Retailers Not Measuring Up

Many online retailers are shooting themselves in the foot because of lax measuring processes, according to a new survey from WebTrends.

by Kristina Knight

Rather than focusing on unique visitors, e-tailers are allowing third party cookies, click-throughs and pageviews to determine how online and email campaigns are performing. As retailers head into the Christmas buying season, this kind of practice could lead them to make the wrong decisions on campaigns and lose revenue.

WebTrends surveyed 300 Internet and multi-channel retailers and found more than 63% of those surveyed were relying upon click-throughs, pageviews and visits and orders. The problem with this method is that it can lead to double counting or declining conversion rates because users don’t always convert on a first visit. Many times it is a return visit that leads to conversion.

In comparison only 10% of retailers were using visitor based metrics (first party cookies) instead of faulty third party cookie analysis.

Greg Drew, WebTrends CEO and president said, "It's important that all marketers understand and embrace accuracy best practices. . .these issues can literally be the difference between making the right or wrong decisions."

In the ’06 holiday buying season, 80% of retailers said they would use email advertising to boost revenue. Clickstream-based information, gathered by first party cookies, is needed for this type of activity. A 2005 Jupiter Research survey showed that emails targeted based on clickstream data offer 3 to 9 times revenue improvement over broadcast emails.

To evaluate true campaign response, advertisers must track unique visitors and their conversion rates. To do this, retailers need to utilize first party cookies rather than third party.