Assign Values and Know Where Your Bottom Line Stands
Assigning values in the context of analytics is essentially about measuring the number of conversions. It is very important from the point of view of the publisher because the revenue received is based on the number of conversions. Just as important for the advertiser because assigning values helps to keep tabs on revenue stream. One way of objectively measuring this is by assigning values to conversions.
This involves three simple steps:
1. Specify a name that you will recognize when viewing the goals within each set of your reports. Example: "email sign-up", newsletter sign-up, or "article ABC download."
2. Identify up to ten pages in a defined funnel. Funnels are optional, but defining one shows you where visitors drop off during the path to completing a goal.
3. Assign a value for the goal. Google Analytics uses an assigned goal value to calculate ROI, per visit goal value and other important metrics. A good way to value a goal is to evaluate how often the visitors who reach the goal become customers. For example, if you are able to close 10% of your prospects/leads that are generated via your contact us page and your average transaction is $500, then you might assign $50 (i.e. 10% of $500) to your "Contact Me" goal. In contrast, if only 1% of mailing list signups result in a sale, you might only assign $5 to your "email sign-up" goal.
Web analytics allow you to define a dollar value to any goal you define. When you do not assign goal values then you are omitting key data. Goal values give a holistic view of which traffic sources perform the best. Some common examples of defining goals are lead generation forms or purchased products. Secondary goals could be posting a comment or entering a contest.
You can then measure the real performance of traffic coming to your site by using the goal conversion rate, which essentially treats all goals equally by adjusting the weight for each goal against the per visit goal value. You may discover that your email campaigns have a higher conversion rate compared to your PPC campaigns but a lower per visit goal value.
In the case of pay per click (PPC) campaigns, goal values can help you determine the true value of each active campaign. Comparing revenue per click against cost per click is essential information for determining how to best optimize your PPC spending. You could be under spending on a PPC campaign that has a low average conversion rate but high revenue per click and, vice versa, over spending on a PPC campaign that has a high average conversion rate but low revenue per click, and you wouldn't know unless you actually assign goal values.
Above all, assigning values helps you to showcase the dollar value of your site to the website's stakeholders. There's no value in saying, Our site has 355 newsletter signups, 260 comments, 20 leads generated from submissions, 900 social shares, 76 RSS subscriptions, and 286 account registrations. The true value is in saying all this, and adding the all-important rider: ....This represents $50,000 in value to our business, up 20% from last month.