Acquisition, Optimization, and The Great Divide.

30 Jul

Estimated read time: 4min

What’s in it for you: You’ll see the big divide in spend for acquisition/optimization and where the huge opportunities are.

Our company recently had a brainstorm session. One of my colleagues @DinaHolland showed us this slide and I think everyone’s jaw dropped.

Check this out.  According to the survey, for every $92 spent in online acquisition (paid search, banners, etc), companies spend $1 for optimization! Holy Kaw.

Let me put this in perspective for normal folks. Lets think about this situation from a clothing retail store in the mall. Lets say I own a boutique clothing store. I worked my butt off to get the store off the ground. Legal paperwork, staffing, finding the money to fund the space and operation, etc.

Now, I have given myself $5,000 to spend on marketing. That includes any materials like flyers, PR, direct mail, and employee costs involved.

Based on the above chart, out of $5k, I’m going to spend $4,946 on materials and labor to get people to come into my store. (This guys is a slacker! Checking his phone.)

I’m then going to spend $54 on making sure the store looks good so potential customers will be impressed when they walk through my door.

Obviously this is ridiculous. Nobody would do something like the above for a retail store. Right? Seems crazy dumb… but then again we’ve all encountered some dumb people.

Regardless, the retail store scenario is absurd and would most likely not happen. According to the Omniture survey, the above scenario is the acquisition /optimization spend ratio landscape. Companies are so obsessed with paying for traffic with PPC, display, SMM, etc that they completely overlook the important piece of optimizing the conversion path once the user gets to their site.

Traffic is important. Experience is important.

If your landing pages or conversion paths are not constantly being tested and optimized, you’re going to miss out big time.

The video below is my kid. This is what I think of online marketers who fail to optimize beyond the traffic. They’re just guessing their customer experience.

With the retail store example, there can be many things to test out – maybe putting the sales rack to the front of the store, reducing the amount of clothes on display, putting the women’s clothing to the left side, etc.

Don’t be like my kid with the bucket on his head. So many opportunities to increase conversions by optimizing the site experience!

Takeaway: Think about your acquisition to optimization spend ratio and really ask yourself if it’s balanced.

Mazel tov!

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*Omniture Conversion Optimization Benchmark Survey, July 2009

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The posts here are my opinion. I hope you found it helpful or at least fun to read. My passion is in web analytics, A/B testing, MVT, LPO, CRO, etc. All things related to driving more conversions for you buck!
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2 Responses to “Acquisition, Optimization, and The Great Divide.”

  1. Dan London July 30, 2010 at 2:52 pm #

    Great post.

    On the flip side, It is amazing how much money is spent on a website without taking web traffic into consideration. Designers tend to make sites that look pretty and fail to craft any SEO into the design. It would be like the best looking and designed store in Chapel Hill being hidden behind the Cave in that sketchy alley with no sign. There has to be a malleable cohesion between design and marketing.

    • Naoshi July 30, 2010 at 2:59 pm #

      Great point! SEO optimized creative is a big missed opportunity as well.

      Yea. You definitely don’t want to be behind the Cave in CH.

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