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Metrics Measuring Success Why Measure? What Can We Measure? Who Measures? A New Media Needs New Metrics Metrics are used to: Define the properties of the media ... – PowerPoint PPT presentation

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Title: Metrics

  • Measuring Success
  • Why Measure?
  • What Can We Measure?
  • Who Measures?

A New Media Needs New Metrics
  • Metrics are used to
  • Define the properties of the media
  • Compare it to other media
  • Evaluate how the media performs

Early Indicators
  • Theres a search to identify numbers that
    quantify the value of Internet transactions,
    which eventually lead to figuring out the dollar
    value of exchanges.
  • Site traffic
  • Usage patterns
  • Effectiveness
  • Performance

  • Michael Tchongs Email Newsletter
  • "Which of the following metrics does your
    organization use to measure site activity?"
  • Metric
  • Unique visitors 59
  • Page views 57
  • Unique visits 50
  • Repeat visitors 38
  • Referral pages 32
  • Entry/exit pages 26
  • Browser type 22
  • Top-level domains 20
  • None of the above 15
  • Source Nov. 2000 ICONOCAST Inc./InsightExpress

Measuring ROI
  • Return on Investment
  • Most common reason for establishing metrics is to
    assess the effectiveness of what you are doing.
  • Source Iconocast, 9/02/98

One-to-One Marketing
  • The One to One Future Building Relationships
    One Customer at a Time, Rogers and Pepper
    (Doubleday, 1993) Their site is
  • Mass marketing will be replaced by one-to-one
    marketing relationship where the company learns
    more about the customer and how to serve him/her
    better as an individual.

Advertising Depends On It
  • You have to gather information about your users
    and argue the value of that audience to
    prospective advertisers.
  • Identify patterns that differentiate your site
    and your audience from others.

The Clickstream
  • Tracking User Activity
  • "the database created by the date-stamped and
    time-stamped, coded/interpreted, button-pushing
    events enacted by users of interactive media
    controlling their systems via remote control
    channel changers, alphanumeric PC keyboards and
    mice, numeric keyboards of PDAs and similar
    devices, and voice command of screen media."
  • Coalition for Advertising Supported Information
    and Entertainment, an advertising industry group.

Measuring User Activity
  • Hits, Files, Page Views Visits

  • correspond to physical files served
  • graphics intensive pages show more hits (HTML
    pointing to lots of gif or jpeg files)
  • an index of server load
  • not a reliable indicator of usage.

Page views
  • also called impressions and exposures.
  • a logical measure of usage based on what the user

  • a single user session
  • perhaps the most useful indicator but difficult
    to track unless cookies are used.
  • Top 50 Sites and Properties of September 1999

Greatest Hits
  • Why do hits continue to be used as a traffic
    indicator? One argument is that they are so easy
    to get a site owner doesn't need to spend much
    in analysis tools or services to know their hit
    count. Another reason might be that of any
    measure a site owner can provide, hits are likely
    to provide largest absolute number, e.g., "we are
    receiving 5 million hits per month!"
  • Internet Measurement Past Future

Requests and Impressions
  • Internet Advertising Bureau --"METRICS AND
    METHODOLOGY" (9/97)
  • Careful to draw the distinction between what is
    requested and recorded on the server side versus
    what is actually delivered to the client

Tracking requests
  • "The requested elements can be fulfilled from a
    number of locations
  • the visitor's local cache,
  • the ISP's proxy server,
  • the publisher's Web site,
  • or not at all -- images turned off, connection

Standard Definition of Terms
  • Online Advertising Terms
  • Internet Advertising Bureau
  • Table IAB Summary

Measure for Measure
  • There are different tools measuring some of the
    same information.
  • Visitor Management Tools
  • Source Iconocast, 10/07/98

  • Cost Per Thousand
  • CPM is the cost to reach a thousand people.
  • Sample CPM Rates
  • Average CPM (20-30)

  • How much of the total potential audience without
    duplication does a site capture?
  • Nielsen Top 10 Web sites
  • Nielsen Top Advertisers

  • How long do users remain at a site?
  • A pattern of usage measured in
  • Time
  • Pages
  • Games and Auction sites are sticky users stay on
    the site for a long time.

How effective is the Web?
  • Are Web CPM's too high when compared to other
  • Web ads may do better because of a lower ad/edit
  • A typical Web page is 91 editorial and 9
    advertising. Dramatic when compared to magazines,
    which are typically in the 50/50 range, and
    television, which is closer to 60
    programming/40 advertising. (Rick Boyce, IAB,
    Exploding the Web CPM Myth)

Click-through Rate (CTR)
  • Advertisers calculate cost-per-click how much it
    costs to advertise divided by the number of users
    who actually click-through to a site.
  • Click-through initially averaged higher than it
    does today. Down below 1.
  • Publishers argue that click-through rate fails to
    account for value of an impression.

  • User visits site and provides some information to
    the advertiser
  • Enter a contest, for instance.
  • Yoyodyne Entertainment is a company that
    specialized in online games and contests that
    allow companies to present promotional messages
    to the contestants. Mostly done through email.
    Sold to Yahoo. Business information at

Advertising Messaging Objectives
  • Increase Brand Awareness
  • Encourage trial of a service
  • Promote a product offer
  • Identify target customers
  • Closing a transaction

Advertising-to-Sales Ratio (A/S)
  • Computer industry spends 1.8 of its sales on
  • Book publishing is 10
  • Online businesses might be 14
  • AOL 12 CNET 25 Yahoo 49 (41 million in
    net revenue 20 million spent on marketing and

Effectiveness of Ads
  • "A study reports that returns on Internet
    advertising spending has nearly doubled since
    1994. Every dollar spent on Internet advertising
    this year generated 7 in sales, as compared to
    4 in 1994. " (Cyberatlas, Dec. 15, 1997)

Cost-per-sale (CPS)
  • Source Iconocast, 9/02/98

 Amazons Amazing Numbers
  • Its revenues doubled but its net loss in the
    period was 197 million, up more than four-fold
    from 45 million it lost in the same quarter last
  • Shares plunged 6.5, wiping out 1.6 billion of
    Amazons market value.
  • Source Gretchen Morgensen, Market Watch, New
    York Times, 10-31-99

Revenue Per Sale Declines While Cost of Sale Rises
  • Revenue per customer declined from 40.32 in 3rd
    quarter of 1997 to 27.16.
  • Revenues per new customer declined almost 20
    from 51.68 in 1997 to 41.51 today.
  • Cost per customer has risen 10.2, from 32.73 to
  • Source Gretchen Morgensen, NYT

Ameritrades Costs
  • Cost to sign up a new user have tripled from the
    157 per customer in the third quarter of 1997 to
    451 in the fourth quarter.
  • Source Gretchen Morgenson

Online Advertising
  • 4.6 Billion in 1999 up from 1.9 billion in 1998
    somewhere over 6 billion in 2000.
  • Consolidation
  • Top 10 sites 74 of all ad dollars.
  • Top 25 sites 87
  • Top 50 sites 95
  • Source Veronis-Suhler, 2000 Communications
    Industry Forecast.

Top 6 Web Advertising Categories, 1999
  • Computers 663.1
  • E-Commerce 278.1
  • Financial 191.7
  • Local Services 133.6
  • Media and Adv. 126.7
  • Automotive 79.2
  • Source Veronis-Suhler. Dollars in Millions.

Web Advertising by Type of Site
  • Type Percent of Ad Revenue
  • Portals 49
  • Niche Content 22
  • Traditional/Gen. 14
  • Other 15
  • Source Veronis-Suhler

Additional Resources
  • Cyberatlas
  • Project 2000 (Novak and Hoffman)
  • New Metrics for New Media (1996)
  • Flow model (1997)
  • MediaMetrix
  • Ipro Internet Profiles
  • Chronology
  • Nielsen Net Ratings

Additional Info on 1-to-1
  • Customer Differentiation Matrix (under Tools
    section on site.)
  • Wired Article Martha Rogers
  • Inc. Magazine Article1 Article 2