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You have a web analytics tool. You’re generating cubes of data, reams of reports. There are so many things you could change on your site, so many tests you could run that you’re paralyzed by indecision, a deer in the headlights. More likely, it’s your boss who’s paralyzed. How do you set priorities, evaluate opportunities, and convince your boss? Monetization.
Monetization allows you to compare the value of dissimilar behaviors and prioritize your actions. Where are changes likely to earn the greatest return? What’s the opportunity? How do you measure improvement?
Monetization is an imposing name for a simple concept—attaching a dollar value to desirable behaviors on your site, whether those behaviors generate revenue or reduce expenses. The obvious example is the average sale amount for ecommerce sites. It gets a little less obvious from there. For example, assigning an average value for a referral to another site or attributing your web site’s contribution to offline sales. The idea, however, is to assign a value not only for conversion events but to those behaviors that lead to a conversion.
Once you’ve assigned a dollar value to behaviors as dissimilar as a visit to a product detail page or a customer service page, you can estimate whether an incremental improvement to the product detail page will likely earn you more money than the saving likely from an improvement to a customer service page. Of course, that begs the question of how to assess the average value of a visit to a product detail or customer service page. That’s where Burby and Atchison come in.
Jason Burby and Shane Atchison have written a wonderfully practical book called Actionable Web Analytics.Burby and Atchison work at Zaaz, Inc., a web design and analytics consulting firm that focuses on monetization as a key strategy. They use monetization to help their clients:
Speak to the dog, in the language of the dog, about what matters to the heart of a dog.
As well, monetization gives you the vocabulary to talk to management in the language they understand best. Borrowing a graphic phrase from the Eisenberg brother’s book Persuasive Online Copywriting, “Speak to the dog, in the language of the dog, about what matters to the heart of a dog.” To this dog, money matters. Providing an estimated dollar value for proposed changes is highly effective in a conversation about what to change and when.
Actionable Web Analytics includes detailed instructions on how to build a monetization model for your site. It’s a fascinating subject with tremendous potential that Burby and Atchison address capably.
Actionable Web Analytics Using Data to Make Smart Business Decisions Jason Burby & Shane Atchison Wiley Publishing, Inc. ISBN: 978-0-470-12474-1
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Cheers for sharing this in-depth article. Very much appreciated.
Good reminder that can be forgotten. Community activities, i.e. forums, are becomming more popular and a way to drive effeciencies. Any thougths on how to monetize such activities?
Monetizing forums or any user-generated content depends upon your conversion goals. How do you make money? Through search ads, subscriptions, lead generation for services? Once you've established a conversion goal, then you can begin estimating how much each forum post contributes to the average value of your conversion. It really is a game of numbers. Monetizing each forum post helps you better understand whether increasing the number of posts should be prioritized over some other development project.
Agreed, having actionable analytics and clear, measurable goals for a site is key to monetization. I’d also emphasize the importance of analyzing visitor behavior after they arrive at a website (not just analyzing traffic sources and SEO, as with most analytics tools). In my experience, it's visitor behavior within a website (and the resulting number of successful conversions) which most strongly drives the measurable success of the site - in particular incremental revenue.