I don’t do predictions so I thought I’d give you some tips, whether you’re in e-commerce, the lead generation business or the media advertising business.

If I could only do 5 things using Analytics for my business in 2010 these would be the first things I’d do.

1. Measure segmented outcomes. In e-commerce it’s easy, measure conversion rates to sale across your different traffic sources. With lead generation measure conversion rates of how many people sign up to hear more about your services. With the media business the outcome might be the amount of heavily engaged visitors. Those that stay on your sites longest and see the most pages are able to see more adverts. By segmenting you’re able to determine the traffic sources to concentrate on (the one that drives the most outcomes).
2. Do statistical analysis. By doing statistical analysis you can pinpoint where you should look. It shows you where the “abnormal” trends are. A couple of years ago I wrote about a method to do this so rather than repeat it here, Google Analytics also does this for you now (their intelligence feature) so if you use GA make sure you start there.
3. Measure segmented bounce/exit/abandonment rates. As a place to start monetizing your potential. These metrics indicate people who haven’t found what they wanted. In all three sectors you have different reasons for not wanting this to happen. In e-commerce sites you don’t close the sale if the abandon from your shopping cart process. In Lead generation sites you don’t get the lead if they exit from your form sign up page. In Media sites it’s not ideal from your revenue perspective as 1 page visits (especially) don’t add up to many advertising Euros. Segment here again to find the worst sources of traffic so you can see if it’s worth eliminating them or changing your content/processes to reflect what people want.
4. Include other data sources. You don’t live in a vacuum, your competitors might be the reason your conversion rate is low if you’re in e-commerce. What if they sell the same product you do at half your prices with twice your shipping speed? If you’re in the lead generation business check out whether you are outperforming your competition. You may be driving 20% more traffic (and thus getting 20% more leads) than last year which is a result but only if you outperform the rest of your market. If you’re in media advertising well you need external numbers to compare how well your competitors are driving traffic so you can put your own traffic into context.
5. Monetize, Monetize, Monetize. we should monetize everything we can. In e-commerce it’s very easy, improving conversion = €xxx,xxx similarly with lead generation any improvement in exit/bounce/abandonment translates to potential value. With media sites you either cut your costs, increase your traffic or get more engaged traffic. Increased traffic or more engaged traffic means more advertising can be sold thus increasing revenue.

A research firm that tears down electronics products says Google’s Nexus One has “the most advanced features of any smartphone ever dissected” by it. iSuppli said it has examined several smartphones including Apple’s iPhone.

iSuppli estimates that the cost of hardware components in the Nexus One [its Bill of Materials (BOM)] totals $174.15. In addition to the Snapdragon, the Nexus One features Broadcom’s BCM4329 chip, which integrates 802.11n, Wi-Fi- Bluetooth and FM technologies. The mobile phone also includes Synaptics Inc.’s ClearPad 2000 capacitive touch screen sensor. The teardown estimate did not include expenses beyond hardware, such as software, manufacturing cost, accessories or royalties.

Unlocked, the Nexus One handset sells for $530. New T-Mobile customers can buy it for $179 when they commit to a data plan.

Materials to build the Apple 3GS cost $179, iSuppli reported in June. The 3GS sells for $199 with a data plan or $599 unlocked.

The Nexus One appears to be attracting new commitments from suppliers and from Google itself. Google’s Andy Rubin, who leads the search company’s mobile phone operation, said at the Consumer Electronics Show last week that the company’s next handset will be aimed at enterprise users. According to media reports, it may have a physical keyboard.

Also at the CES event, Qualcomm’s chief executive Paul Jacobs said his firm expects to support Google’s Chrome operating system. Chrome would likely be a good fit for the two firms, because Qualcomm’s speedy 1 GHz Snapdragon processor is the hardware heart of the Nexus One.

The Snapdragon, said iSupply, gives the Nexus One “processing muscle — most notably high-definition 720p video playback.” iSuppli noted that the Snapdragon is already being used in Toshiba’s TGO1, but added that the Nexus One’s 2.1 Android operating system is particularly well suited to use the processor’s fast performance.

The market research firm also cited the Nexus One for its “signature” 3.7-inch AM-OLED display.

The market research firm also cited the Nexus One for its “signature” 3.7-inch AM-OLED display.

“With the Nexus One, Google has taken the most advanced features seen in recent smart phone designs and wrapped them up into a single sleek design,” said iSuppli’s Kevin Keller, in a statement. “This gives the Nexus One the most advanced features of any smart phone ever dissected by iSuppli’s Teardown Analysis Service — a remarkable feat given the product’s BOM is similar to comparable products introduced during the past year.”

“Why are we buying our brand keyword when we already rank #1 in the organic results?” “Why are we paying for traffic if we’re already getting it for free?” It turns out that the question isn’t whether or not you should be buying your brand keywords. The question is how much should you be willing to pay for that ad, and what should it say.

For search marketers like me (and probably you), the question of how to balance the paid/organic dynamic has been around for years. So why is there such an amazing dearth of good information on this topic? Why isn’t there any kind of industry-accepted framework with which to address the age-old question?

I believe that the reason is that the conversation around the interaction between paid and organic search has historically been sorely lacking any good data. As a result, we get stuck talking about opinions and assumptions, and we typically don’t come to any meaningful conclusions. I am grateful that at this point in my career, I am surrounded by savvy marketers who understand how search results pages (SERPs) work. They understand that the SERP is a complex landscape, that each link has its own clickthrough rate (CTR), and that any link’s CTR is affected by the other links with which it shares the SERP. This is the path to meaningful dialogue on the subject, so I encourage everyone to get intimately familiar with the data around the paid/organic dynamic.

So how do we look at the data in a way that can help us understand this phenomenon? First let’s get a few ground rules straight:

• What keywords are we really talking about? Those that match exactly with your brand name or branded product name, where there is generally no competition. So if you are the Acme Widget Company we would be talking about keywords like “acme” and potentially “acme widget.”

• What are we actually trying to compare? Ultimately we want to compare two different conditions: a) a SERP where the organic link for brand keyword is ranked #1 with no PPC ad (and no competitors’ ads) present and b) a SERP where the organic link for a brand keyword is ranked #1 with a #1 rank PPC ad (and no competitors’ ads).

• What phenomena are we trying to measure? In the above cases there are two things that normally happen. I call them cannibalization and lift. “Lift” is the net amount of traffic that is added to the mix by virtue of the PPC ad. Cannibalization is the portion of PPC ad traffic that comes at the expense of the organic link. If you can quantify cannibalization and lift in any situation, you can then begin to think intelligently about what to do.

One thing we need to also acknowledge is the fact that the many variables affecting paid and organic search traffic—search volume, page layout, keyword bids and rankings—prevent us from doing any rigorous scientific testing around the paid/organic dynamic. It’s simply impossible to isolate all the variables necessary to completely understand what’s going on. However, there are some terrific ways that you can at least gather some meaningful data that can be interpreted and analyzed, and from which we can actually draw very useful and actionable conclusions.

Next, let’s agree on a few basic principles:

• Internet (and search) traffic patterns move in weekly cycles.
• Search volume is affected by seasonality, media and other factors.
• You’ll want to “test” in a period of minimum volatility (avoid holidays and seasonal peaks and dips if possible).

Now, consider the following approaches to gather the data required to quantify cannibalization and lift:

• On/off weekly: Pause your paid ads for one week and then resume. This is the simplest approach and takes the least amount of time. If you have more time, try alternating weeks as long as you need.
• On/off daily: For a two week period, alternate pausing and activating your paid ads on consecutive days. Why two weeks? This is the minimum duration required to get both “on” and “off” data for each day of the week.

These are just examples. Use your imagination to design something more elegant if you have more time or budget.

Now What?

Now, you need to gather your data and estimate your lift and cannibalization. The incredibly tricky (and potentially inaccurate) part of this is trying to establish a baseline for organic traffic. Naturally, you will want to use the organic traffic during “off” periods as a baseline, but what about the “on” periods? What would the organic traffic have been without the paid ads present? For this you will need a third data point. Either use averages of organic traffic during “off” periods that bookend an “on” period, or if you have access to data like search volume for a given keyword, you can use this trend to estimate what your organic baseline should be.

The key here is to come up with an approximation for cannibalization and lift. It doesn’t have to be perfect, because you’re going to use this data to determine, based on your business goals, what you should be willing to pay for a click on your PPC ad. Here’s an example:

Let’s use a day’s worth of data, and suppose we determine that our organic baseline traffic is 100 clicks. When we add a PPC ad, that ad provides us with 100 clicks, but when we do so, our total organic+paid total is only 180 clicks. That means that of the 100 PPC clicks we bought, 80 were “lift”, and the other 20 were “cannibalization.” Then, all other things being equal, you should discount your maximum allowable CPC on your brand keyword by 20% to account for the cannibalization, and adjust your bids accordingly. Make sense?

Finally let’s look at the extremes. If your PPC traffic is 100% lift, then you can confidently say that buying your brand terms is absolutely justified, and you have the data to prove it. What, then, if all your PPC traffic is cannibalized organic traffic? If that’s the case, then you had better have an incredibly good reason for paying for the PPC ads. One reason might be that you want to put a differentiated message in front of people, a message that’s not reflected in your organic link. Possible reasons for this might be a brand re-launch or a strategic event like an important product launch or corporate milestone.

Sorry for the poor communication – not the scanning

Everyone has a bad day.  It’s possible for even the most successful companies or individuals to miss the mark.  Someday, Pixar will make a movie that is merely average instead of great.  Some time in the future we might see Lebron James brick a ton of shots in one night.  And it’s even hypothetically possible that Google might tinker with their product a little too much.

Heck… might have happened already.

Exactly what are they smoking over at Google?  Screenshots are starting to pop up here and there of the new Google UI (User Interface).  Now, they’ve been testing this since at least November, when Danny Sullivan wrote about it.  But now there are rumors that it’s out there in the wild for some users.  Here’s a look at a screenshot of the new UI this morning (followed by a shot of the current live result of the same query for comparison):

(You can go here for instructions on how to activate this new UI for yourself).

Now, I understand the drive to improve your product and user experience.  Heck, if Google wasn’t trying to improve and just kept the status quo we’d be ripping them for inaction and they might even start to suffer market share loss.

But there’s a thin line between “improving the UI” and “mucking it all up with flashy things.”

Maybe I’m going a bit overboard with the negativity-tinged sarcasm… I’ve been known to do that.

So let’s break down the new UI a tiny bit and see what’s different or new:

1. The search button is blue.

Why?  Were users confused by the former (grey) button?  Were users showing behavior indicating they needed the button to stand out more or be more patriotic?    A button color change just feels silly—like something a more immature, less established engine might do.  If people don’t know how to find and click the buttons on Google, I humbly submit they aren’t worthy of using the engine in the first place.

But hey, I’m sure they have research and data that suggests a blue button is better.  Someone probably got paid a lot of money to pump out a 40-page document on the effectiveness of button color changes.

The “Google Search” and “I’m Feelin’ Lucky” buttons on the home page are also blue with white text.

2. The search options on the left are now permanently open.

This is the part that everyone’s saying makes the new UI a bit of a Bing clone.  And guess what… it feels like Bing.

And why do we need all the search type options twice?  Look down the left sidebar, and you’ll see some familiar faces:  videos, news, images, books, blogs, etc.  Yes, those same options you’ve always had up at the top of the screen—hey look… they’re still up there too!  Twice the chance you’ll find them.  (The new ones on the left have bright colors, though, and nifty little icons to help them stand out).

We now have a three column layout for Google results.  One for options, one for ads, and… oh yeah… that one in the center for actual results.  The whole thing feels cluttered.  Like Robert Yang implied over at e-storm, it feels like Bing and Yahoo mashed together with the old Google.

3. The outline of the search box is now a blue line instead of a grey one.

I wonder if they got some focus group data that showed them that blue is the new grey?

4. There is no longer a space between the search field and the search button.

Phew.  I’ve been wondering for years when they were going to remove that nagging space.  It was really bothering me.  Glad they finally did that.  The three millimeters of real estate will come in handy.  (sarcasm, for those not picking up on it)

5. The Google logo is now larger.

Not sure I have any feeling about this either way, other than the general rule I have that you never make the logo bigger just for the heck of it.

There are a bunch of other tiny changes that probably aren’t worth mentioning (the total number of results and the time it took the search to complete are now directly to the right of the search field instead of slightly below it on the right side… that kind of thing).  But all in all, I see them fixing a lot of little things that didn’t appear to be broken, with the end result being something that feels… almost un-Google-like.  That’s not necessarily a bad thing.  Change is good, in general.  But it seems to be their biggest step yet outside of the classic look and feel of the results.  As with all UI changes, time will tell if these were good or bad, and the users will be the ones to determine that.  I’ll try and remember to check back in on this down the line for a follow-up story.

The sad fact, though, is that I’m completely biased.  I have spent and will continue to spend much more time on Google’s results pages than the average user.  It’s part of what I do for a living.  So maybe I’m not objective when it comes to the blue button or the three-panel layout.  Perhaps the general population finds these things more useful and helpful than I do. I’m certainly not an engineer.  I have no experience whatsoever in tweaking the UI of the world’s largest website.  It’s entirely possible that these changes will result in more users or happier users (or both).  I’m alright with that.

At the very least, you have to applaud Google’s willingness to try new things (even if those new things are slightly borrowed from competitors).  A less-driven company would simply rest on the laurels of what’s already proven to work.  But from my position, they’ve gone a tad bit overboard with this round of changes.  Anything that makes Google feel more like a Microsoft product is possibly a step too far.  But what do I know?