Adaptive Multivariate Testing Breaks Adoption Barriers

As online advertising continues to take a larger share of overall advertising expenditures a broad array of technologies are being employed to increase website effectiveness.

CRO For The Rest of Us

Until recently, much of the focus has been on tools that are designed to increase the number of website visitors. Many companies have now realized that while increasing the number of visitors is important, converting these visitors into customers is the real benchmark of success.

You Must Optimize Your Conversion Rates

As more website publishers target increased conversion rates, the use of multivariate testing to determine which combination of website text and graphics is most effective has grown.

Increasing conversion rates is a non-trivial task. Any single web page might have dozens of variable elements that could be tweaked in many different ways. If one chooses to test all possible combinations the problem quickly gets out of hand.

What tool you should use?

Most multivariate testing solutions rely on a piece of statistical black magic known as fractional factorial testing. In layman’s terms, not all page combinations are tested. Instead, after testing an array (a subset of combinations) a statistical model predicts the most effective combination.

While clearly a good approach, there are a number of downsides. Available offerings are quite expensive, complex, and in some circles are viewed as less than completely reliable. Worse yet, since they test an array until statistical reliability is achieved for every combination in the array, they require a large number of web visitors to work. Some vendors point to a minimum of one hundred thousand visitors per month. These limitations have left most small to medium sized businesses on the sidelines when it comes to website optimization.

Adaptive Multivariate Testing

Not any more. HiConversion (www.hiconversion.com) has introduced an Adaptive Multivariate Testing solution that breaks website optimization adoption barriers. This patented technology adapts to visitor behavior and converges to the best page combination in real time.

As result, it is effective with an order of magnitude fewer website visitors than traditional solutions.The product is designed for non-technical users and it is priced for mass adoption.

With HiConversion, effective website optimization services are now available to all of us.

A recent survey done by the Backbone IT Group concludes that over 80 percent of business websites are ‘Throwing Away Sales’. Two interesting points from the same survey:

Web Traffic: The Cart Before The Horse

Just 11 percent of sampled businesses were using some form of Conversion Rate Optimization, compared to 75 percent employing Search Engine Optimization. Websites increasing visitor conversion rates by just a few percent typically double or even triple the number of sales or enquiries generated. The impact of Conversion Rate Optimization on bottom-line profitability can be remarkable.

Forrester estimates that Interactive Marketing Spend will increase from $18b in 2007 to $61b over the next 4 ½ years, and that search spend will triple in 5 years. Even in the context of all this spending conversion rates are typically low. MarketingSherpa reports average rates being less than 4% while Fireclick reports general conversion rates that are closer to 2%.

With billions of dollars being spent generating such poor results, why wouldn’t online marketing professionals invest more into conversion rate optimization? Is there a reason that traffic continues to devour the attention of eBusinesses?

What do you think?

Why you should care about testing methods?

Website optimization, i.e. optimization for high page conversion, is generating a lot of marketing buzz. The products in this category are often called multivariate testing solutions. In this write-up you will learn about a new innovative methodology introduced by www.hiconversion.com that is dramatically improving performance and expanding the reach of this important technology.

The primary advantage of multivariate testing is its ability to test a large number of page versions while varying multiple elements at the same time.

Prior to Hiconversion there were two common multivariate testing methods. They are defined as the full factorial method and the fractional factorial method. Now, there is a third approach – adaptive multivariate testing.

Novice users can easily be confused about how these methods work and the differences between them.

What follows is a high level overview of these three methods. Particular attention is paid to the number of web visitors required to arrive at statistically significant results. Prior to Hiconversion the need for high volume web traffic prohibited the great majority of websites from using this technology.

Full Factorial Method

The full factorial method is a fancy way to describe an approach that tests all possible combinations and then determines a winner.

Useful Info

Number of page combinations: If you decide to test two elements of your landing page by assigning three different variations to each one of them, you create a total of 16 possible page combinations:

Adding more elements to the test dramatically increases the number of combinations. For example, a test with five elements and three variations of each generates 1,024 combinations (4x4x4x4x4).

Statistical accuracy: Another aspect of the page testing challenge focuses on the statistical accuracy of measurements. Without dragging you through a boring tutorial on statistics you can assume the following guidelines:

• 25-50 conversions will give you an 80% confidence level in the accuracy of your results
• 100+ conversions will produce a 95% confidence level

For a landing page that has a 2% conversion rate, this implies that you have to test at least 5,000 visitors per each test combination to achieve a 95% level of confidence.

What follows is a visual representation of the number of visitors necessary for full factorial testing of two variable elements. Each variable element is represented by its own one dimensional axis. The third dimension illustrates the number of visitors necessary to achieve statistical reliability for each page combination tested. The total number of visitors needed to perform this test is represented by the cube below:

The full factorial method has its advantages and disadvantages:

Pros

• Free tools such as the Google Website Optimizer
• Reliable results – there is no question about which page combination is the best, you have tested them all

Cons

• Prohibitive page traffic requirement – Since every element must be considered and tested, a large amount of data (time) is necessary to achieve results.
• Limited scope – to make it practical given the amount of visitors and time required to test all combinations companies are forced to run very small tests with very few variable elements; this limits test potential and marketers’ freedom to explore new ideas

Fractional Factorial Method

The more sophisticated (and much more expensive approach) is called the fractional factorial method. Instead of testing all possible page combinations, only an array (i.e. subset) is tested and mathematical modeling is used to predict the overall combination winner. This method is very sensitive to the potential interaction between different elements. That is why several waves of testing are necessary before good results are achieved.

The picture below illustrates the reduced number of web visitors required by this methodology.

Pros

• Ability to test a large number of elements (combinations) – use of mathematical modeling in combination with effective test array design makes it possible to effectively evaluate a large number of page elements and element variations;
• Quick learning – After each wave of testing a marketing professional can learn about the importance of each element enabling a more iterative approach to testing.

Cons

• Sensitivity to element interaction – The ideal case for this methodology occurs when the impact of each page element is independent from other elements. In real life scenarios, one variation often works better in combination with another element variation. This affects the accuracy of mathematical modeling forcing multiple waves of testing.
• Requires a large number of visitors – Running each wave of tests until statistical confidence is achieved means that the number of required visitors escalates making this method unfeasible for mid to small websites (some multi variate testing vendors point to a requirement of 100,000+ visitors/mo).
• Requires expert knowledge – designing test arrays and analyzing test results requires specialized multivariate testing knowledge
• High price – the existing fractional factorial solutions tend to cost thousands of dollars per month.

Adaptive Method

Adaptive multivariate testing moves performance to a whole new level. The primary feature of this methodology is its ability to adapt to visitor behavior in real time while converging toward a winning page combination. Actual testing begins with a few random page combinations that are presented to live visitors. Visitor reactions are then processed in real time creating statistical data that is used by the adaptive algorithm to generate a new page combination that will be shown to successive live visitors. During this iterative process, the adaptive algorithm is able to effectively detect elements that impact page conversion in a positive way and to filter out elements that have a negative impact. As a result, the process starts converging toward a winning page or group of effective page combinations quickly.

The picture below illustrates the adaptive method and its ability to effectively converge to the best page combination with a dramatic reduction in number of required web visitors.

Useful Info

• The adaptive method’s effectiveness is achieved through continued learning and a self-correcting loop. Unlike the traditional fractional factorial method where mathematical modeling sits and waits until a full array of page combination are accurately tested (weeks of time and many thousands of visitors), the adaptive method continually learns and adjusts in real time.
• The foundation of this method is based on the well known gradient search technique. The gradient is a mathematical term that measures angle or ‘steepness’ of the line or curve at a certain point. Applied to the website optimization problem, continued gradient calculations help to determine in real time if a sequence of two or more page combinations creates ascent (converging toward a better performing combination), descent (moving toward lesser performing combinations) or staying flat (no improvement or decline).

Adaptive multivariate testing embodies the best aspects of the other two methods: the exactness of results achieved through full factorial testing, and the reduced number of required web visitors produced by the fractional factorial method.

Pros

• Ability to test a large number of elements (combinations) with a minimum number of web visitors – the adaptive method requires an order of magnitude less visitors than any other solution making it possible for mid to small websites to effectively run reasonably large multivariate tests;
• Increases overall conversion rates during the testing period – After brief initial training the algorithm is able to start converging toward the best solution while consistently testing page combinations that are better than the control. As a result, the conversion rate of the entire test, meaning the cumulative conversion of all page combinations that participated in the test, will be better than the control
• No need for the multivariate testing expert knowledge – The adaptive algorithm creates iterations for you. You do not need to know anything about the design of multivariate testing arrays.
• Affordable pricing – Hiconversion’s product is delivered at price point that is easily acceptable for companies of any size

Numbers do not lie

To quantify the difference in performance between the three methods discussed, we applied all three methods to the following real life multivariate test:

Number of test combinations: 196
Current conversion rate: 30%
Expected improvement: 20%

*See Google calculator

Conclusion

By breaking performance barriers, adaptive multivariate testing makes it possible for businesses of any size with a relatively low number of web visitors to improve their results through website optimization.

]]> http://www.hiconversion.com/multivariate-testing/multi-variate-testing-how-you-do-it-does-matter/feed/ 0 http://www.hiconversion.com/cro-business-tactics/cros-time-to-grow-2010-and-beyond/ http://www.hiconversion.com/cro-business-tactics/cros-time-to-grow-2010-and-beyond/#comments Fri, 23 Oct 2009 21:00:29 +0000 CJ Boguszewski http://hiconversion.net/?p=1309 read more...]]> The time for mass market adoption of conversion rate optimization solutions seems to have arrived. With eBusiness owners looking for a growth engine to pull their companies out of the recession, it’s time to put CRO at the heart of the enterprise. (editor’s note: product plug at the end of the analysis)

CRO Future is Bright

For many years we heard predictions from industry leaders like the Eisenberg brothers (http://www.futurenowinc.com/) and Jonathan Menendez (http://www.optimizeandprophesize.com/) that the time for website optimization has arrived. They have been predicting that companies will use conversion rate optimization (CRO) technology to increase the conversion rates of their web pages at the same rate they are using search engine optimization (SEO) to drive traffic to their sites.

Affordable turnkey conversion rate optimization services have arrived

Their predictions seemed so logical. Why would any company spend a fortune to attract web visitors and then waste the effort by having an unproductive site.  As we noted in a previous blog entry, the great majority of e-marketers are in dark ages when it comes to conversion rate optimization.

Up to very recently it looked like the 2-10 technology rule might be at work. This little known rule predicts that when pundits predict that some new technology will become mainstream in two years, the reality is closer to 10 years. Not any more.

Today we see major market forces at work that lead us to believe that the predictions regarding website optimization are increasingly becoming a reality.

Force #1: Scary “R” word (“Recession”)

The rippling effects of the market meltdown are affecting every aspect of the economy. Online marketing is no exception. The recession shows very few signs of abating before 2010 is out.

With few exceptions, companies are closely reviewing their advertising spend rates and in many cases cutting back dramatically.  So what can you do to help your company prosper in these difficult times? How about getting a higher rate of return from your current web traffic through increases in page conversion rates?

Force #2: Affordable optimization tools

When the Eisenberg brothers were making their predictions the only available optimization tools cost $5,000 or more per month. No wonder that only a few elite e-commerce players could afford to use it.

The technology landscape has changed dramatically. First, Google provided a free entry level product called Website Optimizer.

Force #3: Turnkey services

The best technology in the world is of little use without the time and resources to implement it correctly. It’s no wonder that Google is signing up a network of service providers trained to provide Professional Services.

Available alternatives include the turnkey solutions provided by Site Tuners and Wpromote. HiConversion has moved the service game to the next level. We offer a fixed price service with a performance guarantee.

The time for mass market adoption of conversion rate optimization solutions has arrived.  The combination of unprecedented economic pressure along with the availability of affordably priced breakthrough technology and service solutions provides the framework to make the predictions reality.

What a difference a couple of years makes. The following article is a follow-on from Kevin Gold’s original blog posting ‘Demystifying the Conversion Rate‘.

Conversion rate optimization has become more than a buzz word in the online marketing industry. The original “conversion marketing” firms like Future Now, Offermatica (acquired by Omniture), Optimost (acquired by Interwoven), and SiteSpect are now joined by a score of new technology and service providers, our company included, and by an ’800 pound gorilla’ named Google with its free tool called Website Optimizer.

While it is true that most online marketers continue to focus on generating more “traffic”, many have realized that improving conversion rates is a key part of the online marketing ROI equation. We still have a long way to go, but things are rapidly changing.

For those who are still on the fence and not committed on using conversion rate optimization products or services the picture is much clearer today than ever before:

Conversion rate optimization is the fastest way to improve online marketing ROI

Spending your online marketing advertising budget on driving traffic to your website is only a half of the battle. Converting that traffic into useful results is the final element of your online marketing chain that will make or break your online advertising ROI.

CRO: Very high ROI

Your landing pages might look simple but they contain many elements that impact visitor reaction. For example, you might think that your ‘Submit’ button should be in red, or that your CNET product recommendation should be prominently positioned.
These are only assumptions and the only way to find out what works best is to test as many different ideas as possible.

Our experience indicates that with a relatively modest effort and expense, and within a very short period of time, you could experience a significant increase in conversion rate, i.e. increase in your online marketing ROI.

Little risk – quick time to value

Until recently, conversion rate optimization required months of testing and generated a great deal of uncertainty about a potential dip in conversion rates during the test itself. For the great majority these factors created an unacceptable business proposition. The devil that they knew was a lesser evil that the devil they did not know.

Make money while you test

Not any more. Hiconversion has introduced an adaptive multivariate testing methodology that is able to lift conversion rates even during the test itself. Our self learning method adapts to visitor traffic in real time and after a very brief learning period it starts to consistently test only those page impressions that are better than the control.

This means that you start making money even during the test itself.

Great testing tools

Depending upon your business objectives and volume of traffic you can easily find the testing solution that best fits your needs.

Google’s Website Optimizer is a great entry level solution for the smallest volume sites. It is free and provides simple a/b and small multivariate tests.

For large enterprises who desire conversion rate optimization integrated with web analytics or a web content management solution, the choice of Overture or Interwoven will make more sense.

The downside is that both Google and the enterprise class tools are traffic ‘hogs’. So, if you are a mid to small organization with normal web traffic then the only tool that can effectively serve your needs is hiconversion.com. Our adaptive methodology requires dramatically less web traffic than any other tool.

Flat-rate service solutions

Similar to other online advertisement functions, like SEO (Search Engine Optimization) or SEM (Search Engine Marketing), conversion rate optimization is now being offered as a total service solution. This approach is ideal for those with limited resources to acquire a new marketing skill

Hiconversion has taken service offerings to the next level by introducing productized service packages that come with flat rate pricing and a performance guarantee.

Our goal is to increase the size of the service market and to feed an ecosystem of service provider resellers with ready to go projects. We desire to create a win-win situation for our customers and our resellers. Our customers are assured a single point of contact and accountability. Our resellers get to focus on their conversion rate optimization competencies instead of sales and customer support.

Conclusion

Conversion rate optimization is going mainstream we are seeing a coalescence of market forces that will propel it to every day use by online marketing professionals.

CRO - Walk and Chew Gum

While reading the executive summary of the MarketingSherpa Landing Page Handbook (second edition) the following statement caught my attention: “Unfortunately, most marketers don’t have the time or budget for extensive landing page testing. They have a campaign launching soon, and a landing page is needed pronto!”

Often, the landing page is the least considered element of the campaign. Marketers who will fuss over ad creative and fret for hours about media buys will ask the design department to fling something up there to land on.

We suspect some marketers truly believe that if their outbound campaign is good enough, the creative will pre-sell prospects on the offer no matter how lame the landing page is. In other words, many marketers think the outbound campaign is doing the heavy lifting, and the landing page exists simply as a passive collection cup for all the sales or leads generated by the campaign.

The exact opposite is generally true.

The good news is that with Hiconversion’s adaptive multivariate testing methodology you now can ‘walk and chew gum’ at the same time.

In our recent blog entry titled ‘Not all multivariate testing methods are equal‘ we introduced our patent pending adaptive multivariate testing technology that is revolutionizing the conversion rate optimization business. A lesser understood aspect of our approach is its ability to adopt to live web traffic in real time.

Translated, this means that a need for a better landing page should not delay for a month or two the start of your new marketing campaign. Your campaign and multivariate optimization testing can now start at the same time.

Adaptive MVT: Make money while you test

During the test, our algorithm will show different page variations, record visitor reactions, and along the way it will start converging toward the best performing version of your landing page.

With other multivariate testing methods you have to be prepared for a month or two dip in conversion rate. Our adaptive method will go through a very brief initial training before being able to start testing only page variations that are consistently better than control (the page being optimized). This means that our solution will increase your conversion rates even during the test itself.

Hard to believe that it can be this easy? Watch our online demo and then try it yourself for free with our free trial. It only takes a minute to sign up, and you can be creating your own landing page optimization experiment in minutes.

Converting visitors into customers is the most important but often most neglected aspect of Internet marketing.

Take a look at your own marketing organization and see how much time and money you have dedicated to web traffic generation (organic SEO or paid advertisement) versus web page optimization. No wonder that we had to describe the current state of the online marketing affairs as ‘the cart before the horse‘.

Statistics provided by FireClick speak for themselves:

Considering tremendous ROI potential one would logically ask why everybody is not using CRO. Well, we can provide at least two good reasons:

Conversion Rate Optimization was introduced first as a new marketing art. The pioneering companies, like FutureNow, have evangelized persuasive copy writing and the best practices in landing page design. In the Internet business this was equivalent to gold digging. The optimization expert will play few ideas hopping that he will strike ‘gold’.

A new emerging trend in CRO is created by new breed of solutions, like Google’s Website Optimizer and our own Hiconversion Pro. These tools are removing adoption barriers and bringing benefits of this technology down to masses.

Before deciding which page to test first, it’s best to create a page importance ranking.

Typically, dedicated landing pages tend to be the most valuable optimization targets. Their traffic usually comes from paid online campaigns. However, do not ignore the organic pages, such as home page or topic/product pages.

Know your traffic and conversion rate stats

Before starting with CRO initiative it is always a good idea to know the basic page statistics. You will be surprised about percentage of who have no idea no idea about real page statistics.

The most acute problem is the conversion rate measurement. Even a large percentage of companies who are versed into using web analytics tools are not correctly tracking their conversion rates. One can blame current generation of analytics products that originated in the counting ‘eyeballs’ era of the Internet. They will tell you everything about you web traffic but you have to work very hard to figure out the number one metrics of your website: conversion rate.

The good news is that you have of a choice of a lot of free web analytics solutions that are surprisingly sophisticated, and is sufficient for most websites. Let us mention few:

Recommended Resources

In preparation for your optimization test it is a great practice to revisit your key marketing components:

• Who are your visitors? Knowing who is entering the site, who your target market is,
  and if you are really appealing to them is key to a successful landing page.
• How good is your page layout? How visible are key messages and call for actions. If
  you page has a poor design then optimization may not make sense. Instead you have
  to develop a new layout that complies with basic landing page design practices.
• How good are your headlines? Headlines are one of the first things that pop out to a
  visitor as they land on your page. The headline needs to grab their attention securing
  them for at least another 20 seconds on your page.
• How good is your content? A sticky site is one that will engage your visitor and get
  them to stick around longer raising the chance of conversion. There are several
  different methods that you can use to make your site “stickier”, and some include
  persuasive copy, reviews, videos, etc.
• Study your competitors. The objective here is not copy what your competition are
  doing but instead to find your unique voice and unique positioning.

We are sure that you have seen advertisements that claim 3x-20x improvements of the conversion rate. While numbers might be truthful they are a pure hype.

Each web page has its unique problems and its realistic potential. Therefore, it is wrong to apply somebody’s one time extreme success to your individual case. Even worse, since we are talking about relative results, such extreme numbers may speak more about how horrible web page was, rather then how good job a particular optimization provider has done.

The 10% Increase Rule does not mean that you should not get better than 10% increase. Instead, you should use this rule as your risk management policy. If you are getting a positive ROI after only one month of optimized page use, then ongoing use or any other increase beyond 10% increase are a pure profit.

Conversion Rate Optimization is a new Internet Marketing discipline. A new breed of optimization solutions are making it easier, but, if you are doing it for the first time this can be quite daunting task.

We are writing this tutorial driven by desire to encourage every online marketers to establish optimization testing as one of his best marketing practices. You should not be afraid of doing it yourself. However, we firmly believe that it is much more effective to get a service provider to jumpstart your program. There are many specialized service providers that can help you with your project, our company included:

• AlexDesigns.com – one of the pioneers of the landing page optimization; pricing
  not disclosed;
• Hiconversion.com – offers flat rate turnkey conversion rate optimization services with
  10% increase in conversion rate guarantee; prices start from $995/test;
• WebsiteOptimization.com – offers a broad range of website optimization services;
  pricing not disclosed;
• SiteTunners.com – offers flat rate turnkey services with 5% increase guarantee; pricing
  not disclosed;
• WiderFunnel.com – one of the Google’s Website Optimizer premier partners; pricing
  not disclosed;

CRO - The Elephant in the Room

Seth Godin, in his post “How to Make Money with SEO”, narrows SEO’s contribution to:    Get rankings on a very popular, highly competitive keyword that exposes new visitors to your website Get rankings for your branded search terms that bring traffic using the engines as a primarily navigational device

SEO View

Rand Fishkin responded quickly “against surface-level analysis of our beloved profession” with There’s Way More Than 2 Ways to Make Money with SEO.

I was very intrigued about the fact that the leading online marketers continue to re-hash old and dry arguments while at the same time they were completely ignoring ‘the elephant in the room.’ It’s called website conversion rate.

Rand’s visual explanation of how SEO’s can help you make money is represented by the picture below:

In reality this picture looks more like the one below:

CRO View

SEOs are limiting their engagement only to traffic generation while leaving the responsibility for web page conversion rates to clients. In reality, clients are ill equipped to deal with the conversion issue and as a result, a lot of good traffic is wasted. As a matter of fact, FireClick reports that 98% or general traffic is wasted.

Optimize web pages for increased conversion rates and the business value provided by SEO to clients changes dramatically.

The Opportunity

And yet, all the money and effort are still dedicated to generating traffic.

We should not be surprised. Dancing with the big and slow elephant is not as sexy as planning the next big social marketing gig. The thing is that more and more clients are becoming aware of the issue and demanding conversion rate optimization as a standard part of the SEO service.

We see many SEO vendors smelling money in the conversion rate optimization opportunity. The business case is quite compelling:

• SEO growth is slowing down: no problem, we do not have to sign as many new customers, we can grow by offering conversion rate optimization services to the existing customer base
• SEO prices are declining: no problem, conversion rate optimization premium prices

If you are wondering about where you can learn about conversion rate optimization we can gladly point you to series of posts published at CRO Article Directory.

The historic shift from traditional to digitally-based marketing has created a mini-renaissance in marketing methodology. The level of innovation and creativity is at an all-time high. The airways are filled with new methods and tricks to the point of saturation. The downside to this phenomenon is that it is easy to get distracted by the latest and greatest and lose site of the marketing basics that apply, regardless of media.This article will cut through the chatter and focus on the basic elements of the online marketing business.

The lay of the land

Developing an online marketing program exposes us to tools and terminology that might be new to us, but the underlying framework and goals are consistent with all good marketing efforts.

The Mission. Your online marketing mission is very simple: generate quality traffic, convert visitors into results, and take the money to the bank.

Online Marketing: the simplistic view

The Challenge. An effective web marketing campaign involves a delicate balancing act. Generating qualified web traffic requires lots of hard work and significant investment. Spending a fortune to attract a high volume of “eyeballs” that never make it beyond your homepage is of little use. Converting your website visitors into customers is the true measure of website effectiveness. Accomplishing these goals in a cost effective manner has not been easy to date.

Online Marketing: Pitfalls

Now that we understand the game, let’s see how it’s played.

Traffic Generation

This component of online marketing is generally well-understood. When industry professionals talk about traffic generation, they typically address both outbound and inbound channels. Let’s explore these in some more detail.

Traditional Outbound Marketing Channels

These channels are best described as traditional marketing approaches, just applied to the Internet as a new medium. One typically begins by segmenting the potential market based on probability of success and then ‘shooting’ at your target(s) with one of tools below:

Email Marketing – build your own or buy e-mail lists and send email newsletters, product promotions, etc.

Pay-Per-Click Advertising (PPC) – bid for keywords at major search engine sites, your ad location will depend how much you bid.

Online Public Relations – create press releases – traditional PR firms have expanded their focus to include online media, as revenues from programs targeted at traditional print media have diminished.

Affiliate Marketing – bid in a way that is similar to PPC – basically this is a variation of display advertising with a success-based cost structure.

Innovative Inbound Marketing Channels

Most of action and buzz as of late is associated with inbound marketing channels. These channels represent one of the more significant innovations in the last half-century. The uniqueness of inbound marketing is that it leverages the Internet as both a medium of communication as well as a cultural phenomenon.

The basic premise of inbound marketing is simple: we will not contact you — instead we will create an environment where you will want to contact us. To succeed, the online marketing professional must use new communication channels to attract attention to his or her offerings:

Blogging and Viral Content – creating unique content that will further increase your ranking with search engines and establish interaction with your potential customers.

Social Media Marketing (SMM) – leveraging social media platforms (small and large) to earn visibility and traffic. For example, your participation in Facebook Group pages, Twitter marketing, pushing content on Digg, etc. will in return help you build your brand and generate traffic to your website.

How to choose your channel mix?

There is no universal answer to this question. On a very high level, more established companies that are selling better-known brands will benefit more from the traditional outbound channels than younger companies with niche offerings. For a more in-depth analysis, we recommend the following blog: A Checklist to Choose Which Internet Marketing Channel is Right for Your Business.

Conversion

Conversion rate management is the least understood element of online marketing. Few online marketers know the conversion rates of their web pages, nor are they really aware just how much money they are losing because of poorly performing web pages.

Online Marketing: Conversion importance

For example, FireClick reports that 98% of web traffic is wasted.

Fireclick Stats

In the past Conversion Rate Optimization (CRO) tools (often also called A/B, split, and multivariate testing (MVT) tools) were complex and expensive and resulted in most marketers avoiding this potentially profitable area. Now, with solutions like Hiconversion and Google’s Website Optimizer (GWO), along with affordable turnkey services, it is hard to understand why companies of all sizes are not using these tools.

Often, the cause for inaction is misinformation. Some common myths surrounding CRO include:

Myth #3: CRO is very expensive
Not true. Before Hiconversion, you had to invest $5,000 to $25,000 for a single web page optimization. Not any more. With Hiconversion, you can optimize your web pages for only $145/mo.

Myth #4: CRO is very technical and a very complicated
Not true. Hiconversion is designed for a non-technical marketing and business users. A simple, point-and-click interface makes the optimization process a breeze.

Myth #5: CRO is risky
Not true. Before Hiconversion, you had to be prepared to have a dip in your conversion rate during the MVT. Not any more. The Hiconversion system adapts to your web traffic in real time, while lifting your conversion rates even as you test.

Dollars and Sense

To maximize your profitability, you have to find a critical balance between investment in traffic generation and optimization of your web pages for higher conversion rates.

Investment in Traffic

It pays to keep in mind that an investment into traffic generation provides a linear (proportional) return on your investment (ROI). On the other hand, a small investment in CRO can produce an exponential ROI.

Investment in CRO

In reality, of course you need both increased traffic and increased conversion rates. We believe that 90%-95% of your marketing budget should be allocated to traffic generation activities. That is where you need to do the heavy lifting. What you should not do is to completely ignore the importance of CRO. If you are interested to dive into more details please read the Business Case for Conversion Rate Optimization.

Final Thought

We are often asked where to start and what things need to be done first – should we generate additional traffic or optimize our web pages? A simple 10% rule comes in handy. Determine the monthly value of a 10% increase in the conversion rate of your most important web page(s). If the answer is $1,000 or more you are a prime candidate for CRO. If it is less than $1,000, you should first focus on generating more web traffic. ]]> http://www.hiconversion.com/marketing-funnel/online-marketing-re-explained-again/feed/ 0