Friday, October 30, 2009

Segmenting Compound Metrics

I recently posted an article about segmenting metrics, including compound metrics. In this post we will see how looking at the components of compound metrics can lead to greater business insights.

A typical compound metric is Page Consumption (page views divided by visits). This is a proxy for user interest. Another compound metrics is Repeat Use (visits divided by unique users). This is a proxy of interest over time. There are many compound metrics, some common and some exotic. They are expressed as rates, percents, ratios, rankings, indicators, yields, averages and all sorts of things in hopes of inferring user behavior. Web Analysts delight in creating calculated measures.

For our example we will use Page Consumption. The approach can be applied to any compound metric, however. We will look at the action items that may follow from looking at the calculated PV/Visit and then the Pages and Visits separately.

Typically, if you request a Page Consumption report from your Analyst, you will get some numbers and a chart that may look like the one below. This example compares the PV/Visit for six subject areas on a media site that makes its money from the volume of page views.

A PV/Visit Report

“Home Repair” and “Decorating – Men” are your clear content winners. They drive a lot of pages for a visit relative to Music and Gardening. One action might be to buy some more keywords for the lagging areas or put more links to them from other areas of the site. You can spend fewer resources on “Home Repair” and “Decorating – Men”. Those topics are doing great.

However, there is more you need to know before you act. Also request the information above broken out by its components. The second chart presents the same data with the metric components side by side. It provides a more complete picture and suggests a very different set of to-dos.

A segmented PV/Visit Report

For example, it’s apparent the men’s decorating section has low volume but a really high level of consumption (the first chart shows it has almost the same consumption as “Home Repair”). Try to drive more visits there. A few more visits will go a long way. “Decorating – Men” is not doing ok after all.

The music section has a relatively low volume of consumption but the highest visit level. There could be many reasons for this. Is there a usability problem? Does the content suck? Is the site built in such a way that one can spend hours listening to content but all on one page? Whatever the reason, if you just drive more traffic to Music, your reward in increased page views will be limited.

Home Repair looks great in the first graph, but the second graph shows an issue with the drivers. It has the second lowest visit level. You might consider spending resources to drive more visits here. New visits are likely drive your volume at a higher rate than the other site sections.

As you can see, the second graph can lead to very different action items; actions not so easily understood from the top graph alone. This is a really simple example to illustrate the power of segmentation. In the real world, even this segmentation would not be the end of the investigative road. For example, one might look to see if a larger audience of men in need of decorating even exits.

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