Editorial Articles

Ivan Imhoff, MD of House of Kaizen discusses the results of a recent research, revealing the habits of UK on-line marketers, the way they manage their sites and assess their campaigns.

As a web analyst it frustrates me that although ecommerce has been around since Amazon launched in July 1995, so many marketers are still confused when it comes to the art of maximising the earning potential of their websites. With an aim to illustrate this point, we have recently undertaken a survey which has revealed that UK businesses currently waste £2 billion a year as a result of not investing their marketing budgets in something as simple as website conversion rate and bounce rate optimization.

In 2010, online marketing spend exceeded £16 billion in the US, and £4 billion in the UK. However, as few as 13% of marketers used this budget to focus on improving conversion rates (with average conversion rates at around 1.5% to 3%) with the majority being spent on driving traffic to websites, with the help of PPC, banners and emails and the latest fad to go ‘all out social’. Their failure in ignoring these simple key metrics that illustrate the true effectiveness and ability of a website to convert is their downfall.

Another bone of contention is the lack of knowledge on bounce rate. Over a quarter of marketers are unaware of what this actually term means, however experts agree that the bounce rate, or the percentage of visitors that 'bounce' from, or leave a landing page immediately after engaging with an ad, is emerging as one of the keys metrics that measures the accuracy of a marketing campaign. With only 9% of marketers using this metric to measure the effectiveness of on-line marketing, this may be the most overlooked and under-utilised, yet critical component to successful online marketing.

Over 40% of marketers currently benchmark their campaign success to pure traffic volume and 65% look only at the final sales generated; both metrics that taken alone do not provide a complete or accurate vision of their marketing activities performance. The survey showed that the average bounce rate reported is 50%, which is almost like admitting to wasting 50% of a marketing budget; accommodating this should be unacceptable.

We have nick named bounce rate the ‘Media Wastage Index’. With bounce rate this high cross-industry, consumers are sending a clear message how they feel about the quality of their first impression of a marketer’s website experience. This further suggests that of the £330 million UK marketing professionals are dishing out, half of this is wasted by directing traffic to pages that won’t connect and engage with the visitors, but more so, permanently detach its visitors.

It is a clear indication that if half of the visitors from paid marketing campaigns are leaving at the door step, a business has ignored to develop a relevant first point of contact, and is struggling to communicate their value proposition. Long term, the potential harm to a brand that sends visitors to convoluted pages which encourage them to bounce away in seconds, is that they will not return or keep the brand in mind, and ultimately leave with an indelibly bad impression.

Some marketers it seems are guilty of being stuck in past trends and are still prioritising website aesthetics over relevancy; nearly 65% of marketers admitted that to increase sales revenue they would alter the creative design of their websites, with only 37% choosing the methodological and data led approach of website conversion rate optimization. However, massive changes in the industry mean that today’s marketers need to think and act as technologists, behaviourists and scientists which mean that ‘old school marketers’ are in danger of becoming business liabilities.

Our clients are those that understand fully how site optimization generates incremental revenue. Today, the top 10 sites in the UK are recording conversion rates as high as 14%, and personally I do not understand why businesses acceptconversion rates. Conversion rate is something a business should be constantly optimizing and reviewing as it’s often an untapped source of incremental revenue.

Ivan Imhoff
MD, House of Kaizen