This morning I attended one of the best sessions of SES NY 06 and I have a lot to relate.

9:00 am - 10:15am Measuring Success Overview           
how do you know if you’ve been successful with search engines? You can check your "rank" at search engines for particular keywords, analyze log files to see the actual terms people used to reach your web site or make the ultimate jump and "close the loop" by measuring sales conversions and return-on-investment (ROI). This panel explores ways to measure success and what statistics you should really care about. Last part of session offers Q&A with measuring tool vendors.
Moderator:
Danny Sullivan, Editor, SearchEngineWatch.com
Speakers:
Bryan Eisenberg, Co-Founder and CPO (Chief Persuasion Officer), Future Now, Inc.
Laura Thieme, President and Founder, Bizresearch
Q&A Panelists:
Brett Crosby, Product Marketing Manager, Google Analytics, Google, Inc
Chris Knoch, Principal Consultant, Omniture, Inc.
John Marshall, CEO, ClickTracks.com
Jay McCarthy, VP of Product Management & Business Development, WebSideStory
Barry Parshall, Director of Product Management, WebTrends

Brian Eisenberg started off by saying Web Analytics is just a tool - no tool is good if you don’t know how to take action.  Just because you own a buzz saw doesn’t make you a carpenter.

Internet Marketing is growing quickly and what worked 5-10 years ago no longer works as well.  Conversion rate for direct marketing has been about 2.5% consistently while for online advertising it’s also 2.5% (yet online advertising has many advantages over direct marketing) and the online conversion rate should be questioned.  In fact, according to Brian, conversion rates for online advertising are going down as people demand more.       

As long as a business makes enough money conversion rates are often not challenged but as there’s more and more competition and people become more sophisticated online, conversion rates are going down and the cost of PPC ads are going up.  If you look at sites like Blue Nile, the cost of their keywords is going so high they can no longer afford to be complacent about their conversion rate.

People can still make money while making a lot of mistakes but it’s getting tougher to make a profit for all the reasons above.

So the 2.5% conversion rate should be challenged for Online Advertising; Direct Marketing is pushing data to you while Online Advertising is a pulling data and the conversion rate should be higher…..but why is not?

Because, in order to get higher conversions you have to persuade people to take action and in order to do that you must understand what they want.

There are more than one type of Conversion.  Look for "Scent";  80% of site traffic drops off by the third page.  People are telling you very clearly what they want and as soon as they see they are not getting it, they leave the site and never come back.

If you can’t  define what you are doing as a process you don’t know what your doing. If only 2% of your visitors convert what about the 98% that did not convert?  As PPC is getting more expensive you need to understand people better in order to give them what they want. 

 I’ll cover Part 2 in my next post.