Winning in a Web 2.

0 World: Metrics-Driven Success
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WHITE PAPER
Winning in a Web 2.0 World:
Metrics-Driven Success
Table of Contents
Executive Summary 4
What is Web 2.0? 4
Measuring Web 2.0 4
How are my customers moving to Web 2.0? 5
What are the business applications of Web 2.0 technologies? 5
Where should I invest my marketing dollars? 7
LIVE Profles in action 8
Summary 10
Web 2.0 at a glance 11
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Executive Summary
Web 2.0. You can’t turn around without hearing this buzzword. What is Web 2.0? And what does it
mean to you?
The term “Web 2.0” encompasses multiple trends and many different technologies. For marketers,
the underlying issue is that consumers are becoming more sophisticated, engaging in longer term
relationships, and maintaining greater control over their online experiences. Not only is your
relationship with site visitors becoming more complex, but Web 2.0 adds a host of new options (RSS,
blogs, Ajax, etc.) to an already long list of options (email, banner ads, affliates, etc.) as to where to
spend your marketing dollars.
To make sure you spend your marketing dollars where they will have the greatest impact, you need a
scientifc approach to marketing. Web 2.0 technologies must be measured based on the business value
they create for you, and evaluated against all your other alternatives. To make the right marketing
decision, you need the right data—data about how your investments are helping maximize the value of
every customer relationship and improve your bottom line.
In this white paper, we will discuss various Web 2.0 trends and technologies, and we will explore how
organizations are using these technologies to drive business results.

What is Web 2.0?
Web 2.0 is simply a phase in the evolution of the World Wide Web. The overarching characteristic of
this phase is that the Web is no longer simply about information, it is now about interaction. There
are new and existing technologies associated with Web 2.0—from blogs to social networks to AJAX.
These technologies enable consumers to interact with your company and other consumers, participate
in and infuence discussions, and control their experience.
What does this all mean to your business? Consumers are now better equipped, and accustomed to
more interactive relationships, sustained over a longer period of time. As options for communicating
with consumers expand, companies have an increasingly diffcult task of determining where to invest
their scarce resources. To make the best investment decisions, you need a measurement strategy and
solution that enables you to track and monitor the business impact of Web 2.0, particularly as it
relates to your traditional digital marketing investments.
Web analytics is of course not new, but there are new requirements for measuring in the Web 2.0
world. Companies that are able to effectively measure all their web interactions with visitors—whether
Web 2.0 or traditional web—will enjoy a competitive advantage.
While the value of measuring unique visitors (as opposed simply to clicks and visits) has always been
important, the Web 2.0 paradigm accentuates this importance. Winning in a Web 2.0 world means
that you need to measure and value engagement with your consumers. It is no longer about conversion
at a point in time. It is now about the nature of the relationship over time, and the many ways that an
individual can add value to your business.
Measuring Web 2.0
This white paper focuses specifcally on the nuances of measuring Web 2.0 technologies. It is
not intended to be a comprehensive resource book on Web 2.0, but rather a guide to the new
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measurements required to evaluate those areas of Web 2.0 that create opportunities for businesses to
leapfrog their competition.
Analysis is fundamentally about answering questions, and there are several unique questions
businesses need to understand as they embark on utilizing Web 2.0 technologies:
• How are my customers moving to the Web 2.0 paradigm? What indicators tell me it makes sense to
adopt these technologies? Does my target market participate in blogs? Do I service a demographic
that actively consumes streaming media and podcasts?
• What are the business applications of Web 2.0 technologies?
• How do I know when my use of these new technologies is successful, and how do they compare to
other opportunities? In other words, where should I invest my marketing dollars?
How are my customers moving to Web 2.0?
The frst question you need to consider is how Web 2.0 technologies are being adopted by your
customer base.
• Are your customers likely to participate in user-generated content? Will your site visitors read and
comment on blogs? Will they share their views in user reviews? If your target audience is loyal
and passionate about your company, providing them an opportunity to share their views can be
extremely valuable, enabling them to infuence others.
• Do your users have a special skill or knowledge that relates to your product or service? If so, wikis
and forums are a great way for them to contribute to the body of knowledge around your products
and services, enriching their experience and that of others.
• Are your customers likely to be comfortable with rich internet applications that function somewhat
differently from those to which they are accustomed? Is your user base change averse? The more
accepting of change your audience is, the more rapidly you can adopt Web 2.0 technologies.
• Have your competitors deployed leading technologies? If so, you may want to escalate your
adoption of Web 2.0.
• Do your customers frequent sites that have leading edge technologies? A positive response indicates
that your customers are ready to accept Web 2.0 technologies.
• Do you serve a technically savvy group of customers? If your target market readily adapts the latest
technologies, Web 2.0 technologies are likely an excellent way to invest your resources. If your
customers are slow adopters, consider waiting until they are farther along in the adoption curve.
What are the business applications of Web 2.0 technologies?
There are a number of technologies associated with Web 2.0 that enable interaction, participation and
consumer control over their experience.

Web 2.0 technologies serve three key functions:
• Enabling users to develop content
• Providing new means to reach a target audience
• Providing richer, more interactive applications that give visitors more control.
Each of these capabilities and its associated technologies provide different value to companies, and
each needs to be measured and tracked in its own way. However, they share common characteristics
that drive the need for new measurement strategies.
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Opportunity for visitors to contribute content
A number of Web 2.0 technologies enable visitors to contribute content on your site. These include
user reviews, blogs, wikis and forums. The “word of mouth” concept is well understood and has
always been considered to be a reliable and trusted source of information about a product or service.
The Internet, and especially new Web 2.0 technologies, has extended “word of mouth” into “word of
mouse,” whereby a single individual can reach a much larger number of people, including people they
do not personally know.
As you adopt technologies that invite user-generated content, it is important to understand who is
viewing that content, and how it infuences visitor behavior. Moreover, it is important to identify the
content contributors, and which ones are infuencing other site visitors.
User reviews are an excellent way for companies to engage their clients in dialogue. PETCO deployed
user reviews and has realized tremendous business advantages. After deploying user reviews, PETCO
created navigation that allowed visitors to drill into top rated products. They found that visitors who
chose the top rated product navigation path converted at a higher rate than other browsers. In fact,
PETCO found that they converted 10% higher within a session, and 49% higher when shopping
over multiple sessions. (Source: Bazaarvoice, Ratings, Reviews and ROI: How Leading Retailers Use
Customer Word of Mouth in Marketing and Merchandising)
User-generated content, and in particular user reviews, has signifcant impact on other marketing
activities. Businesses have found that utilizing the content in other marketing channels—such as
email—has increased conversion rates. Furthermore, user-generated content can have a tremendous
impact on natural search. For example, after deploying user reviews, CompUSA they saw a dramatic
increase in traffc coming from natural search. All the product reviews provided additional content
to be indexed thereby increasing natural search listings. Interestingly, CompUSA discovered that this
traffc was particularly valuable in that they purchased higher price items (43% higher average item
price) and spent more per order (50% higher average order value) than visitors from other sources.
(Source: Bazaarvoice, Ratings, Reviews and ROI: How Leading Retailers Use Customer Word of
Mouth in Marketing and Merchandising)
Finally, consumers who provide content represent a high value segment. Providing these individuals
with a measurable environment in which to contribute content affords companies the ability to
identify the top contributors, and to ensure that they are treated according to the value they provide.
In a recent study, Yahoo! defned a group of people known as “brand advocates,” who are typically:
• Well-connected consumers with a larger sphere of infuence
• Avid researchers who consider multiple brands, making them more open to dialogue with marketers
• Committed to a brand once they purchase
• Likely to recommend brands, and who tend to talk about positive experiences
• Opinion leaders—infuencing other people’s purchase decisions.
By focusing on this group, and valuing not only their direct purchases (or conversions), but their
infuence on the market, you can harness a truly awesome power: word of mouth marketing. (Source:
Yahoo!, Engaging Advocates through Search and Social Media, Yahoo Summit Series, Jan. 2007)
New means of reaching customers
Some of the technologies associated with Web 2.0, such as RSS feeds, podcasts, social networks, and
comparison shopping sites, provide new vehicles for reaching visitors and can drive customer retention.
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It is important to understand how many people use these channels, how they perform as referral sources
for your site, and what visitors from these sources do once they are on your site. You may fnd it
benefcial to defne new visitor segments based on how customers respond to each of these sources.
For example, RSS feeds are gaining popularity with many companies. Travel companies, such as
Orbitz, are using RSS as an alternative to email for pushing promotions to consumers. Likewise,
companies like Circuit City are using RSS feeds to push promotions to loyal visitors. Perhaps more
than any other site type, media sites like MSNBC make extensive use of RSS to push out content to
their loyal readers.
Podcasts are another new way to reach consumers. KeyBank suspected that podcasting would be
effective means of reaching customers, and launched a podcast program featuring a well-known
fnancial analyst who speaks about industry forecasts and market trends. KeyBank’s program resulted
in 70,000 podcast downloads in 2006. Other businesses are leveraging podcasts by identifying existing
podcasts relevant to their product or service, and then seeking out advertising opportunities in these
podcasts. (Source: Forrester, January 24, 2007, Making Podcasts Work for Your Brand)
In addition to RSS feeds and podcasts, social networks are an additional Web 2.0 technology that can
drive the acquisition of new customers. Consider posting content on social networks such as YouTube
or advertising on special interest social networks, such as the “cat lovers” section of My Space. By
offering content that is delivered in the format that is most appealing to a given segment, you create
visitor loyalty.
Enhancing visitor experience with rich internet applications
Putting web visitors in control of their own online experience means offering content and applications
in such a manner that they can access it where, how and when they want. Rich internet applications
(RIAs) such as video, AJAX and Flash applications, or even portals, as well as applications and
content built for mobile devices, offer precisely that opportunity. Some visitors may prefer to receive
content via video, while others may prefer audio or text, depending on where they are at the time,
what technology is available to them, and their personal preferences.

Visitors who come to a traditional website can also enjoy an enhanced experience through the use
of RIA applications. Companies from all verticals are discovering the benefts of implementing
multimedia on their sites, whether video (popular in media), Flash applications (popular in retail)
or AJAX. For example, a single screen checkout process allows a visitor to compare options, flter
on multiple criteria (such as brand and price) and complete the checkout process in less time than it
would take if they were forced through a traditional linear, multi-page process. Streamlining processes
such as checkout can drive a tremendous lift in conversions. TJMaxx.com and Homegoods.com were
able to boost their conversion rate by 50% by deploying a single screen checkout process using a rich
internet application developed in Macromedia fex. (Source: Internet Retailer, February 22, 2006)
Where should I invest my marketing dollars?
Web 2.0 marks a shift in how you interact with consumers, with increased focus on longer term
relationships. Of course, immediate conversions—such as sales—are still critical to measure. But
understanding your visitors and customers over time is an increasingly important aspect of this
new paradigm.
To understand your customers’ behaviors and preferences over time, you need a complete record of
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every interaction, and you need that interaction associated to a unique individual. In other words,
you need a Lifetime Individual Visitor Experience (LIVE) Profle™. With a complete picture of an
individual’s online visitor behavior, you are able to personalize site experiences, enable one-to-one
marketing, understand behavior across channels, and accurately assess the value both customers and
your marketing activities.
LIVE Profles in action
To understand the value of LIVE Profles, let’s look at a scenario that illustrates how such a record
provides marketers with a holistic picture of a customer, thereby empowering them to make better
decisions.
A fnancial services company wants to understand the value of various aspects of its marketing mix,
which includes RSS, email, and paid search.
1. A visitor, Tom, comes to the site via a paid search advertisement.
Tom browses through several pages, registers for RSS and an email newsletter, and then leaves.
2. Tom regularly reads your RSS feed, and returns based on some new “how-to” information
on refnancing.
He reads the article, browses your mortgage loan pages, and leaves.
3. You then send Tom an email promoting the current low mortgage rates.
Tom returns to your site, reads more about the current rates, starts an application, and leaves.
4. Tom reads a blog entry about refnancing on a fnancial site: “The time is now and rates have
never been lower.”
He sees your ad on the page, clicks through to view your current rates, starts the application a
second time and leaves.
5. Tom then direct loads your site and completes an application for a mortgage loan.
If you only look at session-based data, you will undervalue all your marketing activities, or assign
inappropriately high value to the last activity that results in conversion. Marketing happens over time,
and marketing activities that acquire new visitors, or move the visitor along in the sales cycle, are
equally valuable as the activity that results in conversion.
Let’s examine the above scenario from a session-based perspective:
• Paid search didn’t convert
• RSS didn’t convert
• Email didn’t convert
• Blog didn’t convert
• Direct load converted.

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Using only session-based data, your conversion rate was 20%. A full 80% of your sessions did not
result in conversion, and there is no apparent value. The conclusion you would draw is to eliminate
investment.

However, if you look at this scenario from a visitor-based perspective:
• Paid search, RSS, email, a blog ad and direct load all contributed to a single conversion, so
you had a conversion rate of 100%.
• 100% of your visitors converted to customers.
Based on the session-based perspective, you would likely stop investing in paid search, RSS, blog
advertising and email. However, it is clear from the scenario that these activities were vital components
in driving Tom to complete an application. Without your paid keyword, Tom may never have found
your site. Without your RSS feed, he might never have understood the value of refnancing. Without
the email, you would not have prompted him to look at rates. And if you had not advertised on the
blog, Tom may not have come back to your site.
Session-Based Approach
LIVE Profle Approach
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If you are only looking at session-based data, you are not seeing a complete picture, and you will
inevitably make poor decisions about your marketing investment. Our scenario clearly illustrates the
value to your company of establishing a relationship with the customer, and points out how looking
at that relationship as a whole drives you to a very different conclusion than what you would have
reached based on session data alone
By tracking the right metrics, you will understand the value of Web 2.0 content and interactions
to your business—not just in a single session, but over the lifetime of your relationship with an
individual. By understanding how these tools and techniques affect your business, you can make the
right decisions about your marketing investment.
Summary
Web 2.0 is not an end in and of itself. Rather, it is part of the continuing evolution marketers are
experiencing as the World Wide Web matures. Just as we are becoming comfortable with Web 2.0 and
its technologies, one day soon we will be facing Web 3.0, 4.0 and beyond.
The one constant is that technology will evolve, consumers will become more sophisticated and more
empowered, and it will become increasingly important to know your visitors and customers at an
individual level, and to build long-term, deep relationships with them. Personalization and relationship
marketing are becoming more of a reality. To be successful, marketers need a robust behavioral
analytics solution and a complete record of all visitor behavior—not a sampling of data, and certainly
not simple statistics about click throughs and page hits. Only with a customer-centric data asset will
marketers be able to harness the power of the Internet and provide their visitors with a truly personal
experience that optimizes their business goals.
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Technology Defnition BusinessUse WhatQuestionsDoYouNeedtoAnswer?
User Generated Content
Blogs
User Reviews
Wikis
Forums
Web 2.0 at a Glance
Websites where
entries are made
in journal style,
displayed in a reverse
chronological order,
and often include a
comment feature.
Build relationships with
consumers.
• How do people get to my blog?
• What do they do after visiting my blog?
• Do blog visitors convert at a higher/lower rate
than other visitors?
• Who is adding content?
• How often do they visit my blog?
• How many unique visitors do I have?
Tool that enables site
visitors to provide
reviews of products,
content and services.
Provide consumers peer
product reviews.
Establish site as resource
for researching products.
• How many user reviews will a potential
buyer read?
• Do these reviews increase repeat visitor
behavior?
• Do the reviews draw new visitors to the site?
• Do they see increase in unique visitors or
sessions to product pages?
• Do they increase conversion?
A type of Web site
that allows the visitors
themselves to easily
add, remove, and
otherwise edit and
change some available
content, sometimes
without the need for
registration.
Allow individuals with
special knowledge to
contribute to data set.
• Is the content popular?
• Does it affect conversions?
• What visitor segment uses the wiki?
• Who contributes to it?
• Does it encourage more visitors to come to
the site?
• Does the contributed content get picked up
by search engines and help pick up new
audience?
A facility on Web for
holding discussions.
Develop relationship with
consumers.
• Is the content popular?
• Does it affect conversions?
• What visitor segment uses the forum?
• Who contributes to it?
• Does it encourage more visitors to come to
the site?
• Does the contributed content get picked up
by search engines and help pick up new
audience?
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Technology Defnition BusinessUse WhattoMeasure
New means of reaching consumers
RSS
Podcasts
Social
Networks
Comparison
Shopping
RSS delivers its
information as an XML
fle, commonly called
an RSS feed. Programs
known as feed readers or
aggregators can check
a list of feeds on behalf
of a user and display any
updated articles that they
fnd, giving the user a
single place to aggregate
information of their
choosing.
Push time sensitive data
(news, blog entries, and
promotions) to consumers.
• How frequently are RSS feeds accessed?
• Do the people who sign up for RSS feeds visit
your site more often and for longer periods
of time?
• Do they browse content or products more
deeply or visit that specifc content or product
and leave?
• What is the impact on conversions?
• How often is my feed viewed?
• How many people are subscribed?
• What is the growth rate of my subscribers?
• Which content is most engaging to visitors?
A podcast is a multimedia
fle distributed over the
Internet using syndication
feeds, for playback on
mobile devices and
personal computers.
Provide value add, topical
content in a manner easy
to digest.
Reach new audiences via
podcast aggregators (e.g.
iTunes).
• How many times was the podcast
downloaded?
• How many people came to my site as a
result of the Podcast?
• What was the impact of podcast on
conversions?
• How long did people listen to the podcast?
A social network service is
social software specifcally
focused on the building
and verifying of online
social networks for various
purposes.
Identify and advertise
to targeted groups of
individuals.
• Are the social networking pages discussing
my site/linking to my site?
• How many visitors are coming to my site
from social networks?
• How do these visitors convert?
• How many impressions, clicks and
conversions are coming from my
advertisements?
A price comparison
service (also known as
shopping comparison
or price engine) allows
individuals to see lists
of prices for specifc
products. Most price
comparison services
do not sell products
themselves, but source
prices from retailers from
whom users can buy.
Reach a broader audience
by placing your offerings
on a comparison shopping
engine.
• How many people come to your site from a
comparison shopping engine?
• What products/services most frequently
generate these referrals?
• What is the quality of referrals in terms of
conversions?
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Convey content that is in video
format.
• How often was content accessed?
• How long was it viewed?
• Was it viewed in its entirety?
• What was the impact on conversions?
• How much ad inventory do I have?
• How many ads were viewed?
Ajax makes web pages
feel more responsive by
exchanging small amounts
of data with the server
behind the scenes, so that
the entire web page does
not have to be reloaded
each time the user makes
a change.
Flash is commonly used
to create animation,
advertisements, various
web-page components, to
integrate video into web
pages, and more recently,
to develop rich Internet
applications.
Deliver more user friendly
business applications that
are easier to use, and
provide visitors with a richer
experience.
• How has Ajax/Flash improved the process?
• What is the impact on my conversion rate?
• Is the process completion rate higher?
The Web as accessed
from mobile devices such
as cell phones, PDAs, and
other handheld gadgets
connected to a public
network.
Enable users to access
content anywhere.
• What content is accessed via mobile devices?
Multimedia uses multiple
forms of information
processing such as
text, audio, graphics,
animation, video) to inform
or entertain the user
audience.
A site on the Web
that typically provides
personalized capabilities to
its visitors
Provide a single place for
visitors to aggregate content
and create a personalized
experience
• What content or applications are accessed?
• Where in the portal is the content/application
being accessed?
Technology Defnition BusinessUse WhattoMeasure
Richer, user defned experiences
Video/
multimedia
Ajax/Flash
Mobile web
Portals
About Coremetrics
Coremetrics is the leading provider of on-demand web analytics and precision marketing solutions,
offering the industry’s only web analytics platform that captures and stores all customer and visitor
clickstream activity to build LIVE (Lifetime Individual Visitor Experience) Profles. Representing
the single most accurate and comprehensive source of online customer data, LIVE Profles serve as
the foundation for all successful digital marketing initiatives. Coremetrics services more than 1,000
brands and has delivered over $300 million in documented ROI in the past two years. Coremetrics is
also the integrated web analytics solution for IBM WebSphere Commerce, delivering a best-of-breed
multichannel business analytics solution. The company is privately held with funding from Accel
Partners, FTVentures, and Highland Capital Partners and is headquartered in San Mateo, California.
To learn more about Coremetrics, visit www.coremetrics.com or call 877-721-CORE.

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