Monetize This
By Lindsay Hasz | 1 Comments | Posted in in Analytics , Optimization | Permalink
Building a monetization model is like traveling to a foreign country. It starts out confusing, not knowing where to begin or even how to speak the language, but after some time, you broaden your horizon and learn a few things. You start to wonder, ‘’Why isn’t everyone doing this?’’
Monetization is the method in which you convert a site’s activity into a monetized amount. This can range from a button clicked to an application completed. This is essential to one’s business because it helps you put a dollar value on each visitor’s movement. By combing analytics, one can determine not only which area gets the most activity, but what’s the most valuable (and those are often not the same!) For example, you may know that the billboard on the homepage gets the most clicks, but you may not know that by promoting one call-to-action over another in that space could double your monetized value. Building a monetization model is a key example of how ZAAZ “meets at the intersection of creative and logic.”
There are numerous benefits to building a monetization model.
- Optimization analysis and reporting: quick valuation on optimization requests, discover which key buying activities are worth more for testing purposes, etc.
- Gather important key findings such as value per visit/ value per application
- Time series data: analyze seasonality, utilize predictability of the model
- Dynamic prioritization: determine which initiatives have highest ROI potential
- Match-back to offline sales regression (full circle sales cycle)
- Correlate data to survey analysis with regards to brand opinion, etc.
- Monetize loss avoidance within optimization field
When building a monetization model, you must start with a few major questions.
- Who are the stakeholders? Is it the product team or marketing team? They’ll probably want the model for completely different reasons…
- What are the identified monetized transactions? Is this readily accessible? For example, can we get contribution margin per product? Do we have the data to support separating visitors into different segments?
- How will we use the results? How granular will we need the data to be?
- What are the assumptions? Does everyone agree? How do we determine what’s a good benchmark for these areas of unknown?
- Difficulty agreeing on strategy of model (gaining buy-in on a model that does not reflect actual revenue, but still carries tremendous value)
- Too much data… How do you decide what actually goes into the model? How do you be sure you’re using deduped data so as not to double-count any activity/ revenue?
- Agreeing on the assumptions
Even with the challenges listed above, building a monetization model to represent your site is essential to the growth of one’s business. It is a direct way to measure how successful a marketing campaign was, how to predict next year’s seasonality, which call-to-action is best used on what page and so forth. ZAAZ has built these for multiple business models and believe it is completely worth whatever hurdles you may come across, just as is it to travel somewhere new.
Lindsay is an Online Test Designer in the Optimization department at ZAAZ.
1 Comments
I love this point: "gaining buy-in on a model that does not reflect actual revenue, but still carries tremendous value." It seems like, all too often, these exercises get hung up on making the model something that perfectly (or near-perfectly) measures revenue impact. Presumably, if you can get over this hurdle, then, over time, you can do a roll-up of the monetized measures and see if they *track* to actual revenue (although, even if they don't, that's not necessarily a reason to throw them out).
Posted by: Tim Wilson | September 04, 2009 at 06:52 AM