All online businesses need to track metrics, and pay attention to the numbers that equal successful revenue generation
At the recent SIPA 2011 event in Washington, DC, I had the opportunity to sit in on David Meerman Scott’s keynote entitled “Real-Time Marketing and PR – Why Journalists and Marketers Should Care.”
This session focused on the concept of real-time marketing, which is essentially the process of responding to relevant industry news as it breaks. The idea relies on using blogs and social media sites like Twitter, Facebook, and LinkedIn to provide a publishing platform to participate in real-time marketing.
When you see something happen that’ll be dramatic in the news, you have the opportunity as a content creator, editor, or CEO to embrace it by acting on its relevancy in real-time.
In the 21st century, everybody has access to a publishing platform. An online “printing press” costs almost nothing if you use an open source blog like WordPress. This may be good for the world, but bad for traditional publishers if they choose to sit back and relinquish their remaining advantage. But legacy publishers have vast amounts of content. Instead of being focused on how anyone can publish anything, they should be happy about co-op opportunities.
The bottom line is that Scott’s presentation was entertaining and thought provoking – a presentation I was completely in agreement with until he recommended against putting free reports behind firewalls. Instead, he said, treat it as a completely free PDF, with no email required for the download.
For Mequoda Systems following our standards, this practice doesn’t seem fitting. As a recap, here are the four Mequoda Online Content Standards, and the reason why Scott’s strategy does not fit soundly within them:
The four Mequoda Online Content Standards
#1: Content-Driven – The number of a website’s indexed pages, which can be found through Yahoo Site Explorer, provides a metric used to judge the size of any site. When it comes to competition, you will likely need to have more indexed pages to stay on top. The average number of indexed pages for Mequoda Systems is between 5,000 and 50,000. The trust ranking and amount of inbound links are likely impacted by how many pages are indexed on your website.
Much of the content offered by Mequoda Systems is free with no registration required. However, we also have hundreds of rapid conversion landing pages (RCLP) throughout the 40 benchmark systems that have page one rankings offering free downloads with registration. These RCLPs are very robust pages, which may offer 40-60% of the information from the free report itself.
#2: Google-Friendly – The Google Visibility Index gives you a market share number of how many known phrases you’re competing on and what percentage of those have rankings. For Mequoda Systems, Google Visibility is typically 5-20%.
Companies that use name squeeze pages with no valuable content to the user are not paying attention to the Google-friendly aspect. We put tremendous value on our RCLPs and hold the report behind a firewall because it’s optimized for another metric – conversions. Yes, we want traffic and page-one rankings, but we also like the 3-5% visitor to email subscriber conversion rate we receive from having free downloadable products behind a firewall, which requires registration to download.
#3: Subscriber-centric – This metric determines what percentage of casual visitors convert into followers, subscribers and fans for future correspondence through email and social media.
Again, we are used to a 3-5% conversion rate for Mequoda Systems, thanks to our aggressive website architecture. Experiencing 60% of revenue generation from email is not uncommon, and some companies experience as much as 80% of revenue from email, so acquiring email addresses remains a top business priority.
#4: Multiplatform – While implementing a revenue strategy based on giving away free content, it’s important to sell aligned premium information products such as books, magazines or event tickets. Multiplatform publishing is about having many ways to monetize while running a freemium model. To circumvent selling your own products, a relationship can be set up where you are selling someone else’s products and being paid for doing so.
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The possible effects of not requiring registration
Scott’s strategy wouldn’t fit well within the Mequoda Online Content Standards because it would likely have a negative impact on visitor to email conversion rate.
Unfortunately, it’s difficult to challenge Scott’s premise. If you take the gating down, I don’t think even Scott would argue that the conversion rate would go down with it.
But what exactly would the conversion rate change to if downloads didn’t require registration? I suspect it would drop by a factor of 10. For instance, if you normally experience a 4% conversion rate, I’d expect it to drop to 0.4%. This hypothesis is based on observations of sites lacking the conversion architecture Mequoda Systems rely on.
I believe the argument Scott was making for offering non-gated downloads, is to bring in more traffic and hence, drive more awareness. Considering a gated strategy vs. an open strategy, open would certainly bring in more traffic, but I don’t think the change in traffic could make up the difference in losing on the conversion rate.
As with any new idea or venture, it is necessary to first fully understand your entire business model. If there’s one thing I walked away from SIPA thinking, it’s that so many business models and strategic initiatives within same company are in conflict with one another. Often times there is a lack of modeling and in many cases, no metrics are analyzed. These companies do not know their Google Visibility Index (GVI), they don’t have a keyword universe, and they do not know visitor to email conversion rate.
So how can managers take a very provocative, interesting strategy, like the one Scott suggested, and know if it’s right for their company if they don’t know their business model?
I can conclude, from our data and by knowing our business model, that going to an open strategy won’t increase visibility and traffic enough to compensate for a precipitous drop in conversion rate.
Those who subscribe will still be our best customers because they want more information. They are not just interested in a single free report, they are open to starting a relationship.
Frankly, I was 95% in support of what Scott had to say during his keynote presentation and I would love to have his feedback on this article.
One thing that I’m pondering…
Is there a way for me to test Scott’s suggestion? I am interested in genuine comparative metrics. I personally do not think it’s possible to punch up the traffic to offset the change in conversion rate and I can’t imagine a test to implement or where to do it.
The only thing coming to mind would involve isolating an RCLP currently ranking on page two in Google. It would have to be an instance where we haven’t been able to get on page one – and we’d sacrifice the performance of the free report for the sake of this test. In the process we’d redo the RCLP so there would not be a gate on the download. Right below it, we’d add a link giving the opportunity to sign up for Mequoda Daily if the visitor so chose.
Here is how I would expect to see the numbers model out if we gave the report away without requiring registration:
Control: 900 monthly page views X 20% conversion to email = 180 new email subscribers
RTM Test: 2700 monthly page view X 2% conversion to email = 54 new email subscribers
This assumes moving from page two in Google Search to page one, which increases GVI for the RCLP from 32% to 100%. Assuming Click thru Rate (CTR) stays constant, Google Search referrals to the RCLP would triple from 900 to 2700 per month. If this is the case, it’s not nearly enough to make up for a drop in RCLP conversion rate of 90% (20% down to 2%).
Thus the odds of success here don’t strike me as very high.
I’m not saying Scott is wrong and I am right. The main point I’m trying to make is that there is math involved. We are always talking about improving system performance, so to genuinely decipher if we are making a smart decision, the metrics must be analyzed and compared in all possible instances.