Thursday, June 09, 2005
Advertising Up, Confidence Shaky:
"Published: June 09, 2005
(After June 17, 2005, this article will only be available to eStat Database subscribers.)
A new survey finds most businesses aren't very confident about measuring their Web marketing. Cookies are the reason why.
Internet advertising appears to be the picture of health. The latest report from the Interactive Advertising Bureau shows online ad spending totaled over $2.8 billion for the first quarter of 2005, the highest quarterly total ever. One of the main reasons marketers give for the growth of online ad spending is that the effectiveness of online ads can be better measured than print, radio or television ads.
But according to a new report from WebTrends, the 'Web Marketing Confidence Survey,' only a few marketers are 'very confident' in the measurements of their Web marketing efforts.
When it comes to measuring Web marketing, 43% of the marketing professionals said they were 'fairly confident,' while only 5% said they were 'very confident.' The remaining marketers were split, with 26% being 'moderately confident' and 26% admitting to 'flying blind.'
There are several reasons for their uncertainty, and they have to do with the use and misuse of cookies.
A number of firms have found that many consumers don't understand cookies — and are increasingly deleting or blocking them, creating tracking problems. But marketers, as well, often lack a basic understanding of their sites' cookie strategy and Web analytics best practices. The WebTrends survey found:
* 39% of respondents said they have "no idea" what method their web site is currently using to identify unique visitors
* Only 19% of respondents utilize legitimate first-party cookies — the recommended best practice to track unique visitors
* 13% identify visitors by IP address only — a largely inaccurate method to track visitors and their behavior
* Only 20% have a comprehensive set of metrics to measure campaign performance
* 52% are still only looking at clickthrough rates or nothing at all
It's little wonder that marketers are uncertain as to whether or not Web metrics represent an accurate picture of campaign performance and visitor behavior.
The WebTrends study notes that cookie-dependent analytics solutions rely on cookies to identify one unique browsing session from another, which is tough to do when third-party cookies are being rejected or deleted on a regular basis. Shaky measurements result:
* Inaccurate Visitor Metrics. At its most fundamental level, if an internet user has configured his browser security settings to automatically reject third-party cookies, that visitor will not be properly counted. This could be anywhere from 12%to 28% of Internet users.
* Deceiving Retention-Based Metrics. Taking this one step further, if "John Doe " visits a web site on May 15 and accepts the third-party cookie, he will be recognized as a new visitor. But if JD deletes his third-party cookies on May 16th and returns to the site on May 17th, the analytics solution will again identify him as a new visitor. This results in an under-representation of retention-based metrics, such as repeat visitor rate or loyalty index.
* Inaccurate Conversion Metrics. Cookie deletion also has an impact on the conversion rate for new visitors versus repeat visitors. Repeat visitor rates can be under-counted and new visitor rates over-counted, skewing conversion rate metrics by which a site's overall effectiveness is measured.
* Unreliable Campaign, Search and Merchandising Reports. In addition to tracking the behavior of a visitor to the site in general, many analytics providers correlate visitor response and site interaction to a specific campaign, search engine or product in an attempt to understand precisely which campaign or merchandising offer inspired the user to take an action. Much of this information relies on data stored in a cookie. If the cookie is rejected or deleted from the internet user 's browser, reports designed to identify latent or deferred conversion to a campaign or merchandising offer will be misrepresented. And, the longer the conversion is tracked, the more likely it is that the metrics are inaccurate — as the likelihood the user will delete the third-party cookie increases. "
"Published: June 09, 2005
(After June 17, 2005, this article will only be available to eStat Database subscribers.)
A new survey finds most businesses aren't very confident about measuring their Web marketing. Cookies are the reason why.
Internet advertising appears to be the picture of health. The latest report from the Interactive Advertising Bureau shows online ad spending totaled over $2.8 billion for the first quarter of 2005, the highest quarterly total ever. One of the main reasons marketers give for the growth of online ad spending is that the effectiveness of online ads can be better measured than print, radio or television ads.
But according to a new report from WebTrends, the 'Web Marketing Confidence Survey,' only a few marketers are 'very confident' in the measurements of their Web marketing efforts.
When it comes to measuring Web marketing, 43% of the marketing professionals said they were 'fairly confident,' while only 5% said they were 'very confident.' The remaining marketers were split, with 26% being 'moderately confident' and 26% admitting to 'flying blind.'
There are several reasons for their uncertainty, and they have to do with the use and misuse of cookies.
A number of firms have found that many consumers don't understand cookies — and are increasingly deleting or blocking them, creating tracking problems. But marketers, as well, often lack a basic understanding of their sites' cookie strategy and Web analytics best practices. The WebTrends survey found:
* 39% of respondents said they have "no idea" what method their web site is currently using to identify unique visitors
* Only 19% of respondents utilize legitimate first-party cookies — the recommended best practice to track unique visitors
* 13% identify visitors by IP address only — a largely inaccurate method to track visitors and their behavior
* Only 20% have a comprehensive set of metrics to measure campaign performance
* 52% are still only looking at clickthrough rates or nothing at all
It's little wonder that marketers are uncertain as to whether or not Web metrics represent an accurate picture of campaign performance and visitor behavior.
The WebTrends study notes that cookie-dependent analytics solutions rely on cookies to identify one unique browsing session from another, which is tough to do when third-party cookies are being rejected or deleted on a regular basis. Shaky measurements result:
* Inaccurate Visitor Metrics. At its most fundamental level, if an internet user has configured his browser security settings to automatically reject third-party cookies, that visitor will not be properly counted. This could be anywhere from 12%to 28% of Internet users.
* Deceiving Retention-Based Metrics. Taking this one step further, if "John Doe " visits a web site on May 15 and accepts the third-party cookie, he will be recognized as a new visitor. But if JD deletes his third-party cookies on May 16th and returns to the site on May 17th, the analytics solution will again identify him as a new visitor. This results in an under-representation of retention-based metrics, such as repeat visitor rate or loyalty index.
* Inaccurate Conversion Metrics. Cookie deletion also has an impact on the conversion rate for new visitors versus repeat visitors. Repeat visitor rates can be under-counted and new visitor rates over-counted, skewing conversion rate metrics by which a site's overall effectiveness is measured.
* Unreliable Campaign, Search and Merchandising Reports. In addition to tracking the behavior of a visitor to the site in general, many analytics providers correlate visitor response and site interaction to a specific campaign, search engine or product in an attempt to understand precisely which campaign or merchandising offer inspired the user to take an action. Much of this information relies on data stored in a cookie. If the cookie is rejected or deleted from the internet user 's browser, reports designed to identify latent or deferred conversion to a campaign or merchandising offer will be misrepresented. And, the longer the conversion is tracked, the more likely it is that the metrics are inaccurate — as the likelihood the user will delete the third-party cookie increases. "
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