Wolfgang-digital-E-Commerce_KPI_report_2014

rudolfr

Wolfgang-digital-E-Commerce_KPI_report_2014

THE DIGITAL MARKETING SCIENTISTSE-COMMERCE KPIBENCHMARKS2014


“I know that half of my advertisingbudget is wasted, I just...”Infamous 20th Century Advertising Problem


IntroductionData has irreversibly disrupted the marketing industry.Advertising without dependable performance KPIs is simplyno longer acceptable. The reason for this disruptionis simple, data is a digital marketers best friend. Not onlydoes it facilitate you in understaning how your campaignsare performing, it enables you to continuously improveyour campaign results.Data, however, needs context to give it meaning. Numberswithout relative benchmarks are meaningless. Is threeminutes “time on site” a good figure for a retailer? Is a 32%“bounce rate” for a travel website a problem? Good benchmarkKPI figures allow you to accurately evaluate your ownKPI performance.“If you judge a fish by it’s ability to climb a treeit will live it’s whole life thinking it’s an idiot.”Albert EinsteinHere at Wolfgang Digital we’ve always found it trickyto source reliable e-commerce KPI benchmark data, particularlyspecific industry level KPI benchmarks. In thisKPI benchmark report we have set out to not just providee-commerce average KPIs such as conversion rate, bouncerate and time on site but to go a step further and understandthe relationships between the various e-commerceKPIs.This report enables digital marketers to identify weakspots, appreciate and investigate over performing areas,and ultimately make better digital marketing decisions.Plus, we’ve gone ahead and answered the million euroquestion:HOW MANY CLICKS =1 MILLION euros


The dataWe analysed the56 million visits andapproximately €214million in revenue thatflowed through ourparticipating websitesbetween 1 August 2013and 30 July 2014. Thewebsites were in the retailand travel sectors.We averaged stats on aper-website basis, so thatwebsites with high levelsof traffic don’t skew thestats.We had more retailparticipants than travelparticipants so the overalle-commerce figures arenot the midpoint betweenTravel and Retail but theaverage figure across allstudy participants.Revenue is attributedon a last click basis.A selection of namedparticipants are listed atthe bottom of the study.


Contents1.2.3.4.5.6.7.8.9.What sources does website traffic come from?Which traffic sources generate the most revenue?What devices is the site visitor using?What are average onsite engagement metrics?CR & ATV – Let’s Talk Money!How engagement metrics influence conversion rate.The Million Euro Question, literally! How many clicks =1 million euro revenue in your industry.Insights on data. Comments on study from contributors & author.key Takeaways


What sources doeswebsite traffic1.come from?


Which trafficsources generate2.the most revenue?


Win on Google,Win OnlineTrafficSourceGoogleOrganicGoogleCPCDirectEmailBingOrganicYahooOrganicFacebookReferralOthers% – eComm 41.4 28.4 18.8 4.4 1.7 1.2 0.8 3.3% – Travel 39.3 24.3 26.3 1.0 2.3 1.1 0.6 5.1% – Retail 42.0 29.7 16.6 4.9 1.6 1.2 0.9 3.2After identifying benchmark KPIs for traffic sources wedecided to go one step further and identify revenue by trafficsource.When we chop up the data by percentage of revenue contributedwe see that Google is still way out in front. Googleorganic and CPC generate a combined 70% of revenue.Google organic and Direct Traffic marginally increase theirshare when compared to the traffic figure, while GoogleCPC has a minor fall in share. Organic traffic from Bing andYahoo leapfrog Facebook in terms of revenue generated.Note: We are using the web standard “last click attribution model”.9


What devices3.is the user on?


Mobile is great for trafficbut desperately poorfor transaction!Sessionsby Device26%17%57%16%Revenueby Device10%74%Unless you are still typingaway on a commodore 64you are probably familiarwith and bored by talk ofthe Rise & Rise of mobile.We used our data to understandhow people use mobileand tablets to browseand importantly, to buy.While mobile and tabletcombined account fornearly half of website traffic(43%), they only contributedto just over a quarterof revenue (26%). Tabletperformance saw the closestmatch between trafficand revenue: 17% of trafficand 16% of revenue. Butmobile’s performance wasnotable. Mobile accountedfor 26% of traffic, but only10% of revenue. This indicatesthat while mobile is afavoured device for browsingand researching, peopledo not like to whip out thecredit card and buy duringtheir precious “mobile moments”.While deep diving thedata we did find strongcorrelations between mobiletraffic (0.29) & mobilerevenue (0.41) and overallconversion rate. Mobilewas actually the only devicewith positive trafficand revenue correlationswith conversion rate. Thistells us the websites thatgot more mobile traffic andmore mobile revenue hada higher overall conversionrate.So we infer that whilemobile traffic might notconvert on that device, theuser is somebody with purchaseintent who is highlylikely to convert later onanother device.So the lesson to learnhere: Make sure you websiteis mobile-optimisedfolks, particularly for researchand browsing typecontent!11


Now we get down to the juicy stuff:onsite behavioural KPIs.We’ve split the behaviour KPIsinto engagement KPIs and then commercial KPIs.to see which engagement KPIsWe’ve then done a correlation calculationwill influence your commercial KPIs.12


What doesthe user dowhen they get4.to the website?


Understanding Your Engagement KPIsEngagement KPIs Page/Session Average Session Duration Bounce Rate %eComm 5.4 03:49 35Travel 3.6 04:35 39Retail 5.9 03:35 3414


Conversion Rate& AverageTransaction Value5.Let’s Talk Money


Those critical commercial KPIsThere’s nothing else that can drive aconference Q&A session into a frenzy likediscussions and revelations surroundingthe holy grail of digital marketing KPIs, TheConversion Rate.The conversion rate metric might well bethe main reason you are reading this study!So without further ado, here are theaverage conversion rates and averagetransaction values.DRUMROLL…16


How EngagementMetrics Correlatewith Conversion6.Rate.


Time is MoneyWe calculated thecorrelation between theengagement KPIs (includingATV) and conversionrate. This will informdigital marketers of whichengagement KPIs theyshould seek to shift toimprove conversion rate.Correlations range from 0to 1. 0 being no correlationat all, 1 being perfectcorrelation. A negativecorrelation indicates that asone variable increases theother decreases.Time on site (0.34)and pages viewed (0.35)both had good positivecorelations with conversionrate. This indicates thatif digital marketers canimprove these metricsthey can expect to benefitfrom a revenue boostinghigher conversion rate. Theold adage “time is money”particularly pertinentto the digital marketingcommunity.There is a strong negativecorrelation betweenaverage transaction valueand converion rate (-0.36).This tells us that highervalue purchases havelower conversion rates,most likely because theconsumer wants to visitthe website more timesbefore purchasing and/orthe propensity to pull thetrigger on the purchase is alittle lower when the priceis high. E.g. we’ll buy a packof socks online withoutmuch consideration butfor a TV we will requiremultiple trips to a websiteand will consider buyingfrom a higher number ofcompeting retailers.19


If you find yourconversion rate is markedlydifferent to the reportaverage and your ATV isalso markedly differencethis correlation shouldexplain why.In what is one of the mostinteresting findings of thestudy, bounce rate, whichwe converted to “unbouncerate” (1 minus the bouncerate) for consistency withpositive time on site &pages viewed metrics, has aminimal correlation whichis actually a small negativecorrelation (-0.12) withconversion rate.This means when it comesto conversion, bounce ratedon’t mean diddly.This is particulalryinteresting as we get askedabout bounce rate a lot.The sense of rejection froma preceived high bouncerate seems to strike strikestraight through the heartof many a digital marketer.We’ve always felt bouncerate is one of the web’smost overemphasised andmisunderstood metrics,this correlation figuredemonstrates that it is nota conversion rate influencerand doesn’t warrant asnearly as much attentionas time on site or pagesviewed.I would suggest thatbounce rate is more ameasure of the quality ofa traffic source than thequality of your website.20


The MillionEuro Question.7.Literally!


How Many Clicks = 1million euro.Want to make a millioneuro online every year, everymonth, every week? We’vereverse engineered the datato find exactly how manyclicks your website needs tohit that magic million euromark. Use the benchmarkKPIs as a your guide, drivethis much traffic to yourwebsite, and you’ll belaughing all the way to yourCaribbean island on yourprivate jet.Website SessionseCommerce 262,000Travel 93,000Retail 504,00022


Insights8.on data.


Comments on study fromcontributors & author.“We are delightedto get substantiated,qualitative insights one-commerce in Ireland.The study looks at+50m website visits,so for us as a businessin Ireland it gives usbrilliant benchmark datato inform our ongoingdigital marketingactivities. You simplycan never have toomuch data and insightsin terms of digitalmarketing!”Celine WeldonSales and Marketing Manager,The Guinness Storehouse.A key issue thatdigital marketers – andindeed marketers whocan’t ignore digital anylonger – must face isjustifying their websiteperformance to boardlevel.Senior businesspeople are rarely digitalnatives, but they doknow numbers insideout. This e-commerceKPI report shouldarm digital marketerswith the ammo tocommunicate theirperformance upwardsmore effectively.Alan ColemanCEO of Wolfgang Digitaland author of the study.“For Surfholidays.comas an online businessit is essential that weunderstand our metricsand what works well andwhy; details such as whatpages convert better,what have lower bouncerates or what geographicarea the customer is inare all vital. Studies likethese keep us right ontop of this and allow usmake more informedmarketing decisions.”Nicky KellyCMO of Surf Holidays“KPI data influencesand guides us in howwe review our digitalmarketing strategy. Thisbenchmark report givesus great info to helpus make better digitalmarketing decisions.”Roisin WoodsMarketing Manager ofMcElhinneys (EuropeanEcommerce Retailerof the Year Finalist)“The major change Iexpect to see in 2015is the rise and rise ofFacebook as a trafficsource. Facebook haverevolutionised theiradvertising platformand while they willnever compete withGoogle for conversionthey can provide similarlevels of traffic at avery competitive cost.Right now there is a lagbetween the advertisingcapabilities thatFacebook advertisingoffers and marketers’successful adoption of it.I predict display budgetswill migrate to Facebookadvertising en masseonce they get a handleon its potential.”Alan ColemanCEO of Wolfgang Digitaland author of the study.24


Key9.Takeaways


• Google Makes The World Wide Web Go Round. Onaverage, 70% of website traffic and 70% of WebsitesRevenue comes from Google!• Facebook is not being used as a direct responsemedium. Facebook is contributing on average 1.4%of traffic to e-commerce websites and less than 1%of revenue.• Despite accounting for 1/3rd of online advertisingbudgets, display does not register as a traffic source.• Mobile & Tablets now account for 44% of e-commercewebsites’ traffic.• People don’t transact on mobile but mobile usersare highly likely to revisit a website and a later dateon another device to purchase.• The Sacred Stat that is Conversion Rate. The averagee-commerce conversion rate is 1.4%. Retail is 1.35%Travel is 1.56%. When we segmented retail into “OnlyOnly” retailers and “Online and Offline” retailers wefound that the “Online Only” retailers had significantlyhigher conversion rates. Similarly, we segmentedtravel into “package offerings” and “single purchaseofferings” (flight/accommodation/tour) and found thepackage offering had a far higher ATV and far lowerconversion rate.• Don’t fret over bounce rate. Our correlation studyshows it is inconsequential to conversion rate.• Time is Money. Time on site and pages viewedboth have strong correlations with conversion rate.• The Million Euro Question. How Many Clicks doesa website need to make €1,000,000? Answer: 262,00026


Selection ofContributorsCeltic Wedding RingsHarvey NormanKilkenny ShopLifestyle SportsLittlewoodsMcElhinneysSurf HolidaysVoyaGuinness StorehouseFunked Up FixiesSunsearch TravelWe have a large bank of participantswho wish to remain anonymous.


Want to contribute to our next digital marketing KPI study?Contributors benefit from receiving deeper “closed” results.Email alan@wolfgangdigital.com to get involved.Wolfgang Digital offer a range of digital marketing servicesand are particularly adept at helping businesses boost theironline revenue. If you want to talk to us drop an email tobrendan@wolfgangdigital.comCreative by Cleber Numbers by David Words by Alan

Similar magazines