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True Digital Asset ROI by:

March 17th, 2011

The use of website analytics and reporting software isn’t new to most website owners. Tracking and analyzing the usage of your website by people and search engine ‘bots are obviously essential activities for validating your investment. Typical metrics tracked include number of visits by various user types, number of downloads or access to particular content, and navigation routes most commonly taken by visitors to, through, and out of your site.  These metrics, perhaps aggregated into meaningful reports (i.e. overall unique visits per month), tell you how your site is performing. But are these reports evaluated for the impact or opportunities they reveal with respect to your entire IT budget? In other words, do your web analytic reports support “Key Performance Indicators” (KPIs) for your entire IT Investment portfolio, not just the website maintenance budget?

If your answer to this is “no”, your overall organizational IT investment may not be properly balanced to deliver the maximum ROI from your website, resulting in a lot of money left on the table and accumulation of very real business risk.

Let’s say your analytics show a dramatic increase in conversions by users completing a particular website form and uploading the required attachments. This is good news: the marketing and SEO folks have done their job, and more users are signing up and paying for the services offered. Plus, the analytics indicate that users are spending a lot more time before and after the conversion on your site – i.e. the “bounce rates” are getting lower (or “dwell” times are getting higher) for the pages that support the conversions. Revenues are growing, feedback is good, a bit of positive press and “earned media” (i.e. positive social commentary) is generated. All is good.

What are the KPIs here? Typical website managers, translating system utilization metrics to immediate business value indicators, might categorize their metrics as supporting goals and KPIs like:

  1. Higher Conversions per User (i.e. our “stickiness” campaign is working, with value perceived in upsells, cross-sells, good recurring value in subscriptions);
  2. Lower Conversion Abandonment (i.e. we’re making it easier to close the sale, once the decision to buy is made); and
  3. Lower Cost per Conversion – this is an indicator that is based on specific, additional cost factors (beyond fixed expenses, like an ad network buy) incurred to drive particular kinds of traffic and conversions.

Typical response to these KPIs usually begins and ends with website investment. For example, if KPI (1) is trending low, there probably needs to be more compelling opportunities for cross-sells on the landing pages, or simply better “combined” value described for multiple products.  If KPI (2) is trending higher, your online form or payment gateway is either due for redesign, or there’s a serious bug in the application. Higher trending in KPI (3) may indicate saturation of demand in a demographic, or perhaps you’re not reaching the best, highest value demographic (because your ad-buy or PPC campaign isn’t optimized appropriately, nor is it supported by effective SEO of the target landing pages).

There’s lots to consider from the analytics, to be sure, that will likely change some workplans and investment in the Website Programming department, along with some of the Online Marketing staff.  What about the rest of the organization? A CIO’s budget covers a lot more than the public website, right?

According to The Hackett Group Inc., a strategic advisory firm, a CIO’s IT investment portfolio should have four types of investments supporting delivery of the Enterprise’s business:

  • IT Infrastructure
  • IT Utility
  • IT Improvement
  • IT Innovation

I’ll add that across these Investment Categories, the Resource Types requiring investment should include:

  • People (i.e. skills, training, efficiency, retention)
  • Processes (i.e. standard methods, efficient management, optimized governance)
  • Governance (i.e. policies, rules, procedures, standards, training, monitoring)
  • Information Technology (i.e. platforms, SLAs, hardware and software assets)
  • Digital Content (i.e. digital assets, subscriptions, multimedia content)
  • Digital Presence (i.e. online branding, profiles, relationships, contacts, inbound links)

Other areas of Enterprise IT Investment that may be impacted by the change in website usage as evidenced by the KPIs might include the following Resource Types within Investment Categories:

  • IT Infrastructure Services (i.e. increased storage demand, due to the increased volume of attachments, is outstripping network and storage infrastructure or SLAs)
  • IT Utility Services – it turns out that the Ad Network buy included a link to a landing page that performed badly under the sudden load; recurring website performance tests and a “flash traffic” contingency plan could’ve helped (redirecting overage traffic to a more static page with longer caching thresholds)
  • IT Improvement, Specifically Systems Engineering and Training – the form or payment processing gateway bug (the third this month) is clear evidence of improvements needed in the development and testing processes and tooling
  • IT Innovation – we’re not taking advantage of the increased traffic – while our users are generating additional conversions, the number of new, unique users isn’t trending upwards as fast. This may be helped by additional staff training and policies regarding use of the relevant social media channels our users are coming from, to provide information and tools (nifty bits of information or links to a useful comparison app) to these users to help them “spread the word”.

In reality, the Enterprise-wide IT investment impact the original KPIs point to extends far beyond simply improving and repairing  the website and its content. If the IT infrastructure, support services, support staffing and methods and “interactive media” investment impacts aren’t also addressed, those KPIs will either turn negative in a hurry, or may continue to improve faster and longer than planned.

It’s important to understand that a typical CIO is focused on all IT investments, including those unrelated to Internet digital presence (i.e. the public website and distributed digital assets). As such, it’s possible  the alignment of web analytics to Enterprise IT investment is best managed by a “Chief Digital Officer” (CDO), within the CIO’s portfolio. The CDO would be responsible for aligning and monitoring website KPIs against Enterprise IT KPIs, and negotiating on behalf of the “online team” and their Digital Assets for changes in Enterprise IT budget allocations.  An intelligent “CDO” dashboard (as illustrated below) might visualize both the impact and opportunities of this “Digital Asset Enterprise ROI” alignment, leading to quicker, more fruitful negotiations.  As the Digital Asset “KPI Levers” change (i.e. the website and supportive analytics), these result in changes to the Enterprise IT KPIs.

At NavigationArts, we help configure and align web presence analytics not only with tactical website and digital asset improvement plans, but also with strategic Enterprise IT Investment Strategy and Portfolio. Contact our team today to learn more.

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One Comment on “True Digital Asset ROI”

  1. […] right.  It begins with setting the standards and measuring them. (Check out my colleague’s blog on tracking KPIs to influence your IT investment […]

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