What’s your website worth?

It’s a question on many a finance director’s lips right now – and there are ways of answering it in a language they will understand, says David Bowen.

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What return are you getting on your website? This must be an increasingly frequent enquiry from stressed finance directors over the next months. The request may become more direct: ‘Tell me why I should authorise any more expenditure on a bit of comms that cannot deliver any hard return’. If you are on the wrong end of such questions, what should you say?
This was the theme of a network meeting we held in Amsterdam recently. I can’t go into details, because the meetings are off the record, but it would be fair to say that web managers are more interested than ever in measurement and that some are experimenting with their own schemes. So is Bowen Craggs.
When the web first came along, much of the commercial excitement was in the fact it was a veritable fount of statistics – with website visitors oh-so-trackable compared with any other medium. And so it is for publishers, advertisers and retailers – people who know exactly what they want to measure and do so with great efficiency.
But when we ask managers of corporate sites about web analytics, beads of sweat start to form on their brows. ‘We have an analytics package,’ they mutter. ‘But, tell the truth, we can’t get anything very useful out of it‘. This is a generalisation, but conveys the story well enough.
I think the problem is that the temptation is to take a supply side approach, when it is demand that is relevant. ‘We have masses of statistics, now what can we do with them?’ is the question, when it should be ‘What do we want to find out, and how can we do that?’.
The clue to what you want to find out could lie in my first paragraph, because a preliminary question must be: ‘For whom do you want to find it out?’. If it is the finance director, then you should certainly be aiming for something with a €$£ sign in front of it. If it is the communications director, a non-financial ranking or benchmarking may well work, especially if it includes competitors and, ideally, continues from year to year.

Funnel vision

Applying financial values adds an extra layer of complexity (I’ll come back to that), but the basic ideas behind gathering and analysing data are the same.
The trick is to start with the broad and funnel down to the specific and measurable.
The communications director might want to know how the corporate website is contributing to brandbuilding. Think about the ways the site can do this. It can create an immediate impression when people come to the site – perhaps the way to measure this is to count the number of people who linger on the home page or view your corporate video, or simply to ask them. The first two will come from analytics, the third from an online or some other sort of survey (work out the supply after you have decided the demand).
The finance director might want to know how much money the site is saving the organisation. Obvious examples are the substitution of printed-and-posted annual reports with downloadable ones, and recruits found online rather than through an employment agency. Here analytics data can be combined with costs that are probably measured somewhere in your enterprise.
So, build a set of performance indicators (call them KPIs, if you wish), and work out how to combine them so that you can tell a high-level story. It is well known that senior executives have the attention span of a canary, so put effort into designing a single sheet, delivered regularly, that tells the story nice and simple. You can call this a dashboard if you like the word.
Some indicators will be available monthly while others, such as benchmarks, might come along once a year – no matter, they all add to the picture and build credibility for you and your web estate.

Show me the money

I’ve left the most difficult bit to last. How do you put financial value on the indicators? Some elements are pretty obvious. How much does it cost to send out a printed annual report, how much to provide a PDF version? Adjust to allow for the fact that some downloads will be additional rather than replacement supply of reports, and you can come up with a figure.
But what about the brandbuilding? How do you put a value on people seeing a corporate video? Well, there is a fairly established industry that values people seeing billboards and television commercials – it is called the advertising industry. By using various techniques, it is possible to draw parallels and so put a number on online views. There is another industry that values brands, because they can be counted as assets by quoted companies. Draw on its techniques, too.
The trick is to make the numbers defensible, and that means to go for the most conservative option. Also, declare that the numbers are approximate. The aim, after all, is to convince sceptical finance directors. If you can always say that you have assumed the worst case out of two or three options and that you know the limitations of accuracy, they will – or at least should – be impressed.

First published 26 November, 2008
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