How can I cut costs in the right place?

Over the last 6 months, the most common question asked of our client services team is “How can I better understand my conversion rates?” Really, the underlying question is “How can I cut costs in the right place?”

Marketing budgets are being scrutinised like never before and every element needs to be justified with facts and figures. Each part needs to be analysed and a conclusion drawn as to which yields the best return and which the worst. In order to do this accurately, every organisation needs to have a structured approach to marketing analytics which should include a number of key elements.

Campaign Definition

Some organisations structure their budgets by the technology deployed while others think of a campaign as a multi-channel activity. Whichever mechanism is used, it is important for the definition to be sufficiently granular for analysis of cost and value to be achieved. If a campaign has multiple elements such as email, direct mail and telephone, then a decision must be made as to how value will be attributed. Similarly, if a conversion is achieved after a customer has been touched by more than one campaign, a decision must be made as to which campaign or campaigns are attributed with the sale.

Consistent Measurement

Having decided on a campaign definition, an organisation needs to understand the value of the conversions that each campaign yields. Ad serving, affiliate marketing, PPC and even email systems are all delivered with reporting platforms that provide useful information. Each however uses its own method to measure conversion and each will inevitably claim a conversion if this is possible. The opportunity for double counting and not comparing like with like is inevitable. As a result, what an organisation needs is a central independent system that if flexible enough to analyse every type of campaign and allocate conversions based on the businesses own criteria. Cognesia Explore is just such a system.

Cognesia Explore is able to treat a number of different visitor actions as a “conversion” including the capture of sales information, click-outs, downloads and form fills. It is even possible to treat a page view as a “conversion”. The system automatically identifies visitors as having come from search engine natural listings or PPC and records the keywords used. This allows an individual keyword to be considered as a visitor origin and its value compared with other keywords.

The value of email campaigns and inbound links can be analysed and compared with the value of banner adverts and affiliate activity. User can specify a piece of on-site creative as a campaign and look at how many visitors convert after clicking on the creative and what value the resultant business is. This flexibility even means that iCognesia Explore can be used to measure the success or otherwise of direct mail that offers promotion codes or directs visitors to landing pages or micro-sites.

“	In our experience quick wins are nearly always possible.	”
	Mark Wilding Head of Product Development Cognesia Ltd

Value Identification

Once an organisation has a consistent method of measurement and can attribute a conversion to a campaign or campaign component then it can look at the value that each provides. The value can be immediate or long term and analysis should be performed for both. Immediate value is generally attributed to the campaign that created the visit within which the conversion occurred. It is often the case however that a conversion will occur on a subsequent visit so Cognesia Explore is often called upon to analyse conversion rates over long periods of time rather than within the visit. In this case a website visitor may have, for example, initially visited as a result of a PPC campaign but then revisited the site a number of times using a saved favourite and purchased some time later.

Cognesia Explore can be used to attribute the value of a conversion or sale according to the organisations own specific criteria. In this way it is possible to identify which campaigns yield high value visitors and which do not. By applying relevant costs, it is generally possible to identify a number of campaigns that fall well behind the norm. It is Cognesia's experience that "quick wins" are nearly always possible and most organisations can make significant cuts with only a small effect on their overall business.