Return on investment is considered to be the ratio of the cost of advertising in relation to the profit that is generated from sales. This return on investment indicates the value to one's business gained in return for the cost of ad campaigns. Web Analytics can help one determine their ROI for both big and small businesses and help create more effective marketing activities through website tools. Tools that are free, like Google Analytics, allow businesses the capability to learn about and analyze their website traffic and get a first hand look at how their own customers are interacting with their websites (Patina Marketing, 2012). This will allow these owners to be able to focus more specifically on their primary goals, versus the "ancillary goals" that may tend to clutter the website or messages (Patina Marketing, 2012). The web is constantly evolving, along with the tools that are available for businesses that allows them to track changes to their website that could potentially have positive or negative effects on the ROI of all of their marketing campaigns and changes that are made to the site. Through Google's free version of Web Analytics, smaller businesses can start tracking the return on their marketing efforts to delve deeper into the trends and behaviours of their website demographics. Web analytics are able to answer: who is visiting the site; what they are doing while on the site; and why they leave or stay (Patina Marketing, 2012).
Cajam Marketing is a full-service consulting firm that specializes in maximizing offline and online marketing initiatives through analytics. They put out a case study to explain how their use of Yahoo! Web Analytics helped to improve campaign ROI for some of their clients, both large and small. The analytics system helped the firm increase sales and visitor satisfaction, reduce marketing costs, and secure new insights on its website customers. Yahoo's web tools allow marketers to instantly segment near-real-time and historical data, and visualizes the data with advanced graphs to help marketers and website designers to uncover new insights. According to Kathy Gould, the CEO of Cajam, in relation to these web analytics tools: “After analyzing and optimizing our campaigns for a couple of months, we were able to lower our cost per-order by 38%,” she says. “We were also able to increase our number of orders by over 30% while spending less money” (Yahoo, 2012). Keyword analysis helped them to take multiple actions to improve performance, like identifying and stopping unprofitable keywords, changing keyword bidding strategies based on their profitability and adding additional keywords based on queries that customers were converting on. “Instead of only knowing which keywords converted to sales,” says Gould, “we now know what items our customers are buying for each keyword. This gives us insight into the profitability of each keyword, instead of just the number of orders” (Yahoo, 2012). All in all, web analytics software, such as Yahoo's or Google's provides the overall picture on website visitors, from the number of visitors, their demographics, and the exact path that they take while on the site.
Every website should provide a tangible ROI. And through Web Analytics, marketers will now know exactly where their visitors are coming from, what keywords they are clicking on, and the specific search engine that they are using. For instance, if Google Chrome is more popular for a specific search term, then the marketer knows that he needs to concentrate his advertising budget on this particular search engine to increase traffic and increase sales. Marketers will be better prepared to write targeted ads and analyze web traffic in a way that will increase ROI and identify measurable objectives, while also calculating relevant marketing indicators.
Patina Marketing. (2012). ROI And Web Analytics. Retrieved June 03, 2012, from http://www.patinamarketing.com/google-analytics/web-analytics/.
Yahoo. (16 March 2012) Analyze This! Retrieved June 03, 2012, from http://l.yimg.com/cv/ip/ayc/casestudies/cajammarketing_ywa_casestudy.pdf.
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