Summary - Digital Marketing Essentials PDF

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This is my very detailed summary of the ebook relevant for this course....

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Digital Marketing Analytics Chapter 1: Digital Marketing Foundations 1. Technical Terms  URL = Uniform Resource Locator  Domain Name = the name of a website (e.g. Amazon.com)  IP Address = Internet Protocol Address – The Internet Protocol is a standardized set of procedures for locating computers connected to the Internet and for transferring information from one computer to another  Server = A computer connected to the Internet that fulfills information requests to the website  Browser = Software that displays webpages  Cookie = Unique identifier placed on a web browser during one of the previous visits on that website so that page can remember the user  Cookies are typically used to tailor the website experience to each user  HTML = Hyper-text markup language = A client-side coding language meant to display static webpages (that do not dynamically change content depending on the user  Example of Amazon page showing up 1. John types in URL www.amazon.com 2. URL is converted to an IP address 3. The information request for Amazon’s homepage is sent to the IP address, where the information request is received by Amazon’s server 4. Along with the information request, John’s browser also sends any data from any Amazon cookie stored on John’s computer (Because Amazon can identify John through his cookie, it can recommend products he is more likely to be interested in) 5. If Amazon were a very simple website, Amazon’s server would respond to the homepage request by sending HTML code back to John’s computer (John’s computer has his own IP address) 6. Amazon’s website is not a simple website, so instead of sending back a static homepage, the server will retrieve information about John’s past behavior on the site from a database – Amazon will use a dynamic, server-side programming language (Java etc.) to create a homepage tailored to John’s preferences; this tailor-made homepage is translated into HTML and sent back to John’s computer 7. John’s browser processes the HTML code and displays the homepage on his computer

 Every action John takes on amazon.com uses the same procedure just illustrated of making a request to Amazon’s server and a response from the server is sent back to John’s computer  Shopping Cart = Software that stores shoppers’ product requests  When John checks out, his personal information is sent using TLS  TLS = Transport layer security = an encryption method to prevent eavesdropping from third parties (its predecessor was called secure sockets layer (SSL))  Because of Amazon’s size, it owns thousands of its own servers to respond to all of the internet users wishing to browse its site and make purchases  Servers are expensive – not everyone starting a website should use their own server, but a web hosting company  Web hosting = Providing server space for others to run a website  Instead of buying a server, someone starting a small website will rent part of a server from GoDaddy etc. for a fraction of the cost 2. Successful Websites  For web-only businesses, where the website is the business, the website’s purpose is to create a customer  For other businesses, the website should help the customer creation process  One popular model of customer creation is the AIDA model:  The customer learns about a business and what it offers  He becomes interested in said offering  Then becomes desirous of purchasing something from the business  Finally takes action to make a purchase  The success of a website can be measured and monitored by examining its performance on each of the following three dimensions: (1) Generating traffic = bringing visitors to the website to drive awareness of the business (2) Driving conversions = facilitating website visitors’ interest and desire so they take a specific action (3) Maximizing revenue per conversion = increasing the monetary value of the customers’ action 3. Traffic  Greater traffic means greater awareness, and thus a larger pool of people who could potentially become customers  Direct traffic  Comes either from offline advertising activities (billboards, TV ads etc.) or from habit (e.g. sports enthusiast – espn.com)  URL doesn’t necessarily have to be typed into the address bar – could also navigate through a bookmark or a link in an email  Major advantage: The visitors likely were already aware of the business  already in the Interest or Desire stage prior to the website visit  Thus, they may be more likely to take action, because they already advanced through more of the stages  Major disadvantage: might be more expensive to generate awareness and/or interest outside of the Internet  Website usually need to consider a balance of traffic sources rather than rely on direct traffic only  Referral traffic  Paid referral traffic = comes from banner ads, text ads, video ads etc. that a website has paid to display on other websites  Unpaid referral traffic = visitors come to the website from any links that are not paid for (e.g. articles)

Links from other websites can increase search traffic by improving organic search rank, but they can also generate referral traffic  Search traffic  Unpaid search traffic = any traffic that comes to a site from clicks on the organic search results on the search engine results page (SERP) – being well ranked  Paid search traffic = comes from ads on the SERP that accompany the organic results (allows a company to target driven customers)  Advantage of search traffic: Visitors may already be in the desire stage 

4. Conversion  Conversion = A target action you wish your visitors to take  Conversion Rate = The percentage of visitors who convert  Conversion rate as one of the most important indicators of a website’s success  Information layout is key to conversion an any site (provide thorough sense of product; pictures; answer questions; easy-to-navigate purchase process; reviews)  A conversion can be defined in many different ways, depending on the type of website (For some websites, a conversion cannot be clearly defined): Online Sales, Advertising, Commissions, Subscriptions, Support a cause, Provide info to support offline sales, etc.

 Online Retail (eCommerce)  Conversion: the visitor makes a purchase  In addition to creating a customer through this first purchase, good retailers strive for secondary conversions that help to keep customers for repeated purchases  Visitors who create an account are more likely to come back  Another profitable way is to send them emails about products – visitors sign up for email lists  Some online retailers like Amazon have premium memberships that cost an extra annual fee for additional benefits such as free shipping  Lead Generation  Conversion: Generate a lead  Lead = an inquiry from a potential customer into a business’s products or services  E.g. potential customers call to hire for a job or fill out a lead form on the website  In some industries, the sales cycle can take a long time, so businesses need to nurture leads by providing the periodic information about their company and services – sign up for an email list or start a free trial

AIDA model can often be adjusted for lead generation: A lead is a much smaller commitment than making a purchase – the desire stage is often left out  As a result, conversion rates on lead generation sites tend to be higher than on retail websites Search Engine  Conversion: Booking  E.g. Expedia makes money when a user books a hotel or flight on its site  Secondary conversion: Get users to sign up for regular emails to achieve additional bookings (sending out special deals etc.)  An ad click-through is a conversion for search engines (e.g. Google) Media  Media websites have a conversion that is most difficult to define  Conversion: Media websites make money by exposing users to advertisements and they can expose users to more ads if they can keep them engaged  Engagement – more pageviews (typically by encouraging visitors to view more pages within a visit; enticing them to watch more videos etc.)  For some sites (e.g. Netflix), a conversion is more straightforward: sign up for a paying account Social Media  Conversion: New account creation  Such platforms also want their current account holders to remain engaged (interacting with content (like etc.) or creating content) Affiliate Marketing  Conversion: Visitors click on one of their affiliate links (and buy something on the destination website)  Affiliate marketers can only directly influence the click, thus a click-through is the main conversion  But by attracting the right kind of traffic, affiliate marketers can also indirectly influence the amount of purchase  secondary conversion: purchase Marketplace  Conversions: Buying/Selling  Platform for buyers and sellers, both are equally important  Secondary conversion: account creation 

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5. Revenue  (Monetary) success can be increased if the value of each conversion is increased  Retail  Increase average order value by encouraging customers to purchase higher-priced items or by encouraging add-on purchases  Deluxe versions; research on product recommendations  Lead Generation  Closing more lucrative deals, which occurs outside the functioning of a website  Manager of a lead generation website should track which traffic sources led to more lucrative deals  Search Engine  Order results in a way that encourages more lucrative bookings  Place the most lucrative ads in the best positions

 Media  Learn more about the users (collect user data) and learn what advertisements are effective – can charge advertisers more

Certain advertising formats (video, dynamic banners etc.) might be more effective than others  Social Media: Use users’ personal information to more effectively target likely customers  Affiliate Marketing: Providing links to higher-priced items will generate more revenue with the same click-through and conversion rates  Marketplace: Extra revenue by charging sellers to upgrade their listings or for supplemental services (add-on fees) 

 Constantly work to improve a website! First determine whether improvements are needed in traffic (broaden awareness), conversion (increase percentage of people who advance through the Interest and Desire stages to the Action stage), or revenue per conversion (increase value of each action)

Chapter 3: Analytics 1. How Analytics Work  Analytics program needs to be installed into every page of the website  Internet user takes some action that results in a request for a page on a website  web server passes on some information to a data-collection center run by the analytics package  data about all server requests is stored, aggregated and organized (in a way that enables the webmaster to make inferences about the nature of traffic on his site)  Analytics provide key pieces of Supplemental Information:  Identity of Requester: Identifies unique computers or devices through cookies – ability to identify repeat visits and organize behavior by session  Timing of Request: Timestamps enable to calculate how long users are spending on each page  Navigation Source: How users arrived at the website (URL, links etc.)  Technical Information: Operating system, browser, screen size, and internet connection type  Geography: General geography, typically zip code (not address)  Analytics packages allow for aggregating and organizing data  Aggregate statistics (e.g. total number of visits, total revenue, total time on site)  Break up data to show conversion rate for example  Provide reports of various behaviors (e.g. “traffic flow” report: Percentage of visitors moving from homepage to each category page)  Companies can customize the reports they see on their homepage – analytics are only as useful as the owner makes them 2. Metrics  Access to too much data can often lead to “analysis paralysis”  Metrics help make sense of analytics data  Basic Metrics  Pageview/Hit: Occurs any time a user accesses a page on a website  Session: Any time a user enters a website, he has created a session (can consist of one or more pageviews)  User: Someone who creates at least one session  Time on Page: Amount of time a user spent on a page before navigating to a different page  Entry: The first pageview of a session is the entry point (often not the homepage)  Exit: The last pageview of a session – user navigates outside the website or was inactive for over 30 minutes  Calculated Metrics

Average Page Depth: Pageviews divided by sessions (measure of user engagement with a website)  Average Session Duration: Sum of time on page for every pageview in the session  Site Bounce Rate: Percentage of all sessions that consist of only one pageview  Page Bounce Rate: Percentage of sessions that begin on that page that consist of only one pageview (people don’t browse, leave website)  Entrance Rate: Percentage of pageviews that begin on that page (page-specific metric)  Exit Rate: Percentage of pageviews that result in an exit (page-specific metric)  Unique Pageviews: Some sessions may hit the same page several times – removing these double counts can give a more realistic picture about the volume of traffic on a page  Manual Metrics  Several other useful metrics are not given automatically, because they require some specifications from the user  User must set up goals in analytics – four types: 

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Destination goal: a goal has been met when a user reaches a specific page on a site – for retail or lead-generation sites the goal is activated whenever a user reached the pages after placing an order or filling out a lead capture form Many behaviors do not load a new page – analytics cannot provide information about those behaviors unless an event goal is set up Egregious mistake: having analytics package installed but not set up goals properly – conversion rate and revenue per conversion cannot be tracked without them Revenue: Amount of money being spent on the order Revenue per Session: key metric that every retail site should follow – determines how much a company can spend on advertising to attract users to its site profitably

3. Key Performance Indicators  The relative importance of available metrics depends primarily on a website’s business model – websites of different types should have different KPIs  KPIs = Metrics the website considers to be the most important measures of its success  For more details see book  Retail KPIs:  Sessions  Conversion Rate (!)  Average Order Value (AOV)  Revenue per Session (RPS)  Lead Generation KPIs:  Users  Conversion Rate  Close Rate  Closed Deal Value  Revenue per Session  Media KPIs:  Sessions

 Average Page Depth (how many pageviews you have per session)  Average Session Duration  Conversions  Social Media KPIs:  New Account Sign-ups (Conversions)  Posts/Tweets/Pins/etc.  Links/Re-Tweets/Re-Pins/etc.  Average Time on Site  Search Engine KPIs:  Goal is to provide the best list of content possible to users – explicit goal to generate a user exit  Searches  Conversion Rate  Average Page Depth 4. Making Better Decisions with Analytics  Customer Creation Process and AIDA: Analytics provides data on how well a website is performing in advancing visitors through the Interest and Desire stages to take Action  Poor conversion rates are generally due to poor messaging on the website, poor audience selection, or technical glitches (e.g. card processing software not compatible with browser)  Channel Analysis  Sometimes different traffic sources have a greater share of desirable visitors than other sources (revenue per session) – examine the website KPIs by traffic source to gain insights on what investments would pay off  Organic Search: Analytics lets you break down traffic patterns by search term  Paid Search Ads: Track site behavior for each ad or ad group (including conversion rate)  Display Ads: Display ads likely vary on several dimensions (content, CTA, targeting method) – breaking down site traffic across these display ad varieties will indicate which ads are most effective  Emails: Conversion rates for clicking of particular parts of emails  Social Media Posts: Content created or shared by other social media users is the gold standard because it costs a company nothing  Social Media Advertising: Traffic patterns can be broken down  External Links: Some sites might be particularly good traffic sources – take action to foster a relationship with the referring site – make inferences about similar sites  Affiliate Links: Optimize the traffic which you pay referral fees to a partner website for  Segmentation  Any method of dividing customers into groups that differ in a meaningful and actionable way  Breaking down traffic by source is only one method of segmentation  Geography: Patterns may differ between regions – identifying the differences can provide recommendations for profitable changes (e.g. website in another language)  New vs. Returning Sessions: Turn new users into repeat users  Timing: Seasonality; e.g. traffic at night may worthless, don’t run ads  Browser: Behavioral reasons and technical reasons – some browsers may not display a site correctly – monitor continually  Screen Size: Divergent behavior from various user segments  Device: Technical and behavioral reasons – sites should be optimized behaviorally across device types and employ a responsive design that automatically adjusts pages and positioning to fit particular screen types  Conversion Funnel  E.g. retail site: users must go through at least 3 steps (shopping cart, check out, confirm order)

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Websites should be constantly trying to increase their conversion rate and the conversion funnel provides a useful way to divide the purchase procedure into steps

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Useful to determine biggest fallout points – proceed with A/B testing Every retail site (and other websites) should set up the conversion funnel in analytics so it can make a more detailed analysis of the conversion process

5. Attribution  Which advertisement is most responsible for a conversion? (E.g. Mr. Z books flight)  Last-click attribution: full credit for a customer’s action is given to the source that most recently brought the customer to the site for the purchase – simplistic, but also easiest and most common way to assign credit to advertising efforts  First-click attribution  Linear attribution: Equal share of credit to each click  Time-decay attribution: Some credit to all, but more to the most recent clicks  All these models are reasonable, but that’s the problem – what is accurate?

 Attribution Tools  Every attribution method is problematic and it’s virtually impossible to know which is most accurate  Google Analytics provides two very useful tools: (1) Users can run a sensitivity analysis with the different attribution methods:

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Users can do a side-by-side comparison of the results of multiple types of attribution » If the calculated ROAS (return on ad spend) for the various advertising channels is relatively consistent across multiple attribution methods, then one can be more confident in the results (2) Data-driven attribution (DDA) » This tool uses algorithms to calculate the ROAS of various advertising channels through counterfactual (what-if) comparisons » Example for a counterfactual: How much sales revenue would have resulted from 1000 customers if they had not been exposed to that banner ad? DDA performs this by finding another 1000 customers who were not exposed to this banner ad but were otherwise similar » Downside: requires large quantities of data and still cannot account for offline activities The most reliable way to measure the effectiveness of advertising is to conduct a carefully controlled experiment (experimental and control group)

Chapter 2: Web Design (Desktop and Mobile) 1. Principles of Good Web Design  Every web design decision should have the end goal in mind (conversion rate)  Get the website to its highest converting potential  Guiding design pri...