Speaking Sensis

Sometimes the numbers just talk for themselves. Take Yellow Pages® Mobile usage data…

As you all become devoted (hopefully) readers of the Crunch! column, you’ll begin to notice that my articles all take on roughly the same formula.

Obviously, there’ll be stats… a no-brainer considering this column is meant to be about stats.

But those stats will be surrounded by witty (hopefully) witticisms and insightful (hopefully) insights as well.

There’s a simple reason for that. To the vast majority of the world (i.e. the majority of people who aren’t bone fide pen-holder-carrying geeks), staring at a bunch of numbers is like watching grass grow.

But, every now and then, you come across a set of stats that just talk for themselves – no frilly additions necessary.

Here’s an example.

1.    In October, the Yellow Pages® Mobile audience hit half a million unique visitors for the first time¹.

2.    All up, it’s taken Yellow Pages® Mobile a touch over 18 months to reach half a million unique visitors¹. By comparison, it took Yellow Pages® Online more than five years to reach that mark².

Still think mobile marketing’s sitting on the runway?

Think again.

1.  Omniture. July to October 2009
2.  RedSheriff 2004/2005 data

So you think office workers sit at their computers writing Word docs all day? Forget that. According to the latest Sensis® eBusiness Report, we’re all going shopping!

There’s something distinctly Escher-like about the Sensis® eBusiness Report.

Okay, so comparing the mind-bending explorations of the impossible created by Dutch artist Maurits Cornelius Escher with an Internet survey might sound a stretch (although the cover of the Sensis® eBusiness Report does have a freaky picture on it).

But, there is method in my madness.

The thing is, the longer you look at the Sensis® eBusiness Report, the more interesting little tidbits pop out at you.

Just like Escher, eh?

Every year around August, the Sensis® eBusiness Report comes out and gets its fair share of headlines – usually focussing on one or two key observations.

This year was no different. The main focus of reporting was on the uptake of mobile data services by Australian consumers.

But some other really interesting findings hit me as I stared at the report recently. They relate to the way eBusiness has evolved in Australia.

The rise and rise of eBusiness
First up, it’s clear that eBusiness has had a real growth spurt over the last two years.

There’s four distinct activities related to eBusiness measured by the Sensis® eBusiness Report: two (research and buy) sit on the ‘buy side’, while two (sell and promote) sit on the ‘sell side’.

And, as the table below shows, all of these activities have really packed on the muscle over the last two years: albeit at different rates. In fact, researching potential purchases has reached the point of near-ubiquity in Australia, with the buying and selling activities not far behind them.

Businesses placing almost a third of their orders online
The second observation is that the SMEs who have cottoned onto online ordering are using the web for an average almost a third (31%) of their orders.

Ponder that for a moment. 78% of Australia’s SMEs are placing, on average, almost a third of their orders online.

That’s staggering and it underpins just how far eBusiness has come in this country.

Having said that, it does look like online’s share of orders may have hit a bit of a ceiling. While the number of SMEs placing orders online has grown rapidly since 2007, the average percentage of orders they’re placing (31%) has remained static.

Around the world? Nup… around the corner
One final observation. Back when the web was a toddler, the talk was of globalisation. If I recall, the thinking went something like ‘anyone could sell anywhere so everyone will sell everywhere’.

And while the web certainly has given birth to a new generation of multinationals, it pans out (perhaps not surprisingly) that the overwhelming bulk of businesses remain focussed on their neighbourhoods.

In fact, it turns out that two thirds of SMEs mainly sell to local customers – in the same city or town. 11% mainly sell elsewhere in the state, 12% interstate and 4% overseas.

So there you have it. A growth spurt in the uptake of eBusiness; a high (although static) share of purchases being placed online and a real focus on the customers just around the corner.

The Internet may not have changed the face of business in the way we once believed, but it sure has changed the way we do business.

Anyway, enough said. I’m off shopping (click, click, click).

Crunch! is a new column looking at the numbers behind advertising and local search. In today’s Crunch!… Defining what a click is. That’s easy. Defining what a click isn’t. That’s harder… but much more important.

In the 12 years I’ve been working in online media, there’s one thing that’s always befuddled me.

It’s the fact that online marketers cite measurement as the biggest barrier to advertising on what is touted as the world’s most measurable medium.

Go figure!

To highlight this, a 2007 McKinsey Quarterly report* found that over 50% of Internet advertisers saw “insufficient metrics to measure impact” as a barrier to using or considering digital advertising.

And there’ve been similar surveys, with similar results, in Australia.

So, what’s going on here? How the hell can measuring such a measurable medium raise so much angst?

I’ve long thought there’s two reasons.

The first is confusion about how we’re measuring – in other words the different public measurement services and their methodologies. For quite a while now, there’s been concern in Australia about the accuracy of online statistics. Naturally, when there’s a lack of faith in the source, there’s going to be a lack of faith in the data as well.

The second is a lack of clarity around what we’re measuring. Just think about the simple issue of online traffic as an example. Over the years, we’ve been stumped by a blinding array of different metrics – hits, page views, sessions, visits, unique users and unique visitors just to start with.

These metrics all mean slightly different things but, despite that, they’re often quoted interchangeably: a recipe for much pulling-of-hair and gnashing-of-teeth if I ever saw one.

This metric malaise is a really big problem, and I wanted to touch on it today with a focus on one particular metric – the humble click.

WHAT’S A CLICK?

The other day, an interesting question was raised at a customer panel session I attended.

On the surface, the question – “what (in advertising terms) is a click?” – would seem pretty straightforward.

Put simply, it’s when a person clicks from a feeder – like a search engine or banner ad – to a particular advertiser’s web site. It’s the action that gives rise to pricing terms like ‘cost per click’ and ‘pay per click’.

Okay, no biggie there.

CLICKS AIN’T LEADS

But the question becomes a lot murkier when you think about what a click isn’t. In particular, whether a click and a lead are the same thing.

Now, this might seem like nit-picking, but it’s a really important question – especially for the numerically-obsessed, like me. It gets to the heart of how you understand, measure and evaluate the contribution of different media to your business.

To start with, let’s think about this in a traditional media context.

Let’s say you send out a DM piece to 1,000 potential customers. As a result, 100 people take a moment to read it and 10 are so enamoured with what you’ve said that they give you a call.

What have you got there? 1,000 leads? 100 leads? 10 leads?

If you’re a media outlet trying to justify your existence, you might say 100. You might even say 1,000 if you’re feeling particularly hairy-chested (and/or deluded).

But if you’re a manager trying to get a handle on your sales pipeline, the answer is unequivocal… 10.

A lead isn’t a passing ship; it’s a real potential customer who has called, emailed, visited or contacted you in some way expressing a real interest.

A lead is a real sales opportunity that – most critically – you have a real chance to close.

Don’t get me wrong. The fact that 100 people read your DM piece (or clicked through to your web site) is great. They now know you and have you in the back of their minds. They’ve interacted with your brand.

But those people don’t qualify as ‘leads’ until they take that next step and get in touch with you.

BRINGING CONVERSION INTO THE MIX

Clearly, you can’t properly equate clicks to leads (which take the form of calls, visits, emails and other forms of enquiry) in the way some try to do these days.

To properly measure the leads generated by online advertising, you need to bring another ratio into play – conversion.

Conversion measures how many people actually took that next step of contacting you.

Most research suggests that online conversion rates are quite low – in the low single digits. That means the actual leads stemming from your online advertising may only be a relatively small fraction of the number of clicks.

THE BOTTOM LINE

So, what’s the bottom line here?

Firstly, comparing clicks with leads ain’t comparing apples with apples. If you want to compare clicks generated by one form of advertising with calls or visits generated by another, you need to think about the conversion as well. How many people actually visited your site and then contacted you?

Secondly, think about how well your web site converts browsers to buyers. Optimising online lead-generation campaigns means not just getting lots of people to your site, but having a site that efficiently converts them to leads as well.

And finally, if someone comes to you offering a mountain of ‘leads’, ask them precisely what they mean by the word ‘leads’.

How many of them will be real leads – enquiries from potential customers that you have a chance to close?

You might just find they’re leading you up the garden path.

* How companies are marketing online: A McKinsey Global Survey. September 2007