The 3 Levels of Digital Analytics

Roy McClean
Nov 23, 2013
The 3 Levels of Digital Analytics

You've set up your website. You're rocking a Facebook Page and Twitter account for your business. You're even blogging regularly! You even have an email newsletter on the go. And you're giving Google AdWords a go. Awesome! So now what?

Well, if you doing all of the above and you aren't measuring results isn't this like flying a plane without looking at the instruments? So much of the power of using the world-wide-web for business is utilizing the ability to measure what's going on with your online presence… and then reacting appropriately.

So many businesses aren't taken advantage of this very powerful opportunity. And so many of the businesses that are using digital analytics are only using metrics at a fraction of what they could be.

Noted Google analytics evangelist Avinash Kaushik refers to three levels of digital analytics maturity. As per Avinash you've got your "toddler's phase", your "rockin' teens" phase, and the ultimate "adult ninjas" measurement phase. I have my own terminology for these different digital analytics maturity levels: Getting Started, Better, Best.

3. The "Getting Started" Level

Think high-level metrics like visits and unique visits for your website. Think "clicks", "average cost per click" and "cost per acquisition" for paid marketing campaigns such as AdWords. OK. So you know your website visits or AdWords clicks have steadily increased over the past year. Great data right? Well, not so much I say. Knowing your website visits have increased by 52% year-over-year or 37% month-over-month really only gives you a little insight in what is happening with your website.

2. The "Better" Level

Now imagine this. You break through the "meh" measurement level and start thinking about conversions. Really push the edge of the envelope here. You know your AdWords campaign had 133 clicks yesterday. Meh! But what if you could measure now many of these clicks lead to actual sales or leads? Well, you can measure this. And most of the time it's not rocket science. You can often pull out data showing you the average currency of your sale. Can you say… Nirvana! You're tracking sales conversion.

The holy grail at the "better" level? Think cost per acquisition… simply calculated by the number of sales divided by revenue produced. Now you're cooking with gas!

1. The "Best" Level

Get ready for rarefied air. The next level of measurement not only takes into account actual sales or leads. After all, is a sale or lead the only useful "conversion" on your website? Ultimately, sales might be the most important but very, very rarely is this the only useful conversion to track.

Defining Conversion Levels with the Sales Funnel

Ever heard of that concept called the "sales funnel"? You might remember that from Marketing 101 courses. Lots of people add different terms to the steps in the sales funnel. I often quote the term "AIDA".

AIDAA = Awareness.

Congrats, someone "found out" about your business. Good first step.

I = Interest.

They learn about you and want to learn more about your business by visiting your website or your Facebook page. They even spent more than 60 seconds on your site checking you out. Cool!

D = Desire.

Your prospective customer is ready to take the next step. They'll sign up for your newsletter or download an info sheet after reading your blog or visiting your website product pages. Or they have shared your content using the Google+ share button on your shopping cart. Looking good!

A = Action.

The final phase of AIDA. They buy something from you. Or they fill out a contact form asking for a meeting. Time to light up an expensive cigar!

So why is the final "action" phase the only conversion point worth tracking? Well, it isn't.

Attaching importance to the other steps in the sales funnel is worth tracking too!

Start Assigning a Dollar Value for All Meaningful Conversions

Keeping this in mind we can arbitrarily attach a dollar value to various "conversions".

Let's say visitors stay on your website for at least 60 seconds. That's worth some value to you and your business. Let's just say that each person who stays on your website for a minute is worth $1.

What about a Peter sharing your product page with your Tweet This button promoting the blue widgets you're selling? Let's make a value judgment here and assign a value of $5 to this.

And you've written an awesome blog post and thereby convinced Sally to sign up for your newsletter. Why can't we assign a value of say $10 for an email subscription? Why not? Sally has just given you permission to communicate with her. That's worth something to your business…. No?

Your Awesome Digital Marketing

Image inspiration: Avinash Kaushik

So you get the idea right?

By assigning value to a variety of meaning conversions we can start getting a better idea of the true value of our website, blog, social media account or other online channel.

Now You Are an Analytics Ninja!

And if we can determine what campaign or marketing activity resulted in various conversion levels we have a really, really good idea of what marketing activity is working… or what isn't. Is search driving traffic? Are you spending lots of dough with pay-per-click advertising but not getting a return on investment? The "best" or Ninja level of measurement gives you a good idea based upon an actual dollar value. And you can make wonderful business decisions based upon actual data.

By doing this you can come up with an actual dollar value even by campaign. Avinash refers to this as "company impact".

Wonderful, glorious, stupendous! That's where you want to be.

Knowledgeable, informed, empowered!

Intrigued? Then check out the YouTube analytics session by the aforementioned Mr. Kaushik. It's about 60 minutes in length but if this intrigues you it will be worth your time.

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