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Re: [webanalytics] KPI's for Social Media Websites

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  • Jim Novo
    ... It s great that people are thinking about Engagement in terms of activity over a given period of time or even better, activity in some Recent time frame.
    Message 1 of 8 , May 1, 2007
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      > Depending on the makeup
      > of the site, you can assign various engagement levels to each of these
      > success events, in addition to time spent per visit, number of logins
      > made in a particular time period, etc.

      It's great that people are thinking about Engagement in terms of activity
      over a given period of time or even better, activity in some Recent time
      frame. I'd like to suggest people begin thinking about where this kind of
      metric leads longer term and the possibility of modifying it slightly before
      it becomes "embedded" in the culture and leads to some frustration on the
      Marketing side.

      Frequency and Cycle Time are really two very different concepts from a
      Database Marketing perspective. Mixed metrics like "number of events in a
      time period" are fine to start with. But when you start testing programs
      based on these mixed metrics you will eventually find mixing the Frequency
      component with the Recency or Time component in the same metric is
      problematic. You will lose detail you can use to make the information
      derived much more actionable for Marketing, Design, Content, and
      Merchandising.

      In other words, instead of getting consistent, repeatable test results,
      you'll get an unreliable mix of test results that are all over the place and
      don't seem to have any pattern, because the basis of the metric "X events
      over Y time" is a mixed bag itself. It doesn't really speak to the
      Marketing issues at hand.

      Think about it this way:

      Frequency - the Consumption or Current Value component : represents what the
      visitor / customer is worth to the company now. Measure: Sum Total of
      events, is a *weak* predictive variable for future activity.

      Recency - the Engagement or Potential Value component : represents what the
      visitor / customer is worth to the company in the Future. Measure: Time
      since Last Event, is a *strong* predictive variable for future activity.

      These are two very different ideas that make a lot of sense by themselves,
      but when they are forced into a single metric, lose a lot of the power they
      have separately. Of course, if you're not interested in predicting the
      behavior of a segment, then it doesn't really matter. But most Marketers
      are *very* interested in prediction, because you can drive much higher ROI
      if you can predict behavior.

      Using these 2 variables separately, you get 4 segments:

      Consumption..................Engagement

      High Current Value, High Potential Value : best visitors
      Low Current Value, High Potential Value : up-and-coming visitors
      High Current Value, Low Potential Value : former best visitors
      Low Current Value, Low Potential Value : dreck visitors

      and each of these segments requires a different marketing approach to
      optimize the value of the segment. Think about it - what are you going to
      get for response / results if you make the same offer or treat these 4 very
      different groups the same way? Right. An unreliable mixed bag.

      Further, you can use this same 4 segment model above to analyze any action
      segmentation - campaigns, search phrases, product categories, content
      groups, blog posters, uploaders - any action.

      If you're still with me and care about the marketing implications of
      Engagement analysis - as in, will the marketers be able to *do anything*
      with the analysis once you generate it - check out this series on my blog.
      If you are familiar with the concept of Recency, you can skip the Intro and
      start here:

      http://blog.jimnovo.com/2007/04/07/engagement-campaigns/

      If you're not clear on the predictive powers of Recency online and you want
      to see the "demo" from my eMetrics Summit 2004 presentation, start here:

      http://blog.jimnovo.com/2007/04/25/measuring-engagement/

      The idea of "X times over Y period" is a good start, but history has proven
      "X times, last time Y ago" is where you will eventually end up if what you
      are concerned with is maximizing response and profitability.

      Unless, of course, you are prepared to build your own regression or other
      advanced model, in which case, why are you looking at "X times over Y
      period" as a metric at all?

      See ya at the 'Summit...

      Jim Novo
      jim@...
      Web Site: http://www.jimnovo.com
      Blog: http://blog.jimnovo.com/
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