People tend to say that in the web business traffic is the king. I always add, that if traffic is the king, so ROI is god.
People sometime looks at advertising as a way to drive millions of users to your web site. True, brand awareness is very important, but I will argue that in today competitive market, what you actually want is not just a lot of traffic but the right traffic.
I’ll give you an example from our life as a company. In the recent week we got great press coverage. From famous tech blogs such as Techcrunch and Read/Write web to the mainstream news sites like cnn, forbes and others. We got huge amount of traffic and more than 4000 beta requests in less than two days.
We use our own platform, NuConomy Studio, to track the different activities on our site. One of my favorites reports in the system is the one that shows you not just how much traffic you got from any referrer to your site, but which referrer contributes the most value to you.
In our case, we actually saw that the users that comes from Techcrunch were almost 5 times more value to us than the users that got to our site from the traditional media sites (which is fascinating fact when you consider that most people who register to our beta are in CXX or VP position in their companies).
Of course the big question is how do you define value?
In our case it was the combination of number of registration, request for information and actual acceptance into our beta program.
But every business has a very different kind of definition for value. If you are a blogging platform the most valuable users are probably the ones that wrote the posts that generated the highest number of views, comments, rating, shared and clicks on ads.
If you are an e-commerce site, value is probably the users that bought the most items, spend the most money, reviewed the most products, etc…
If you an advertiser, would you rather get (and pay) a million users click on your ad, or just two hundred thousands - but the right two hundred thousands?
If you are bidding for keywords on Google ads do you want to buy the ones that generated the most clicks or the ones that brought you the most valuable users?
I personally believe that the measurement of mare traffic is something that will slowly die. Advertisers will not be satisfied with the numbers of how much hits and uniques you have. They will want to know exactly what kind of audience are engaged in your site. They will want to know exactly what kind of ROI to expect when advertising in your site.
I agree. Quality is more important than quantity. The difficulty comes in defining what is ‘quality’ (or of value as you say).
To me, quality, high-value tasks, conversion, etc… all come from a fundamental understanding of what it is your business is trying to accomplish. Why do you have a website? What are your business goals? With any measurement strategy, these must be properly defined beforehand and the metrics you choose should be derived from these goals.
Dan Piche
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very interesting. excellent analagy as well.
A fundamental shift is taking place in the Internet space where only advertisers who form RELATIONSHIPS with consumers will succeed. So contextual advertising will have to become “more contextual” and more personal. Ads will have to become “useful”. Consider Dooplr.com – a website that allows users to share travel plans. Now ads from British Airways to a frequent traveller may be fine because they actually aid the user to travel. British Airways would then have to become a part of the inner circle. “A friend” so to speak. One may even sense a situation where users will choose the relationships it has – with brands and advertisers. So users may be able to choose advertisers from who it seeks to receive advertising. This essentially builds up long-term relationships.
So one may see a situation where one sees short-term advertisers throwing content at consumers for targeted promotions, and one will see long-term advertisers who look to build consumer “friends” and consumer communities. The sense is that only those who build relevant long-term relationships will succeed. Relationships need to be essentially non intrusive.
Harshil - you are right.
There are actually a lot of experiments around this concept of advertising in social networks. Facebook are plying with those ideas for quite some time.
The question of course is how to not just deliver your message, but also make sure that the users accept it and give it attention.
This is something I’ve been writing on for some time. Advertising should give more value to the consumers. The enigma where advertisers spend more money on ads while the users spend their money on “ads blockers” must stop.
The winner will be the advertiser that will find a way not to just promote his brand but give the users a value to their web experience at the same time.