Agencies that DO Incorporate Data Analysis in Their Media Planning Strategy vs. Agencies that DO NOT

August 11, 2009

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What is the difference?

Agencies that incorporate data analysis in their planning strategy

Agencies that incorporate data analysis in their planning strategy

Do you agree? Please share your thoughts if you’d like.

Eric Melchor

The FIRST company to provide online advertising professionals
with stress-free written, audio and video data analysis tutorials that
improve digital campaign performance.

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How much to charge for a new product?

August 2, 2009

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Profit Maximizing Analysis

Suppose you are selling concert tickets. You’d like to make the most profit as possible, but you are not sure what price to charge. How can you determine what the most profit-maximizing price is for the concert tickets?

Profit Maximing Analysis with Smart Digital Spending

Profit Maximing Analysis with Smart Digital Spending

Profit Maximizing Analysis in excel

Profit Maximizing Analysis in excel

Let’s suppose that you pay $25 for each ticket that you plan to sell. You are considering charging between $40 and $80 for a concert ticket. You believe that at a price of $40, you will sell 60 concert tickets. At a price of $60, you think you will sell 50 tickets, and at a price of $80, you will sell 25 tickets. What price should you charge for a ticket?

Download the Profit Maximizing Analysis from Smart Digital Spending. Step-by-step instructions so easy to follow a caveman can do it. Each tutorial comes with written, audio and video instructions including an Excel file that takes you from beginning to end on how each analysis was performed.

Eric Melchor

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Rich Media vs Static Ads

August 2, 2009

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Rich Media Banner vs. Static Ad

Rich media vs static ad

Rich media vs static ad

Most likely you have (or plan to) experiment with Rich media ads for your online campaign. Rich media ads are very cool since a consumer can interact with your brand through the ad by doing a variety of things and not actually having to navigate to your website. For instance, depending on how your Rich Media ad is created, viewers can answer questions, watch videos within the ad unit, print out useful information, and much more. As a result, there is a ton of data that these Rich Media units provide. But with all this data, how can we really tell how they perform against static ad units?

Rich Media Engagement Model

Rich Media Engagement Model

Rich Media Engagement Model video

Rich Media Engagement Model video

Well, watching a video, entering your email or printing a coupon means something right? Of course it does and that is where a Rich Media Engagement Model comes in. It shows you how to compare a rich media ad versus a static ad banner. For more information and step-by-step instructions that are so easy a caveman can follow along, download the Rich Media Engagement Model from Smart Digital Spending so that next time when your client asks you how the rich media ads compare against the static ads, you can answer with confidence!

If you have any comments or thoughts, please share. Thanks.

Eric Melchor

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Forecast Search Conversions

August 2, 2009

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How to forecast online conversions

Diminishing Returns Analysis - Smart Digital Spending

Diminishing Returns Analysis - Smart Digital Spending

Forecasting online conversions is quite easy if there is historical data available. If all of sudden you were given extra budget for your search or online display campaign, performing a diminishing returns model will help predict the amount of conversions you can expect to generate with this increased budget. Likewise, if you have to cut online spend, a diminishing returns model will show you the expected conversion volume loss as a result.

Let’s suppose we want to predict the increase in search conversions (dependent variable) based on an increase in paid search spend (independent variable). Would we use a linear or logarithmic-scale to determine our forecast equation?

Diminishing Returns written example

Diminishing Returns written example

Diminishing Returns written example 2

Diminishing Returns written example 2

The Optimal Spend tutorial explains step-by-step how to forecast online conversions. Written, audio and video instructions so easy to follow a caveman can do it! Also included is an Excel file with sample data based on a real-world case. 7 pages of written instructions and 11 minutes of video will take you from start to finish on how to construct a diminishing returns model. Helpful for when your client wants to know what is the maximum spend you can spend in order to maintain a cost-per-acquisition goal or forecast online conversions.

diminishing returns video

diminishing returns video

Smart Digital Spending is the FIRST company to provide agencies and online marketing professionals with written, audio and video tutorials on how to use data analysis to enhance campaign performance.

If you have any comments or thoughts, please share. Thanks.

Eric melchor

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Ad Copy Insight Analysis

August 2, 2009

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Which ad copy is better at influencing sales?

Which ad copy works better?

Which ad copy works better?

Regardless of whatever ‘Call to Action’ you use to try and influence sales on your website, there is probably one that statistically works better than others. If everything else stayed the same on the webpage (i.e. products, content) and the only factor that changed was the Ad Copy itself, you can compare the volume of orders placed when each ‘Call to Action’ was used by using a one-way Anova. A one-way Anova will tell you if one ‘Call to Action’ was statistically better than the others.

One-way anova

One-way anova

two factor anova

two factor anova

Okay, what if I was selling products on various days?

In this situation, two factors (the ‘Call to Action’ and the products being sold) are influencing orders. When two factors might influence a dependent variable, a two-way Anova (analysis of variance) can be used to determine which, if any, of the factors have a significant influence on the dependent variable. To see step-by-step written, audio and video instructions on how to perform the one-way and two-way Anova, refer to the Ad Copy Insight Analysis offered by Smart Digital Spending. An Excel spreadsheet along with sample data will take you from beginning to end on how to perform this analysis. Length of video is 12 minutes and there are 8 pages included in the written instructions.

Ad Copy Insight Analysis video tutorial

Ad Copy Insight Analysis video tutorial

Included in the Ad Copy Insight Analysis is a BONUS = Predict orders using the equation below:

Predicted orders = Overall Average + (Product Effect) + (Ad Copy used)

Eric Melchor

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Assess keyword performance with Efficiency Matrix Analysis

August 2, 2009

Quickly identify which keywords to drop and which paid search terms to invest more in!

It is quite easy to set-up a paid search campaign in Google or Yahoo! Google even provides some neat tools to show you which keywords are not showing up in top positions or receiving clicks. The problem with these tools is that there is too much information to look and play with (this is okay if you have lots of time to kill). Wouldn’t it be easier to classify keywords in 4 different categories?

Search Efficiency Matrix Analysis

Search Efficiency Matrix Analysis

Top Performers – High traffic generating keywords with low cost per clicks.

Potentials – Low traffic generating keywords with low cost per clicks.

The Uncertains – High traffic generating keywords with high cost per clicks.

Bad Performers – Low traffic generating keywords with high cost per clicks.

Performing a Volume/Efficiency Matrix can save you hundreds or even thousands of dollars in your paid search campaign! A volume/efficiency analysis will tell you whether certain keywords are performing poorly in efficiency and volume in relation to other keywords.

So how do we perform this analysis?

All that is required is a basic keyword report from your search engine that shows name of keyword, clicks and spend. By following along with the Smart Digital Spending tutorial, I will show you step-by-step how to process the data using an Excel spreadsheet and the keyword report from the search engine. The written instructions are 6 pages and length of video is just over 11 minutes.

Paid Search Keywords

Paid Search Keywords

Volume Efficiency Matrix Video

Volume Efficiency Matrix Video

The tutorials include written, audio and video instructions along with an Excel spreadsheet that contains sample data so you can see how the analysis was completed from beginning to end. Analysis so easy a caveman can do it!

Written Instructions on how to perform a Volume Efficiency Matrix

Written Instructions on how to perform a Volume Efficiency Matrix

Volume Efficiency Matrix Classification

Volume Efficiency Matrix Classification

The End Result?

The best part about performing a Volume / Efficiency Matrix is the findings. This analysis will give you a rough estimate on how much money you would save if you were to remove a certain group of keywords and show you how much click activity would be lost. It is a fantastic way to optimize a search campaign on an ad hoc, quarterly, semi-annual, or yearly basis. More importantly, your clients will be pleased that you are monitoring their search campaign wisely.

If you have any comments or thoughts, please share. Thanks.

Eric Melchor

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Online Marketing and Data Analysis

July 31, 2009

How does data analysis enhance online marketing?

The beauty of internet marketing is that if properly set up, everything can be tracked. And since impressions, clicks, and conversions can be tracked, data is available for analysis.

Online Marketing - Smart Digital Spending

Online Marketing - Smart Digital Spending

Data analysis can provide strategic insight and answer questions like:

  • How many search conversions can we expect if we increase search spend by 50%?
  • Should we implement a frequency cap on our display ads?
  • When running thousands of keywords, how can we optimize quickly and reduce spend?
  • How does media activity in one channel impact the performance of another channel?
  • Is there a better metric to look at than CTR and CPC?

Great, so how can we start using data analysis? Do we log into Google and press a ‘Data Analysis’ button?

Unfortunately it is not that easy, at least not yet. There are ‘Analytics’ people you can try and hire, but you may have a tough time since this kind of work is relatively new and there are not many experienced online marketing analyst around. Moreover, not every online analyst will be able to answer these questions. Some analysts just focus on research and know how to use tools like Comscore and Nielsen. Other analysts just do reporting and database management. The kind of analyst you need is someone who is focused primarily in digital media and has experience performing data analysis with REAL campaign data. They should at minimum know how to:

  • perform a diminishing returns model (forecast conversions based on historical spend)
  • know how to rank variables from best to worst across multiple metrics (rank mobile publishers)
  • perform an Independent T-test (so they can know which creative statistically works better)
  • do a regression analysis (understand how TV or online display impacts paid search)
  • know how to use Vlookups and pivot tables (organize data quickly and create reports)

Well I can go on and on, but these are some of the basics that an online marketing analyst should know. You can also learn how to do these in your MBA program. The stats class should cover these techniques. Or you can save money and time by just learning from the data analysis tutorials that I provide.

Sooner or later, your clients are going to start demanding accountability if they haven’t already. And data analysis is the answer.

If you have any thoughts or opinions, please share. Thanks.

Eric Melchor

Founder of Smart Digital Spending

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Data Analysis Tutorials for Agencies?

July 29, 2009

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How I thought of the idea to offer data analysis tutorials to agencies….

While working as a Media Analyst over the past few years, I realized I was essentially performing the same kinds of analysis over and over again for different accounts. The clients and media teams may have been different, but the analyses were roughly the same.

Smart Digital Spending Tutorials

Smart Digital Spending Tutorials

Clients ask the SAME questions and want to know that their agency is spending their advertising dollars wisely.

  • What is the maximum amount we can spend online each week in order to maintain our cost per acquisition goal?
  • Should we invest all our money in paid search so that we can be in the top position of search results?
  • Besides looking at CTR and CPC, how can we measure the performance of the publishers/sites we are running on?
  • Is there way to see all my media activity and campaign results in one report… like a Media Dashboard?

Different Clients…… Same Questions………Same Kinds of Analysis

Sames kinds of Analysis can be performed for any Advertiser no matter if:

  • The account is Large or Small
  • It is a branding or direct response campaign
  • The campaign has ran for several years or just a few weeks

I was performing the same kinds of analysis over and over using the same kind of data! Impressions are impressions, clicks are clicks, money spent is money spent, and conversions are conversions. Of course not every advertiser is the same, but their data is!

Analysis that help media planners evaluate publishers beyond CTR and CPC, techniques that enable search associates to quickly evaluate thousands of keyword, models that forecast conversion volume based on historical spend….. and more! These analysis are simple to perform yet very effective and can easily be learned! No need to take a statistics course, do not have to be an Excel whiz, Media Planners and Search Associates can do these on their own!

I provide you with step-by-step written, audio and video instructions! Each tutorial is based off a real world example. As shown,  written instructions also include illustrations of what to expect when working in Excel.  An Excel file with sample data comes along with each analysis along with a video that takes you from start to finish on how each analysis was completed! Your team can see how the data was organized and how formulas were calculated in Excel!

Online Marketing Tutorials

Online Marketing Tutorials

Snapshot of Excel file with sample data….

Online Data Analysis - Smart Digital Spending

Online Data Analysis - Smart Digital Spending

Snapshot of Video with Audio…

Smart Digital Spending Video Tutorial

Smart Digital Spending Video Tutorial

So why did I think of the idea of providing Online Marketers with data analysis tutorials designed to enhance campaign performance?

  • An experienced dedicated online media analyst costs too much money to hire. In addition, in today’s job market we know that employees change jobs every two years or so taking with them all that knowledge.
  • You cannot afford to waste time learning how to perform data analysis techniques on your own
  • You want to develop the skills of your media planners and search associates because the more your employees know, the better equipped they will be to solve problems, satisfy clients, and help your company grow

To see the full presentation on how I thought of the idea to provide agencies with data analysis tutorials, email me at eric@smartdigitalspending.com

Eric Melchor

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Best metric for measuring online success

July 23, 2009

Beyond CTR and CPC

Recently I came upon a question posted on LinkedIn asking if there were any good metrics besides CTR and CPC. While the question was already several days old, I was surprised to read the responses. Most of the respondents agreed that cost per conversion was the only metric that really matters. However, what if your client is not running a direct acquisition campaign? If your client is a service company or perhaps cannot sell their products on the web (i.e. Pharma, Consulting companies), then there is no cost per conversion metric.

Metrics not to use for measuring online success

Metrics not to use for measuring online success

Just because your ads may receive a high CTR on a certain site, this does not mean that the audience is actually navigating beyond the homepage. Even if you judge the performance of a publisher based on cost per acquisition, there are still other things you would like your visitor to perform while visiting your site.

So what metric can be applied to both branding and direct acquisition campaigns? Actually, what do I consider the best (and proven) metric for measuring online performance?

Well ideally you want your consumers to visit your key pages on your website correct? So lets imagine that you have a website where you sale tennis rackets online and in total, you have 12 different pages on this site. The primary action you want people to do on your site is buy a tennis racket. Here are a list of all the pages on your site:

  1. Homepage
  2. Selection of Rackets on Sale Page
  3. Famous quotes from John McEnroe
  4. 2009 ATP schedule
  5. Contact Us Page
  6. Learn about different tennis strings
  7. Rafael vs Federer blog – who is better?
  8. Tips from Jimmy Connors
  9. Sign up for Email Newsletter
  10. Past Grand Slam Winners
  11. Order Page
  12. Order Confirmation Thank You Page

While the John McEnroe quotes, Federer blog, and Jimmy Connors tips pages are amusing and helpful, they don’t really help sell tennis rackets on your site. However, you have an email newsletter that people can sign up for which is an important action you want your visitors to do. In addition, visitors reaching out to you are important, so the Contact Us Page is of value. Finally, you want people to go to the Selection of Rackets on Sale page from the Home page since this is where you display the rackets you are selling. Out of all these pages, there are 5 that you want your target audience to navigate to. (Order Page and Order Confirmation Thank You page being the other two).

Okay, so now what?

Cost per weighted Point Scale

Cost per weighted Point Scale

So now that we have determined the pages that we want our audience to visit, we assign a ‘weight’ to those pages. The more important the page, the higher the weight. Obviously the Order Confirmation Thank You Page is the page we value most since we know a sale took place, thus it is weighted the highest. If you are not selling any products, but have a ’sign up for newsletter’ or ‘print coupon’ page, those pages can be weighted the highest. Now that we understand the concept of a weighted scale and have established the amount of weight we are going to apply to our most important pages, we can move on to the report we generally pull from our ad server (Atlas, DoubleClick, Zedo or whichever ad server you use as your 3rd party).

Online report from ad server

Online report from ad server

A standard report will show the date, name of publisher, creative description, impressions, clicks, cost and the volume of actions that occurred on all the pages that are tagged. (actions are visits to all pages on the website). By following the Smart Digital Spending Weighted Point Scale tutorial, you will learn how to evaluate publishers on both a CPC method and a cost-per-weighted-point (CPWP) method. The written, audio and video tutorial (written instructions are 4 pages long, video is 9 minutes) will use a real-life example and take you from start to finish on how to implement the CPWP method. So easy to follow along, a caveman can do it!

Video Tutorial of CPWP

Video Tutorial of CPWP

After implementing the CPWP, you can compare the two methods of evaluation: Cost per Click versus Cost per Weighted Point. Comparing the two methods of evaluation will show you that making planning decisions based on CPC leads to media waste since we really don’t know if these publishers are driving the right people to key pages on our website. Utilizing a weighted point scale DOES show you which publishers you should drop from your campaign and which ones you should keep. Utilizing a weighted point scale leads to smarter media buying decisions!

Best Online Metric for Measuring Online Success

Best Online Metric for Measuring Online Success

Have any thoughts or opinions? Please share. Thanks.

Eric Melchor

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