It happens that online businesses are actively running ads and there seem to be a lot of appeals, but there is little money from these appeals. Why this is so, web analytics will help you figure it out.

Let’s imagine a store that is advertised in different channels — from contextual advertising to social networks. There are a lot of orders, but the trouble is that this does not affect profits in any way, because customers from the Internet buy mostly only the cheapest goods.

It can be assumed that the advertisement leads to the wrong product or the wrong target audience is selected. What is wrong with advertising, only the right analytics will show.

Web Analytics helps you understand:

• how different advertising channels work;
• how much does the company spend on attracting one customer;
• how to increase the number of customers and the number of sales.

Let’s figure out what web analytics is?

You can also use analytics to evaluate the work of a contractor, check landing pages, allocate an advertising budget, and test hypotheses for improving the site and advertising campaigns.

Based on the results of advertising campaigns, you can understand how a full-time or third-party marketer set up advertising. Warning signs — if there are few orders or many orders, but few payments. Evaluate the contractor’s work.

Compare advertising platforms. The same campaign on different advertising networks can produce different results. Web Analytics shows the difference in detail.

Check the landing pages. By the number of rejections, you can track whether the ad is relevant to the page: if visitors immediately close the site, they are most likely misled by the ad. For example, the product is too expensive or the link in the advertisement leads to the wrong page. Web analytics helps you track such deviations in time to disable ads that waste your budget.

Evaluate the value of the buyer. You can compare the cost of buyers who came from a search engine and from different advertisements. Determine which keywords bring the cheapest customers.

Analytics in Marketing: Why is it so Important?

To test hypotheses. You can make hypotheses based on analytics data and conduct A/B tests:

• which version of the product card works better — with a small image of the product or a large one;
• how best to show product photos is to display 10 small pictures or one at a time, but large;
• how to arrange the order processing.

But it’s not enough to just install an analytics system: to understand the effectiveness of marketing, you need to track the main performance indicators of the company.

By what indicators can you understand that online advertising makes a profit.

For online sales, it is important to take into account exactly how much money comes from sales and how much is spent on attracting customers. 

Therefore, you need to look at revenue, average receipt, expenses and return on investment in advertising — there are a number of indicators for its analysis.

Revenue is the main indicator of profitability of online sales. Ideally, you need to know the profit — how much money remains after deducting all expenses. In web analytics, it is not always possible to pull up all expenses, so it is revenue that is taken into account here.

The average check is another indicator that should grow over time if the business is developing. To increase the average check, you need to help the customer buy as much as possible: not just one product, but a product and some kind of addition to it. For example, a smartphone and a case. The store earns a little on the sale of a smartphone, about a 100$, due to the fact that the niche is highly competitive. Due to additional products, you can increase not only the average check, but also the profit.

If an online store or an online school conducts promotions to attract customers, you need to look at the revenue and the average receipt together. Attracting an audience is great, but revenue and the average check should not decrease. If they decrease, it is necessary to review the shares.

Attract More WebsiteTraffic, Convert More Sales!

Expenses. The costs of attracting a new audience must be controlled: if they exceed the profit from this audience, then the advertising is configured incorrectly.

The cost of the target action is CPA. The user put the product in the cart and sent a request for a callback. There are usually fewer such targeted actions than there are orders. But the cost must be taken into account, because this indicator directly affects expenses.

The cost of treatment is CPL. Not every request leads to an order, and even more so to the payment of the order. How much each one costs must also be counted. The cost of treatment should be lower than the profit: we must spend less money on attracting than we earn, otherwise we will go into negative territory.

The cost of the order is CPO. This indicator should be lower than profit in order for the business to be in the black.

Return on investment — ROI and the share of advertising expenses. These indicators link revenue and expenses: how much profit each dollar invested in advertising has brought.

The lifetime value of the customer is LTV. This metric helps to see which channels the most active customers come from, who bring the most money in the entire history of interaction — the so-called elephants.

The main thing is that the LTV metric helps segment customers and interact with each segment in a relevant way. There are customers who spend a lot of money on your products, constantly ordering something. You can actively send letters with promotions to them and involve them in the loyalty program. There are customers who buy very rarely and only on shares, no matter how many letters you send them.

How to start tracking metrics

To start analyzing online sales, you need to connect, for example, Google Analytics to the site.

• These services are free and help you track;
• how many customers go to the site;
• which pages and sections of the site are visited most often;
• how many customers went to the right page;
• which ads and queries are used to get to the site;
• whether the target action has been achieved — an order has been placed or a certain number of pages have been viewed.