics data, paid search campaign data, email data, CRM data, survey data or third party data such as Google search trends and Hitwise competitor info.

Don’t worry if you haven’t implemented the tools to collect the type of data you need yet. This phase is about brainstorming all the possible options you have at your disposal, before we begin narrowing our focus in the next step.

Phase: Awareness
Objective: Draw attention to our brand
Strategy: Bring in a high volume of quality traffic
Data sources: AdWords, Display networks, SEM, competitor information, Google Analytics

Phase: Activation
Objective: Give people an understanding of what we do
Strategy: Ensure that people read our about page or interact with our tools
Data sources: Google Analytics, short surveys, focus groups

Step 3: Determine your KPIs

KPI (key performance indicator) is an overused acronym. In this article I refer to the true definition of a KPI – a metric which is critical and that you couldn’t live without.

Someone should be able to tell you the value of this KPI and instantly you get an understanding of whether your strategy is working to achieve your business objective.

In order to determine your KPI, you need to go through the following process:

  1. Brainstorm possible metrics
  2. Combine metrics to form new rate or ratio metrics
  3. Pick a handful that best represent what you are trying to achieve

Let’s walk through this process now.

KPI step 1: Brainstorm possible metrics

Strategy: Bring in a high volume of quality traffic

Possible metrics:

  • Visits
  • Pageviews
  • Unique Visits
  • Bounce Rate
  • Cost Per Click
  • New Visitors
  • Entrances
  • Pages Per Visit
  • Time on Site
  • SEO rank
  • SEO impressions
  • Facebook likes
  • Retweets
  • Facebook posts
  • Tweets
  • Facebook comments
  • Tweet replies

Again, don’t worry about how we are going to measure some of these metrics. That comes later. And don’t filter and metrics just yet. Write down as many as you can think of that apply to the strategy.

KPI step 2: Combine metrics

A good metric is often a rate or ratio (check out Lean Analytics for more information). Rates and ratios make the best metrics because they are inherently comparable, and tend to compare two factors.

Take bounce rate, which is the ratio or bounces to entrances. Just looking at the entrances metric might give us the impression that our strategy to bring in a high volume of quality traffic is successful. But entrances doesn’t help us determine traffic quality.

Similarly, bounces gives some indication of traffic quality, but is useless unless we compared it to the number of people visiting our site. For example, if I told you your website had 100,000 bounces last month you would think there was a big problem. But if I put that into context by saying you had 10 million entrances, you would be very happy with your 1% bounce rate. By combining the two metrics into a single bounce rate metric, you get a better handle on what is really going on.

So now we have to combine our metrics to form rates and ratios that will help us determine if our actions are successfully bringing in a high volume of quality traffic or not.

  • Bounce rate
  • % new visitors
  • Cost per non-bounce visit
  • Non-bounce visits per £1 ad spend
  • SEO traffic quality (Organic non-bounce visits / organic impressions)
  • Visits per tweet (Visits from twitter / tweets)
  • Avg. Facebook replies (comments / wall posts)

Above are a few of my brainstormed rates and ratios. Notice how some of them have inherent segmentation built in.

KPI step 3: Choose a KPI

Next you have to decide which of these metrics provides the best indication of whether you are achieving your objective.

If our business was spending a lot on display, SEO and paid search, then the ‘Cost per non-bounce visit’ metric as my KPI, determined by dividing the number of non-bounces sessions by total ad spend, might be a good choice.

Month Cost per non-bounce visit Ad Spend Non-bounce sessions
Jan £0.92 £9,200 10,000
Feb £0.96 £11,500 12,000
Mar £0.89 £12,500 14,000
Apr £1.22 £22,000 £8,000
May £1.18 £20,000 17,000
Jun £1.00 £20,00 20,000

Consider the table above which shows by new metric, along with the two metrics used to calculate it. By looking at the Cost per non-bounce visit column it is clear to see that from April onwards something has changed for the worse. The cost has gone up, indicating that either quality visits has decreased for the same cost or they have become more expensive to bring to the site.

As a marketing manager I would only need to look at this one metric to know that what I am doing to ‘bring in a high volume of quality traffic’ needs tweaking because my recent efforts are proving less successful than they did in the first three months of the year.

Let’s look at Non-bounce visits per £1 ad spend.

Month Non-bounce visits per £1 ad spend
Jan 1.1
Feb 1.0
Mar 1.1
Apr 0.8
May 0.9
Jun 1.0

Similar to the table above, this metric tells us how much quality traffic we can expect for each £1 spent on advertising. April, May and June suffered as our traffic quality dropped.

Ensure that whatever KPI you choose is useful for determining your next action. In the two examples above it is clear that quality of traffic is an issue, and needs to be investigated by the teams responsible for brining in the traffic.

Our second strategy is to give people a good understanding of what we do. Potential KPIs might be percentage of new visitors that use the tool.

Why?

Because we want to make the tool as discoverable on the site as possible so that people get an understanding of what we do on their first visit.

Month % new visitors who use tool
Jan 40
Feb 45
Mar 50
Apr 50
May 52
Jun 55

Looking at the table gives everyone a clear understanding that more new visitors are finding and using the tool, and that the changes we are making to the site structure are taking effect. If we made another change at the end of June and July’s number dropped to 30%, it is obvious it was a bad change and we can correct.

Step 4: Putting it all together

You now have an objective, strategy and KPI for each phase of your consumer decision journey.

Phase: Awareness
Objective: Draw attention to our brand
Strategy: Bring in a high volume of quality traffic
KPI: Non-bounce visits per £1 ad spend

Phase: Activation
Objective: Give people an understanding of what we do
Strategy: Ensure that people read our about page or interact with our tools
KPI: % new visitors who use tool

These KPIs allow us to determine if changes we are making are helpful or harmful, and they are clear and understandable for everyone in the business.

I’m not suggesting that you only ever look at KPIs. I’m suggesting that KPIs should be your first port of call to determine if you are heading towards or away from your business objective. If away, then you can drill down into the other relevant metrics and understand why your KPIs have moved in the wrong direction.

Beware vanity metrics

If you are using metrics such as page views and visits as your KPIs, then I urge you to complete the steps above. As mentioned, absolute numbers can often be misleading and cause you to make bad recommendations.

Consider this example where our KPI is number of visits from Twitter.

Month Visits from Twitter
Jan 1,000
Feb 1,200
Mar 1,400
Apr 1,800
May 2,400
Jun 3,000

Looking at your report everything looks healthy. Visits from Twitter are steadily increasing month on month. But there is no indication here of traffic quality, nor of how much effort (time and cost) you are putting in to achieve these numbers.

Consider a new metric, visits per tweet, defined as the number of visits from Twitter divided by the number of tweets put out my your social media team.

Month Visits per tweet
Jan 30
Feb 25
Mar 35
Apr 20
May 15
Jun 12

These numbers tell a different story. Yes you are getting more visitors but the effort you have to put in is increasing. In January you got 30 visits for every tweet sent. In June you get less than half of this. And yet in January you sent out 33 tweets but in June you sent out 250.

In other words you are working harder, not smarter, and the efficiency of your social media campaign is on the decline. This ‘Visits per tweet’ metric alerts you to the danger, the ‘Visits from Twitter’ metric doesn’t.

Summary

The purpose of this article is to give you a model for devising your own digital measurement strategy – one that inspires action and is laser focused on your business objectives.

Doing this exercise will help your entire organisation focus on what really matters and will make a difference, rather than getting sidetracked by numbers that don’t mean much at all.

I urge you to review what you are measuring and draw up a new set of KPIs based on the principles outlined above. Once you’ve done that, circulate them around your business. Having everyone focused on one or two metrics breads a culture of responsibility and action. When people have the laser focused clarity of what needle they need to more you’ll find magic starts to happen.

No more squabbles in meetings as people attempt to interpret spreadsheet after spreadsheet of complex figures and numbers. Leave the data analysts to do that. You, as a tactician and strategist don’t need to get bogged down in the details.

You just need to know what your KPI is, whether your latest change to your marketing campaign or website helped or hindered that metric, and what you are going to do next.

Ed Brocklebank is the founder of Metric Mogul, a digital analytics consultancy. He helps business of all sizes become more data-driven through marketing technology. He runs training for General Assembly London on Google Analytics and Google Tag Manager.