Dr Dave Chaffey takes another look at Google Analytics this month, following on from his recent blogs on the subject. This time round, Dave shares his 'VQVC' approach to analytics - 'volume, quality, value, cost' - and how it can help businesses set digital marketing KPIs.
Many companies use Google Analytics to review the effectiveness of their digital marketing. The reasons are clear, it’s easy for a webmaster to add the tracking tags to every page of site’s page templates and simple for a new user to select reports to review trends through time.
But although you can use Google Analytics with its default setup (and many do), to get the most from it you have to customise it to a specific business. For business owners and marketers to get the most from it they have to ask the right questions to help them to review and improve their commercial performance from their online marketing and to know which KPIs and reports to set up or customise to answer the questions. The first type of customisation relates to defining KPIs to report the specific business outcomes of your website such as leads and sales. I’ll cover that within this article. In my next articles I will cover how to create custom reports and dashboards.
In the Smart Insights guide on Improving Results using Google Analytics we define the right types of questions and show where to look for the answers using VQVC. VQVC is a mnemonic I have developed so you can review the right types of KPIs, to drive improvements in web marketing. VQVC defines four types of measures that you should review within your analytics:
Google Analytics is great at showing these simple measures of what we often call “traffic”. You will see these in the standard audience overview report. Key Measures include:
For example I recently noticed our overall week-on-week visits were down a little more than I expected, so I immediately checked that the Search traffic Advanced Segment wasn’t also down which may have indicated a problem with our SEO. It wasn’t, so I knew the change in visitor figures were more related to the content engagement and sharing for that week.
For meaningful use of analytics to improve digital marketing it’s essential to go beyond volume measures to understand the quality of traffic on the site. The reason? It’s really challenging to deliver relevance to web users - they’re impatient if the content, design and experience doesn’t match their intent as they search for a product or service, or their expectations based on visits to other sites. These traffic quality measures give an indication of how a visitor has engaged with a site, these examples of site engagement benchmarks show typical range for these metrics.
While these don’t vary much from one week to the next unless there is a big change to the content or design of a site, they become really important to review for different site visitor segments. For example, if you’re paying for Google AdWords and your bounce rate for this traffic source is 90%, then you’re not getting great value from your ad investment. If you’re involved in managing search day-to-day you will know this, but if you review search marketing with an agency or team, you do need to get into how traffic quality varies for different types of search marketing. But yet still more important are…
Value shows the communications effectiveness and commercial contribution of our digital marketing to a business. Here we’re looking for outcomes which show intent to purchase or purchase itself. For an Ecommerce site this is straightforward, we can look at measures like sales transactions and average order value. However, it’s less obvious for the many non-transactional sites, like many B2B sites. Here it’s necessary to setup goals customised for the business in Google Analytics for when user actions are completed for qualified leads. Taking the example of a brochure or whitepaper download, you specify the thank you page address, give the goal a name and your goal is set up. Many will do this, but often not set a value against it based on the conversion of brochure download to sale and their average order value. Since it’s so crucial to have Goals customised for a business I have inserted an example. Most agencies will get this right as part of their onboarding for new clients, but many businesses still don’t have this right I find.
Once you have Ecommerce or Goal tracking setup you can then use these Value measures. It’s vital to review these if you’re serious about improving marketing effectiveness by seeing which online campaigns and site pages are working best for you in terms of value rather than visits and those that aren’t.
Cost measures are historically limited in Google Analytics, although you can now import Google AdWords costs and using Google’s new Universal Analytics you can import information about product costs.
I hope you find this VQVC review useful to explain some KPI options more clearly. In my next article on analytics I will look at approaches to setting up custom reports and dashboards - that’s if some breaking news doesn’t intervene.