Measuring relationships

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With all the excitement about the emergence of Web 2.0—video, podcasts, RSS, AJAX, Flash, social media and more—the real story for b-to-b marketers isn't the flashy new content and interfaces those technologies enable. Rather, it's the fact that Web 2.0 enables companies to have much deeper and long-lasting relationships with their customers—relationships that can be quantified, measured and optimized like never before.

That's the word from technology providers, marketers, agencies and analysts that are working the still-emerging intersection of Web 2.0 and analytics 2.0. It's a place where page views and visitors have been replaced by concepts such as events and engagement—to the undeniable benefit of marketers that can figure out how to take advantage of these new mountains of data and streams of more dynamic customer interactions.

"It's all a matter of events now. If someone is trying to accomplish something on a Web site, you need to track and analyze the trip wires they are setting off," said Jim Sterne, president of the Web Analytics Association, which will sponsor the first presentation from its Web 2.0 working group at the upcoming eMetrics conference in May. "We used to think about page views being events. We were wrong; this is much better."

The biggest change is no longer focusing on user visits but rather the level of customer engagement.

"If you only care about how many people come to your Web site, that's a thing of the past," Sterne said. "Now, it's what does their behavior look like on your Web site. Tomorrow, it will be how do I combine the behavioral data I have on online customers with offline, call center and mobile phone data—what do I know about my customers and how can I profile them to create a holistic picture."

All of this may seem a bit distant from most of the talk about Web 2.0 today but by focusing on the measurement aspects of Web 2.0, marketers can find the true value beyond the buzz phrases and gaudy interfaces.

Although Web 2.0-driven Web sites and applications are still in their infancy, Web analytics vendors say they are ready to help marketers analyze the impact of these new technologies. In many cases, Web 2.0 technologies aren't new at all—Javascript has been around forever; Flash interactivity is old hat; video and audio are longtime Web standbys.

That means that most analytics vendors have the capabilities within their existing tools to measure how users interact with Web 2.0 types of applications. They can measure video views or podcast listens. They can see what buttons or sliders users move on a Flash, Flex or AJAX app. And they can track the contributions and click paths as visitors move through a social network environment making comments, rating posts or uploading content.

"A lot of these technologies have been around a long time," said John Squire, senior VP-product strategy, GM marketing services, at Coremetrics. "What's new is figuring out how to track participation and turn that into a measure of the life cycle of value creation for each individual customer."

To accomplish this, Coremetrics' tools and services focus on measuring three central Web 2.0 metrics: conversion events, or the path the customer takes to complete a particular task; participation metrics, such as user posts of content uploads or forum posts; and element tracking, or user interaction with different elements within a Web page.

Together, these metrics give a marketer a detailed feel for how a visitor is interacting with your Web site and if they are accomplishing what you'd like them to do, Squire said.

The effect of this change in orientation can be massive. Coremetrics has tested the impact of user contributions to Web sites in the form of on-site product reviews. Compared to a base group that didn't read or contribute product reviews at all, people who read a review were 30% more likely to purchase a product and visitors who wrote a review were 80% more likely to convert, Squire said. "When a customer participates, they become more engaged and invested with your brand," he said.

To achieve Web 2.0 success, marketers must decide what they plan to measure before they build an application. Working with site designers, marketers must map out the desired visitor path-flow, build in tracking techniques and determine clearly what constitutes the success or failure of a particular Web 2.0 program.

"The No. 1 thing that is often overlooked in Web 2.0 planning by marketers and their agencies is `what are your objectives and goals for this campaign,' " said Tim Kopp, chief marketing officer at WebTrends and a former Coca-Cola marketer focused on Web 2.0 initiatives.

Once marketers figure that out, they next have to decide what elements of a Web 2.0 application move a user toward the goal. "Then you build your measurement around that," Kopp said.

"One of the great things about Web 2.0 is that it really gets a marketing organization thinking more about what they want visitors to do on their Web site and thus create the experience that will cause them to do that," Kopp said.

"Now that we're measuring interactions programmatically on the page, that has to be done through code that is built into the application, not through tags in an HTML header or a simple [single-pixel GIF] image on a page, said Charles Wiedenhoft, director of user experience at interactive agency Red Door Interactive. "There's a lot more legwork involved to modify the code of [an online game, or widget or video] to collect the data you need. You also need to be much more creative with the metrics you look at, including different combinations of metrics."

Sifting through the data

The most challenging—and for practitioners perhaps the most interesting—step may be determining how to sift through the piles of Web 2.0 analytics data to figure out what it all means. Here we get into concepts such as user engagement that attempt not only to track what a visitor does on your Web site—not to mention other Web sites—but somehow measure the intensity and quality (i.e., good or bad) of their experience as well.

"You need a fairly sophisticated approach and tool set to determine [Web 2.0] key performance indicators," said Eric T. Peterson, author of "Web Analytics Demystified" (Celilo Group Media, March 2004), VP-strategic services at WebSideStory/Visual Sciences and a former JupiterResearch analyst. "It really involves figuring out the link between what happens on my Web site as far as visitor activity and what those users do off my Web site as well" on blogs, social networks, bookmarking sites and more.

On his book blog, Peterson has been working with other Web analytics experts to experiment with Web 2.0 key performance indicators. "What you're looking for," Peterson said, "is a highly engaged visitor who comes back frequently, clicking a lot. They are also using Digg or to create a "social bookmarklet" for the site, thus directly referring traffic to you. They may even be blogging about the site. These are the new measures of engagement."

"How do you come up with a unified scorecard, for lack of a better word, that attempts to measure the impact of all those different elements in different media channels," said Anton E. Konikoff, CEO of interactive agency Acronym Media. "It's really hard. But when you start collecting intelligence on how customers interact with you and your content, you go beyond informing your next campaign decision to an always-on optimization based on a real-time flow of data."

When approaching next-generation analytics this way, marketers will quickly reach a new intersection: the combination of Web 2.0 and word-of-mouth. While Web analytics traditionally look at visitor activity on one's own Web site, word-of-mouth tools try to track conversations about your product or brand around the Web. Such tools could be as simple as a topic search on Technorati or as complex as emerging tools—most often used by public relations professionals—that help track company/product mentions around the Web, basically glorified clipping services.

The Web analytics industry seems to be in a state of constant consolidation, and the emergence of Web 2.0 may only accelerate that trend. Look for the combination of traditional Web analytics vendors with players in portal and content management, personalization marketing and e-mail automation, buzz measurement, search, A/B testing and business intelligence areas, several observers noted.

This will result in a Web 2.0 marketplace and vendor space that looks much different than today, and one that will help marketers move that much closer to the nirvana of being able to track, measure and optimize.

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