July 30, 2003, 12:00 AM

Web Site Analytics

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Another online marketing realm on which analytics have shed particular light and even caused marketers to shift spending is in the area of keywords. With search pegged by some industry analysts as the third largest online market, it’s getting a bigger share of online marketer’s budgets. Increasingly sophisticated analytics can help validate that it’s money well spent - or not.

One way is tracking keyword results beyond simple click-throughs on to purchases, profitability, and ROI. “Some competitive keywords are really expensive when you look at their cost per click and cost per visit,” says Hieggelke. “But taking it thorugh click-through is just the beginning. You might be getting a lot of visits from a certain keyword, but they might just be tire-kickers, or shoppers who check your price pages and leave immediately, which tells you that they are price-sensitive, and that might not be your target audience. You have to judge the quality of that traffic.”

Net IQ’s WebTrends now not only tracks keywords and other campaigns such as banner ads and e-mail beyond click-throughs to conversion, revenue and lifetime value, but it recently added functionality that distinguishes between pay-for-performance and natural, or algorithm-based, search results.

That’s important because search engine users are becoming savvier about distinguishing between the two. Both types are delivering results for marketers and most search experts recommend a combination strategy that uses both. But to apportion both resources and time most effectively between the two, marketers need to measure the performance they’re getting out of each.

The coming rationality

“You have certain words on which you want to be ranked high in natural search results-but if you aren’t, you can get there by using paid ads. We’re still in a bit of a gold rush, with people buying thousands of keywords because they just don’t know. But people will become very selective about what keywords they pay for,” says Hieggelke. “Once they start measuring rationally with tools like the ones we provide, they’ll realize that there are certain words they need to pay for and others for which they should just cut bait and move on.”

Analytics have advanced retailers’ ability to use the power of the web to gather customer data. Retailers’ growing challenge today is not so much getting customer information as using it to form action plans that support business goals. That’s a sticking point for many-one reason that, despite a wealth of data potentially available from analytics tools, a whopping 60% of merchants who do measure search engine marketing campaign response measure only click-through rates and general traffic, according to a survey by NetIQ.

That sets the stage for analytics firms serving retail clients to help them make the leap by showing them how to use those results. And that, in effect, expands their role from technology provider to service provider. The top analytics providers will start to work in partnership with retailers to share knowledge and identify where and to start leveraging the data, says Berk, who adds, “We’ll see a lot more of that educational component in the coming year.”

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