Increasing Web Traffic is not a Business Goal

Imagine you’re the director of a fantastic, imaginative and popular theme park, located 30 kilometres from a European capital.

How would you measure the success of the park?

  • by the number of visitors to the city
  • the number of tickets booked online
  • the number of people through the park’s gate
  • total revenue
  • revenue against costs

If you chose the fifth option then you can probably stop reading.  While all the others measure factors impacting the business it is the only measure of the success of the park.

Imagine the you ran a campaign to increase visitors and doubled the number of people coming through the gate; but they came on discounted tickets, didn’t spend as much once in the park, but drove up service costs. If your KPI was only on gate numbers you’ll think this was a success, but on a business basis you’ve destroyed value. And in the long term these may not be the loyal customers you’re looking for (as many Groupon suppliers found to their cost).

This is a rough analogy of measuring web traffic, it’s a contributing factor to business success, but not an outright measure of success. It’s also something you don’t entirely control. Sure you can do all the SEO and banner campaigns to drive traffic but external factors also play a part; the biggest traffic drivers to our corporate site in recent years have been events around the financial crisis.

So if you’re trying to develop a set of KPI’s start with the business goal, which should relate to either increasing revenue, building your brand (which should lead to increasing revenue) or reducing/optimising costs. Look at the contributing factors, understand their impact. If you’re looking at website traffic analyse the data in depth, try to find the behaviours that contribute to your business goals. Is it a sale? a subscription? sharing content? viewing a video? Measure that. Measure the number of people who do that as a proportion of total visitors. That’s your conversion rate, that’s the interesting number. To go back to the theme park analogy those are the people signing for the all-inclusive deal.

Traffic isn’t the only thing to think about. Some years ago a Google sales person was talking to me about increasing traffic to our corporate site. At the time my concern was that we had too much traffic – because the site uses the .com domain US clients often expected it to be their “local” site. So it’s worth using surveys to analyse who is visiting your site and what their goals are – in our case we address this specific issue using IP sniffing to guess the visitor’s location, and then served them a splash page directing them to the local site (since some US visitors do want the corporate site we couldn’t just redirect US traffic). So it’s not just volume, it’s whether you’re bringing the right people to the site.

Traffic to a site or within a site should be measured, and web managers must make adjustments  that make their site easier and faster to use. Increasing traffic will almost always be good for business – just don’t mistake it for a measure of business value.

Image traffic

What Should You Count?

One of the trickier subjects in discussing social media is measurement. Everyone agrees it must be done, no-one’s very sure of the best way to do it.

I think it’s accepted wisdom that “likes” or “followers” is not a useful measurement. It’s a very easy action for a visitor to make – it is just a click – so it doesn’t tell you very much about the visitor’s sentiment. It’s also risky in that focussing only on likes would lead to a company taking a short term approach to social media and building campaigns that generated likes but ultimately destroying value.

So companies look for other measures;

  • visitor engagement – comments, content shared, content submitted
  • business goal – ideally social media is connected to a business goal; eg; are the calls to call centres reduced by webcare? has the customer perception of the brand changed?

But I think in some cases measuring fans (to use an older term) is a measure of engagement.

I was listening to KLM’s Director of Corporate Communications and Media, Joyce Veekman, at a conference last week and she said that one of their goals is to reach 2 million Facebook likes this year. They reached 1 million in January of this year, and created a cute thank you video, at the time of the presentation the talley stood at 1349086.

KLM have tried stuff in social media for a while, but became very active when the ash cloud from Eyjafjallajökull closed airports and stranded visitors across Europe. That was the moment the KLM management “got it” and started supporting the use of social media. Since then they’ve developed a 24/7 approach to their webcare, built a following on facebook, experimented with pinterest and developed innovative campaigns – such as their “meet and seat” programme.

In KLM’s case I suspect the depth and richness of their social media is earning them “likes” and “follows”, and the steady growth in those figures is a reflection of engagement.

I need to add here that “likes” is not the only measurement KLM uses, and it’s not their only goal in their social media activities. They have other business goals related to customer service and brand perception with appropriate measure systems in place. “Likes” is just one measurement – and it’s an easy and visible measure of their progress.

Postscript; KLM’s total number of likes on Facebook now stands at 1360329, a growth of more than 11k in four days.

 

Social Media Metrics

I’ve had some difficult discussions about how to measure the value of our web presence, and some even more difficult discussions on how we should measure the value of social media.

I don’t think visitor traffic says that much, our peak traffic days in the last year have coincided with announcements related to the current financial crisis. We’ve had assistance from the Dutch Government, a new CEO, and most recently an announcement that we will be splitting the company. On those days our web traffic soared even if our shareprice didn’t so clearly traffic does not equal value to the company.

For me there are two ways a site can generate value for a company; reduce costs or increase revenue. Social media programmes need to show the same kind of benefits, and there are plenty of examples out there, the DellOutlet twitter is perhaps the clearest example – where followers can benefit from offers from the dell outlet store that otherwise wouldn’t get much publicity.

I’m not the only one lamenting the lack of sensible thought within companies on measurment and ROI for web/social media; Jay Baer points out that we might be “cherishing the wrong trophy” when we chase facebook fans and twitter followers. David Meerman Scott dislikes ROI (like any good marketer) but still pushed for thinking about “creating buzz” and business impact in a recent presentation.

But the hands-down best, winner-takes-all explanation of why and how ROI matters in social media comes from Olivier Blanchard in this presentation.

Two items that particularly pleased me;

  1. the acknowledgement that it will take time, as in months, to realise the financial impact of social media (slides 28 & 60)
  2. the reference to those easy-to-get web metrics as “non-financial impact” (slide 34)

Aside from that there’s a certain genius in the use of images in this presentation – it’s worth a look for that alone.