May 31, 2008

Great Moments In Database Marketing #4: Interpolating Iowa

We go back to 1989 in the great State of Iowa, for this Great Moment in Database Marketing.

Iowa was a state burgeoning with opportunity in 1989. Kevin Costner was filming "Field of Dreams". And the Iowa State Fair boasted the World's Largest Pig.

At The Garst Seed Company, a little-known Statistical Analyst named Kevin Hillstrom was working on measuring corn hybrid performance in Iowa.

One might think that corn grows well in Iowa. But there are subtle differences in performance by geography. We executed numerous tests across the state, trying to understand which hybrids performed best across various geographies.

We used a tool called "linear interpolation". In essence, if you didn't conduct a test for a hybrid near Mason City, IA, you "interpolated" the results of the test, based on surrounding test plots North, South, East, and West of Mason City. You "averaged" the performance based on surrounding tests.

Interpolation yielded beautiful three-dimensional maps of Iowa (or any other state), with high terrain representing high yields, and valleys representing poor yields.

Fast forward to 2008. Our "on demand" world of rapid metrics gives us an endless array of fascinating insight into online customer behavior.

What Web Analytics fails to give us is interpolation.

Look at the following pair of tables, measuring conversion rate by prior visits to the website, and by depth of visit into the website (an "x" means there isn't enough data to obtain a valid estimate).

Before Interpolation

Visit Depth
Visits One Two Three Four Five+
One 1.0% x 5.0% 4.0% x
Two x 6.0% x x x
Three x x 7.0% x 4.0%
Four 3.0% 4.0% 6.0% x x
Five+ 2.0% x x 7.0% 6.0%

After Interpolation

Visit Depth
Visits One Two Three Four Five+
One 1.0% 3.0% 5.0% 4.0% 3.0%
Two 2.5% 6.0% 7.5% 6.0% 3.5%
Three 2.8% 5.0% 7.0% 6.0% 4.0%
Four 3.0% 4.0% 6.0% 6.5% 5.0%
Five+ 2.0% 3.0% 6.0% 7.0% 6.0%

Interpolation helps one visualize the peaks and valleys inherent in all of our data. In this case, the Web Analytics experts observes optimal conversion among customers with modest number of visits and modest amount of site depth. Folks visiting only once but browsing deep into the site do not convert at a high rate. Folks visiting the site often, but only viewing the home page, do not convert at a high rate.

It's been a theme across this series. Just because we have instant access to hundreds of on-demand metrics in our Web Analytics package doesn't mean we have genuine insight into how our customers behave --- we simply have a lot of metrics! There is an art to transforming incomplete data into a compelling and actionable story. Interpolation is one of the tools that can be used to tell the story.

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