When I am analyzing an online ecosystem, I create a series of logistic regression models that predict next-month visitation within online advertising channels.
What is interesting about the equations is that customers exhibit behavior that is far more consistent than what you're taught to believe. You're taught that customers "do everything". Once you are taught that customers "do everything", you're taught that you must use attribution algorithms to parse out the activity that leads to a purchase.
In a recent project, more than half of visitors had just one daily interaction with the website. When predicting what should happen the next month, the models indicated that customers are far more likely to stay within the advertising channel they were in the month prior ... in other words, when a customer visits via an affiliate last month, we can expect that customer to visit via direct load next month, with a scattering of visits across all other advertising channels.
The projects consistently point out three things.
- Direct Load visitation is most important, and obviously, most cost effective. Most visitors, even toll-based visitors, migrate back to direct load over time.
- Push-based visitation (email) is second most important - and obviously.
- Toll-based visitation (catalogs, affiliates, remarketing, Facebook, search/Google) matters, and ultimately pushes a customer to direct load over time.
The projects also point out a consistent trend, over time.
- Early customer life cycle visits are skewed to toll-based channels.
- Later customer life cycle visits are skewed to push-based (email) and direct load (customer loyalty) visits.
The projects also illustrate that discount/promo centric companies drive more toll-based traffic ... imposing a double-toll on the business (pay an affiliate, generate less profit because of the discount/promo).
The interesting thing about all this stuff is that the vast majority of what we read in trade journals or from vendors focuses on toll-based traffic that converts via discounts/promotions. The vast majority of quality profit we generate comes from direct load (customer loyalty) and email push-based visits.
Yes vendors, I hear you yelling at me from afar ... "you're wrong, and I'm going to tell you why". Go ahead and run the monthly ecosystem models I'm running, and see if you can see something similar in your information.
Contact me (email@example.com) for your own, customized, online ecosystem analysis.