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Building Your Marketing Funnel with Google Analytics |
Building Your Marketing Funnel with Google Analytics Posted: 22 Sep 2013 04:21 PM PDT Posted by dohertyjf Do you have an idea of the path a user typically takes to convert on your website? Or, are you simply building traffic from one channel (probably organic) and wondering why it's not converting better? As I've grown up as a marketer, I've begun to really appreciate the insights that data can provide us on how users interact with our sites, and more importantly, on how they convert and where the experience can be improved to increase our conversion rates, and thereby our top-line revenue from online channels. I've recently been very interested in building a full marketing funnel based on Google Analytics data. While it's one thing to be able to identify where conversion discrepancies exist, such as low-converting types of visitors, it's quite another to build a full and informed funnel from your site's data. In order to do this and have an accurate view of where your conversions are actually coming from, you need to first have the following in place:
You can build your campaigns here using Google's tool. What's a funnel?Before we get too far into the meat of this post, I want to make sure we're all talking about the same thing. I'm not referring to one of these. Rather, I'm referring to one of these:
The funnel is typically broken into three sections:
The goal of this post is going to walk you through how to identify the channels that are performing best for you in each of these areas. Once you know those, you know where to invest depending on your company's needs or priorities. Also, knowing the different areas to which you can contribute will help endear you to the people running those channels, which will help you avoid being siloed as "the SEO." Instead, you will start to be seen as part of the marketing team, which is what you are. Another note: I'm not teaching you how to integrate into other marketing channels in this post. Stephanie Chang did a great job of it back in July when she wrote An Introduction to Integrated Marketing and SEO: How It Works and Why It Matters. Have a read there after you're finished here. Understanding attributionYou may already know this, but Google Analytics offers multi-channel attribution tools within the "Conversions" section:
In the "Assisted Conversions" section, you will see a number of columns. The ones to pay attention to are:
It's important to understand the difference between assisted conversions and last click/direct conversions. According to Google's own Answer Bin, a channel gets credit for an assisted conversion for any touch that they bring to the site where the interaction was not the one that led directly to a conversion. Google says: This is the number (and monetary value) of sales and conversions the channel assisted. If a channel appears anywhereâ"except as the final interactionâ"on a conversion path, it is considered an assist for that conversion. The higher these numbers, the more important the assist role of the channel. On the other side, a last click or direct conversion is a touch on the site that led directly to a sale. These are your closer, aka bottom-of-funnel channels. Google says: This is the number (and monetary value) of sales and conversions the channel closed or completed. The final click or direct visit before a conversion gets Last Interaction credit for that conversion. The higher these numbers, the more important the channelâs role in driving completion of sales and conversions. Make sense? Great. Let's build a funnel. Identifying channels based on funnel levelAs I said above, we're going to use Google Analytics to identify the channels in the different levels of your funnel. If you use a different Analytics platform, like Omniture or Piwik, write a guide using that and I'll be happy to share it out. Top of funnelThe top of your marketing funnel is where the first interactions with your brand take place. This is typically attributed to search or organic, but is that really the case for your website? First, let's identify the most common channels that people use to discover your site. To do this, go to Content > Site Content > Landing Pages. Set your secondary dimension to "Medium." You'll see something like this:
Now, export this data to Excel (I've provided a spreadsheet at the end that you can plug this data into) and pivot it to see which mediums are driving your best traffic. If you want to get super fancy, break it down by type of page as well.
Here's how that pivot table is set up:
For the site shown in these screenshots it is indeed PPC and organic search. But just knowing the channel isn't enough, so let's take it a step further to see where the different channels are driving traffic. You'll either need to manually classify your pages (if you have relatively few like in my example) or write an Excel script to do this automagically. I now know that referral is the primary driver of traffic and that the majority goes to the homepage. One specific referral, which I tagged with a Medium of "Link," sends the best traffic directly to conversion pages (which might not necessarily be the best place for people to land for their first interaction):
Middle of funnelThe middle of your funnel is the area where people are moving from a first brand interaction to an initial sale, or if they have already made a purchase, towards another sale. What we're looking for in the data here is channels that are not necessarily our primary first- or last-touch drivers. Rather, these are the channels where the 2nd, 3rd, and 4th-time visitors come from in order to interact with your content again. We can figure out the most popular and most effective middle-of-funnel channels a couple of different ways. The first, and by far the easiest, is by comparing different types of attribution to discover which channels get more credit based on first click, linear (where each channel gets equal credit), and last-click. To learn what each of the different attribution models really means, check out the Google support page. By sorting the Model Comparison Tool in Analytics by Linear (high to low), you can find the channels that perform best when given equal credit independent of where they are in the funnel.
But this doesn't give us great insight into which channels perform best in the middle. Rather, it's telling us which channels account for the most revenue overall (which is still important to know), and the place doesn't matter. In the above example, for Distilled that's Direct, then email, organic search, and referral, in that order. To find which channels are the most popular for your users to come back, we need to do some manipulation in Excel (my favorite tool) to clean out the first- and last-touch interactions in the Top Conversion Paths report.
What you want to do now is expand the number of rows in Analytics to account for as many of your paths as possible. For most sites the 5,000-row limit in Analytics will suffice. Download all of your conversion paths into Excel. You'll have one column with the complete paths, followed by the following columns:
To wrangle the data into the format we need, I also added the following columns:
If you're a visual person, this screenshot may help you out to see how the sheet is set up: Note: the hardest part here is figuring out what your cutoff is for conversion amount. For Distilled, for example, I removed anything under $30, because we don't do anything with the data underneath that. I also picked a minimum threshold for the number of conversions that channel brought. In Distilled's case, five seemed pertinent because it gives enough to get a decent idea of $/conversion but also eliminates the very long (20+) conversion paths that we're not going to optimize for anyways. However, also keep in mind that the length of the path matters. For example, Distilled's median # of steps before a conversion is eight. With fewer than eight steps, our average per conversion is 30% higher than it is with eight+ steps in the funnel. So, to clean up the data, I removed the following:
After you clean up the data, it will pull into the "Common Middle" sheet within the Excel workbook I link to below. Then, you can see pretty quickly which channels are driving the most middle conversions, and which middle paths give the best $/conversion:
Here's the setup for that pivot table:
Once again, this will automagically work for you in the Excel sheet. Bottom of funnelThe bottom of the funnel is the last touch that occurs before someone buys. These channels are incredibly important to know about because you can then build your strategy around how to get people into those channels and convert them later. This one is easy to find. It doesn't take tricky Excel functions. It doesn't involve crazy data analysis. Assuming you have Analytics set up correctly, you can find this data in Conversion > Attribution > Model Comparison Tool. When you set the Model to Last Interaction, you'll see something like this:
For Distilled, you can see that our highest last-touch channels are direct, then email, then organic search. Applying the dataRemember this funnel from the beginning?
Based off the data, I now see that for Distilled, the sections of our funnel look this way:
Now we can build out a marketing plan depending on our needs. Excel sheetI promised you an Excel sheet that I have put together for you. Note that it does not automatically clean out your very long conversion paths, but use the parameters given above to narrow down your data to make it actionable if that makes sense for your business. That said, you can download the spreadsheet here. Bonus Excel sheet to find profitability by # of touchesI mentioned above about finding the number of touches that perform best for you. Here is a quick and dirty spreadsheet that allows you to do just this. Basically, the sheet looks at the number of touches and averages the conversion amount for each bucket. You can see the results on the far right. To use this sheet for yourself, download your Multi Channel Funnel groupings in Analytics (you need to have ecommerce enabled) and enter your data into the sheet.
Download this bonus spreadsheet here. Example and conclusionIf we are trying to convert more people to DistilledU, through that goal I know that Organic converts best for us on the last touch. This means that we need to invest in content that drives people towards a conversion through organic, so either blog content with a call to action or larger content teaching people SEO. We know that email converts 4th best for DU, but it works well higher in the funnel to convert people eventually. Therefore, we need to get more people onto our DistilledU email list. Direct traffic converts well, of course; people are coming to the site because they know about it. Therefore we need to get top-of-mind and convert them into email and RSS subscribers so that they become familiar with our content and eventually buy through email or search. We've built our funnel. You should go and build yours. I'd love to hear what insights you have. Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read! |
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What tastes better, a $30 bottle of wine that's the cheapest the restaurant offers...
or the very same bottle at the restaurant next door, where it's the most expensive?
When asked about our experience, the essential question is always, compared to what?
What offers a better education: four years at your first choice selective college like Purdue or Williams?
or four years at the same place, but it's your last resort safe school, after you've been rejected by more famous (and thus selective) schools like Yale and Harvard?
What represents a better performance: a three hour marathon when you come in first in the small-town meet, or a three hour marathon when you come in last at the elite one?We often need a frame before we're comfortable evaluating value. Marketers regularly exploit this glitch by creating the illusion of value (or non-value) by highlighting comparisons, when in fact, those comparisons really don't have to matter.
Without a doubt, there are competitive items and experiences where extrinsic status matters, and where understanding the context of what is created is part of the point. Winning may in fact be the goal. For most of what we experience, though, it's our own interpretation of the experience itself that matters, not what a marketer tells us about how this ranks against that.
Good enough, is.
(Bonus: jazz).
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Mish's Global Economic Trend Analysis |
May Be a "Grand Coalition" Nightmare After All Posted: 22 Sep 2013 03:44 PM PDT As votes near final counting, CDU/CSU may be 1-3 seats short of an out majority. The projections posted earlier may be incorrect. For example Haartez and PressTV had stories proclaiming an outright majority for CDU/CSU. From Haartez German Chancellor Angela Merkel's conservatives are on course to win a historic absolute majority in Sunday's election, according to a projection based on exit polls and some results from broadcaster ARD.Even though it's a big win for Merkel, the Financial Times speaks of a "Grand Coalition Nightmare", noting Coalition uncertainty hangs over Angela Merkel victory. Even if Germany's knife-edge general election ultimately produces a grand coalition, the result is still a big personal triumph for Angela Merkel.The latest projection tally I now have suggests CDU will be 1-3 seats short. This is going down to the wire. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
FDP Out; Possible CDU Outright Majority; No Grand Coalition Posted: 22 Sep 2013 10:37 AM PDT Shortly after posting "Too Close to Call", reader Bernd pinged me with an update. "Polling agency ZDF predicts CDU/CSU has an absolute majority of 304 seats in Parliament." Bernd also added ... Hello MishThose who assumed a Grand Coalition was inevitable were simply wrong. It could still happen, but I doubt it. Why enter a coalition if you do not need to? Addendum: If AfD does squeak in, the absolute majority for CDU-CSU goes away. In that case, Merkel would have to choose between a coalition with AfD that would be relatively stable, or a coalition with SPD that would not be stable because of demands on minimum wages, banking unions, tax hikes, etc. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
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Computer wonks like to talk about garbage in/garbage out. A simple example: if there's a mistake in the way a blog post is encoded, many XML/RSS readers will choke on it, preventing all future posts from showing up.
The IT guys put up their hands and say, "well, if you hadn't had a lousy character, it wouldn't have broken... GIGO."
That's not resilient.
The work of the middleman is to inspect and recover. If your restaurant gets lousy fish from the boat, you don't get to serve it and proclaim garbage in garbage out. No, your job is to inspect what you get, and if necessary, change it.
If the school board gives the teacher lousy instructions, the teacher can easily put up his hands and say, "I'm just doing my job." The great teacher doesn't do that, of course. He provides a buffer between the administrators and the his real customers, the students.
There will always be garbage in. It's up to you as to whether or not there will be garbage out.
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Mish's Global Economic Trend Analysis |
Is Risk-Free Banking Possible? What About Fractional Reserve Lending? 30-Year Mortgages? Posted: 21 Sep 2013 08:58 PM PDT Reader "Nate" noted that Bloomberg columnist Megan McArdle stated that banning Fractional Reserve banking won't work. Nate asked "What would a future without fractional-reserve banking look like?" Let's start with a look at Megan McArdle's article: Banking Without Risk Is Impossible. The fundamental fact of a banking crisis, which is different from a crisis in any other industry, is that if people believe a financial institution to be bankrupt, it actually is bankrupt.Megan McArdle Wrong Twice For starters a 100% reserve system is indeed a "particularly libertarian solution" for the simple reason fractional reserve lending is fraud. If I lent you a house that I did not have ownership of (or rights of control to), I surely would be convicted of fraud. If I sold you 100 tons of wheat, and only had 10, I likewise would be convicted of fraud. Reflections on "Legitimate" Right-To-Use Some argue that as long as customers agree to these various banking schemes it is OK. However, it's not OK because such lending is nothing more than a gigantic kiting scheme. Moreover, it affects others by cheapening the value of money, pushing up asset prices for the benefit of those with first access to money, the banks and the wealthy. Logically, two people cannot have the right to use the same money at the same time, whether they agree to such a scheme or not! Banks are allowed to lend money that does not exist, but if you or I did it, we would be convicted of kiting (fraud). 100% Reserve System Does Not Mean There Will Be No Loans Megan McArdle is also wrong about lending. A 100% reserve system does not mean there will be no loans. Instead it means banks cannot make loans for longer duration than they have ownership or control of the money. If banks want to lend money for 30 years then need to have 30-year term deposits. If banks want to lend for 5-years then they need to secure money for 5 years. Might this mean the end of 30-year mortgages? Perhaps, perhaps not. Perhaps it just means the end of cheap 30-year mortgages. As far as I am concerned that would be a good thing. 30-year mortgages with credit created out of nowhere fueled the property bubble. Would it mean the end of mortgages? Certainly not but 10 and 15-year mortgages would carry a far lower rate than 30-year mortgages than they do now. And why shouldn't they? Are not 30-year mortgages inherently more risky? Checking Accounts vs. CDs Since checking accounts represent money on demand, banks could not lend them at all in a 100% reserve system. Such deposits would indeed be risk-free. They would be fee-based, but without risk. Want to collect interest on CDs? OK, but such deposits would no longer be risk-free. Notice that a run on the banks in a full reserve system is not likely. 100% of demand deposits are always available. And term deposits would match term-loans and no longer. Of course, banks can foolishly lend money and not be able to return it at the end of the period. But that is the risk people take when they lend banks money. If people do not want to take those risks, they can leave the money in checking accounts and pay a fee for storage. For more on the case against Fractional Reserve Lending please see
Please click on the second link above and read it. On page 46 of the book Case Against The Fed Rothbard says "By the very nature of fractional Reserve Lending, banks cannot honor all its contracts". Does knowingly entering a contract that one cannot possibly honor, constitute fraud? Of course it does. I have talked about these issues many times before. For a synopsis, please see Central Bank Authorized Fraud; Fractional Reserve Lending Problems Go Far Beyond "Duration Mismatch" . Megan McArdle seriously needs to read the eBooks above, starting with Case Against The Fed. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
Posted: 21 Sep 2013 12:29 PM PDT The data is a bit out of date, but the US Department of Education has a College Affordability and Transparency Center where you can see the highest and lowest tuition and net tuition (including aid) of various types of two and four-year colleges. The highest costs are over $60,000 per year. And that is just tuition and books, not just room and board. Business Insider commented on the costs in America's REAL Most Expensive Colleges. Fast Company also commented on the sad cost situation in How To Save $244,000 On Your Education. You, too, can experience the best that American education has to offer--without enrolling at NYU. Might I recommend that the curious would-be undergraduate or returning student check out:About Coursera The above links to Coursera, Enstitute, and General Assembly are Fast Company reports on those organizations, and well worth a look for those seeking alternatives to extremely costly education. I also encourage readers to go to the actual Coursera site. About Coursera®Future of Education is At Hand: Online, Accredited, Affordable, Useful On September 3, I wrote Future of Education is At Hand: Online, Accredited, Affordable, Useful. Please check it out. Avoid the College Debt-Trap Those with money to burn may wish to go (or wish to send their children to go) to 4-year brick-and-mortar colleges for $60,000 a year plus room and board. For everyone else who wants to avoid the college debt-trap, I strongly suggest exploring alternative approaches. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
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