It is possible to use Outlook as a CRM tool, but most companies choose an application like Salesforce or Siebel. It’s possible to use PowerPoint to do graphics, but most companies choose Photoshop for their graphics needs. PowerPoint can create charts, but most companies find Excel is better suited for that. While it is possible to use Excel for accounting, most companies use an accounting-specific package like QuickBooks or SAP.

In other words, while it’s possible to use a tool for a purpose it wasn’t designed for, most people would prefer using the right tool in the right situation. So why is it that most companies use their Website analytics application to provide their advertising analytics data?

We believe marketers are not clear as to where one analytics application picks up and the other leaves off because both can provide insight on the same topics. However, it’s the types of answers they provide that clearly separates the two. So let’s take a closer look at several topics that both are able to provide some insight into and highlight the differences between Website analytics and advertising analytics:

Conversions

Website Analytics- Which of my landing pages, funnels or other navigational elements on my site, in combination with organic sources and advertising sources, are producing the most conversions?

Advertising Analytics- Which specific ads (paid search, comparison shopping engines, affiliates, banners, emails, blogs, social media, etc.) produced the most/least profit, revenue, conversions, ROI, ROAS, CPA?

Clicks

Website Analytics- Which elements of my site were clicked on and where did those visitors come from? How many pages per second is my site serving?

Advertising Analytics- Which sources of advertising are responsible for generating the most clicks on my site, what did the advertising cost me and what was the outcome of those visits?

Investing

Website Analytics- Which elements of my site should I invest more resources in to increase conversions, and which elements of my site should I stop investing in, as they do not produce conversions?

Advertising Analytics- Which ads should I invest more money in because they produce the most profitable conversions, and which ads should I divest from because they do not produce profitable conversions?

Design

Website Analytics- Which aspects of my site could be improved by adding or subtracting certain design elements using A/B testing?

Advertising Analytics- Using A/B testing or multi-variant testing, which ad copy produces the best results?

Paths

Website Analytics- Which path(s) through my site produced the most/least conversions? Which path(s) do most consumers take through my website?

Advertising Analytics- Which path of ads did a customer click on en route to a conversion? Which paths are the most/least profitable? Which combination of advertising is the most effective? How do I allocate revenue credit across multiple ads that were involved in a conversion?

Referrers

Website Analytics- Which referrers produce the highest bounce rates, page-views, visits and orders?

Advertising Analytics- Which referring sites that show my ads produced the most profit, revenue, ROI, etc.? Which referrers should I stop showing my ads with because they do not produce?

Lifetime Value

Website Analytics- How many unique visits and repeat visits did I get over a certain period of time?

Advertising Analytics- Of the customers that I’ve received from advertising, how many of them have made a repeat purchase and for how much? How much does a customer spend over a period of time? Given what I know about the LTV of my customers, how much additional credit should I give to a first-time buyer?

Products

Website Analytics- Which products on my site get clicked on the most/least?

Advertising Analytics- Which products on my site are selling the most as the result of online advertising? What product recommendations should I make to current customers based on previous customer purchases? Which ads are profitable, but do not sell the products they are intended to sell?

At the end of the day, each application’s goals are very different, but work to achieve a common goal. Granted, depending on the Website analytics application you have, you may get more from your application that crosses into advertising analytics, but this serves as a general guideline for comparing the two.

A Website tool’s purpose is to provide you the analytics you need to design your site in the most effective way to convert as many of the visitors you have in the best possible way. Your advertising analytics applications purpose is to provide the data you need to invest your advertising budget as profitably as possible by driving the most qualified visitors to your Website, where in turn, the data from your Website analytics application will ensure your Website is designed as effectively as possible to increase the rate at which you convert these visitors.

This entry was posted on Thursday, May 22nd, 2008 at 8:03 pm and is filed under All Blogs, PPC. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.