Every process, business or company can be considered to contain a list of inputs, transformations / systems (working) and finally the output. Of course all of these operate in a set of external and internal conditions (called environment). This real world phenomena can possibly be represented in mathematical form in terms of flowchart & numbers.

Pictorial and mathematical representation will help in optimization and alignment to the business KPIs. Coming to KPIs, these are set of metrics which measure performance of the business. These are performance metrics that are tracked, measured & monitored on regular basis.

Mathematical models contains an additional loop (feedback loop) in normal flow chart, gets formed from output to system as a feedback of performance. This feedback contains information on what to improve and  other intelligence that is fed back into the system. The feedback can be however not necessarily limited to effectiveness and efficiency of the system. First is the ability of the system to meet the desired output/ objectives. Second is the relationship between input and output, measure of how good is the relationship.

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Users must understand that all mathematical models will only help support a decision or help solve a problem. At the time of decision making a knowledge worker generally has one or more alternatives to solve the problem. A list of feasible solutions will need to be chalked out from all possible solutions. The best solution or optimum solution to be derived from the list of feasible solutions again based on criteria such as profitability, cost, response etc.

The idea of this blog posts and future blog posts is to identify problems in web based business and how analytics can help solve it?

Blogging and Blogs

You have a small blog and spend considerable amount of time updating it, also have spent some money in creating and putting it up live. Measuring the success of a blog is not just pageviews, subscribers and unique visitors count.

ROI of a popular blog can be huge, if you have rich content and have active RSS subscribers. You don’t need a resume. Every popular blogger gets job offers regularly flowing into his email. Above this you have created a brand for yourself. This is a huge economical benefit considering the money and time you spend on make your blog active. If you have a great blog then you have separate brand and identity for yourself.

Small Scale Business Online

Concentrating on search engine marketing, seo, affiliate marketing to generate profitable visitors to site is fruitful. This is the cheapest form of advertising online. You have control over spends and will be able to monitor your ROI. Set up Google Analytics or any other analytics tool which will help you look at the visitor information.

Conversion University from google is very helpful in optimizing the website for higher conversions and sales (http://www.google.com/support/conversionuniversity/bin/answer.py?answer=77123)

Small scale business must focus their marketing efforts cleverly around geo-locations to get maximum return from marketing & advertising. The site must clearly offer maximum benefit & response to their end users as promised in their USP. Most sites initially work on small set of customer base and keep them satisfied at all circumstances.

These companies are ecommerce sites, shopping sites, travel agent sites that are looking to sell products to their websites’ visitors. They should target at long term steady and consistent growth not looking to achieve instant traffic hoping to dramatically increase page-views and visitor count hoping make revenue quickly and grow faster.

Large Businesses Online

There are various large online website who advertise heavily online & offline for the purpose of promotion. The spend a big amount of money with an objective to increase visitors, page views hoping to increase brand value. It is unwise to spend money on marketing, advertising without looking at the actual value it adds to their users (customers).

Increase in page views and visitors may not proportionally be related to increase in revenue and profit. There are definitely smarter ways to reduce cost of marketing & advertising without impacting the bottomline.

I read about many large advertisers in US & worldwide who have decreased spends on search marketing as it has become unprofitable after a certain limit. They have found search engine optimization, social media marketing ways more effective to gain relevant traffic to their websites for increasing their sales.

Measuring ROI through every channel and making them profitable is very essential and must be the key factor

EXAMPLE:

The traffic to my blog has constant traffic from social media sites like stumbleupon and other social network sites. Few days it has huge spikes of about 2000 hits in a day from stumbleupon alone, totally free traffic.

Blog attracts about 16% of overall traffic from social media sites of which 48% contribution is from Stumbleupon alone.

The cost of promotion on stumbleupon is consuming few hours of time in writing rich useful content and building a network of bloggers, friends & general users. Comparing this with search marketing campaigns, same amount of traffic might have costed me few thousand dollars.

Never be afraid to use new format of media, content for promotions such as Videos, Apps, Images, podcast, audio files, flash files etc. It is just a new form of content by the underlining principle of promotion remains the same.

Reading:

Measuring ROI from SEO : http://searchenginewatch.com/showPage.html?page=3625973

Measuring ROI from Social Media Marketing: http://www.pronetadvertising.com/articles/measuring-the-roi-from-social-media-marketing.html
This Article is originally found on http://www.praveenkodur.com/blog/