These days, everyone wants to improve the return on their investment on their websites. To my understanding, following are the most important ROI metrics one should look for when deciding whether their online initiatives are successful.

Japan is a lucrative market for SEO services.  However, due to the unique language and other cultural factors, it has been difficult for foreign SEO companies to penetrate into this very attractive market.   To rank higher in the search engines for Japanese market, the following ten factors play a major role. However, please be aware that the factors come in no particular order.

1. Country-specific domain such as co.jp
2. Japanese language content
3. Keyword usage in the title tag
4. Links from other local domains
5. Geographical location of the hosting server
6. Local business address as a text on pages of the site
7. Registration of the site in Google Local Business center
8. Geo-targetting preference set in the Google Webmaster Tools
9. Manual review of the site by major search engine employees
10. Address associated with the registration of the domain being targetted

Any comments on the above factors/points? Now, it is your turn now to speak up.

The other day, I was reading an Econsultancy report on “Online Measurement and Strategy Report 2009″.  The report beautifully describes in detail the barriers to an effective online ROI measurement and the current state of the affairs on the subject.  In the following lines,  I am going to list up the barriers mentioned in the report and some possible solutions to overcome these barriers to an effective measurement of your website ROI.

Barriers to an Effective Website ROI Measurement

Here you go.

1. Lack of budget/resources (45%)
2. Lack of strategy (31%)
3. Siloed organization (29%)
4. Lack of understanding (25%)
5. Too much data (18%)
6. Lack of senior management buy-in (18%)
7. Difficulty reconciling data (17%)
8. IT blockages (17%)
9. Lack of trust in analytics (16%)
10. Finding staff (12%)
11. Poor technology (9%)

I was surprised to discover that all the above listed factors (with the only exception of the last one) negatively affecting the measurement of your website ROI are related to non-web analytics tool related activities. They are either related to your strategy, your unwillingness to take any action about the calculation of ROI of your website and/or other external factors.  Only the last one gives just a passing reference (merely 9% of the respondents) to the web analytics technology one uses to measure the website ROI of their web properties.

Some (possible) Solutions to Overcome the Barriers

Let’s take the above barriers one by one and try to find some viable suggestions on how to clear our path to maximize our website ROI.

Lack of Budget/Resources:

Only use the free web analytics tools as the following.  Once you have effectively proved the worth of any of these tools, you will be in a better position to convince your top management to put aside the financial and other necessary resources to start using, more advanced paid tools.

• Google Analytics
• Yahoo Web Analytics
• Clicky (free version available)
• ClickTale
• BT Buckets

Lack of Strategy

What a funny situation! You don’t have a web strategy,  go away and try to look for another job where you don’t have to use Internet at all.  I am serious what I am saying. The companies which don’t have a clear web strategy are doomed to fail today or tomorrow.  To overcome this barrier, try the following.

1:   Just list up the possible outcomes which you want to see from your website within a certain timeframe

2: List up possible ways to achieve these desired outcomes. If you have no clue what those possible ways could be, just surf the Internet and find free forums where you could throw your question. I am pretty much sure someone might be able to give you some nice suggestions just for free, no kidding.

3:  Appoint a person in your company who happens to have at least some interest in website measurement and ask them to spend at least 10% of their time thinking, researching and creating a website measurement strategy. That could be a one person or a team of enthusiastic people trying to make something out of their time in the company.

Siloed Organization

The best way to solve this issue is to start small, show some value to the stakeholders, share the responsibility of measuring their website ROI to more people and/or units.  You could start from IT and move on to SEO, and marketing and sales units.

Lack of Understanding

The Econsultancy report on website ROI measurement was unclear as to what it meant by Lack of Understanding.  In my opinion, there could be two possible scenarios.

One is that you do not  understand the true value of measuring your website ROI. If that is the case, please read this and other blogs discussing this issue extensively. You will soon start appreciating the true value of an effective website ROI measurement strategy.

The other possible scenario could be that maybe, in your management team, there is a lack of understanding about website ROI.  Ask any of your management team to go attend a webinar or a seminar online  or offline workshop which discusses the importance of an effective website ROI measurement.

Too Much Data

The problem with most of the existing web analytics tools is that they provide too much data which is beyond the comprehension of many marketers.  Most often, we are not sure what our real Key Performance Indicators (KPIs) are for our websites.

To handle this issue, select only top three metrics which you and your boss care about the most. The highest priority should be given to the metrics which make the most significant difference in your life as well as in the life of your boss and then his boss. Now just focus on the data which helps you understand the chosen metrics the best way you can and you will be on your way to solving the too much data syndrome.

Lack of Senior Management Buy-in

Did you say that they don’t want to give you the resources and budget to run an effective web analytics report.  Maybe, you were not able to sell your ideas properly due to which their understanding of the importance of web analytics is still poor.

To help you avoid this situation, effectively implement the strategies mentioned in the first point mentioned above and you will be on your way to explaining the importance of website ROI measurement to your boss effectively.

Difficulty Reconciling Data

There is no doubt most of us have difficulty reconciling data from various sources. It’s OK to have discrepency in the data.  In fact,  no two tools will show you the exact same information.  The data collected from these tools should provide you and your management team an indication of the general trends. Your job as a web analyst is to reconcile the data, try to deduce some meaning out of the general patterns and formulate your website ROI strategy.

Lack of Trust in Analytics

There are only two options in this regard.  Either you teach your boss and his boss why having an effective website ROI measurement strategy will help them succeed in their online business or if you can’t do that, just quit your job and look for another one where you can better utilize your time with the people who care more about this than your existing boss does.

Finding Staff:

This is another excuse cited by many marketers as one of the main sources of the problems for their ROI measurement strategy.  Generally speaking, we look for the people who have lots of experience in their relevant fields.  However, for you to be truly successful in the online business, you have to broaden your horizon and actually start hiring even fresh graduates who have knack for web analytics data, have analytical mind and are willing to put their blood and sweat to succeed in whatever they do.

Poor Technology

Come one, give me a break.  Nothing could be further from the truth. Even the free tools like Google Analytics and others will provide you the data sufficient to keep you busy day in and day out.  Technology is evolving real fast. It is your job as a web analyst to keep up with the all the technological developments in your field  and utilize the web analytics tools the best way you can.

I have listed up some barriers to an effective website ROI measurement strategy and some possible solutions to resolve these issues.  Please feel free to comment on these issues to provide further insight on this very important topic of an effective website ROI measurement strategy.

The return on investment (ROI) of a web site is the ratio of money gained or lost on your website verses the amount of money you have spent on the website project in whatever way you did.

Measuring the ROI of a Web site

The ROI of a web site can be measured in a number of ways and for a number of factors. A very abstract description of the factors involved in the ROI of a website are as follows.

• Investment on the website

The question to ask here is where it is that you are spending money. In case of a website, following factors could be counted as the money spent on

• Your search engine marketing initiatives including pay per click campaigns etc.
• search engine optimization efforts whether they be in-house or outsourced
• Direct marketing
• web site development costs
• Email Marketing
• Affiliate Programs
• or any other investment you have made to promote your website in one way or the other

• Return from your website

The outputs or outcomes of your investments on the website project could be as follows.

• Conversion
• Revenue generation
• leads
• Customer satisfaction
• Problem resolution rate etc.

Once you have calculated both the investment and outcomes of your website, you can calculate the ROI of your website by dividing the outcomes by the investment. Calculating the ROI seems to be a simple task.  However, the hardest part in the equation is to help your customers identify the outcome they want to see by investing on your web properties. Once that part is determined, it will be an easy shot to calculate the costs involved on the project.

Improving ROI

There could be so many ways of improving the ROI of a website. However, the first and foremost important step in this regard is to gather data of the visitors who visit your website via any free or paid web analytics tool such as Google Analytics, brutally analyze what what the data says and then make recommendations on how to improve your website so that you can achieve your goals from it.