How to Track Click-Throughs and Sales

If you are marketing via e-mail or other kinds of advertising, you must find ways to track the effectiveness of your marketing—or risk wasting lots to time and money.

Compared to ads in magazines or newspapers, ads on the Internet are extremely trackable. Smart marketers know the effectiveness of their ads precisely. Here's what is usually tracked:

• Click-through rate from ad—the total number of persons who clicked on a hyperlink or URL. The click-through rate tells you how effective the ad is in getting an immediate response.
• Sales from ad—the total number of sales and sales revenue attributable to a particular e-mail or ad. Click-throughs usually have some correspondence to sales, but not always. Sometimes traffic from certain sites or certain ads just don't buy much. You need to know that.

From these pieces of data you can calculate two extremely important metrics:

• Conversion rate—the percentage of click-throughs that result in a sale. Conversion rate tells you the effectiveness of your landing page and sales system. Once you have benchmarked your conversion rate you can now begin incremental changes here and there and track improvements until you've really fine-tuned your system. Conversion rates usually vary from 0.5% to 5% for people browsing your website. But responses to particular e-mail ad campaigns could increase the conversion rate to 5%, 10%, or higher.
• Cost per Sale—A most important metric for any ad campaign is cost per sale. If it costs you $20 to land a $30 sale you'll go broke quickly. But if your ad costs are $5 for a $30 sale, then you're likely to be profitable. This information is vital.

Now that we know the importance of the conversion rate and cost per sale, let's look at the tools at our disposal to measure them.

Types of Ad Tracking

Let's briefly survey the different types of ad tracking before we examine several in detail.

Let's look at each of these tracking technologies one by one.

Traffic analysis of webpages

The most basic kind of tracking counts the number of "hits" (or pageviews) on the landing page to which your e-mail ad directs those who click-through.

Traffic log analysis is usually provided free by your web hosting service, at least at a basic level. For every person who comes to your site, the webserver records in a log file several pieces of information—the IP address of the computer they are using, the webpage URL from which they came, often the search words on a search engine that prompted their visit, their web browser type, etc. Every webpage and graphic on your site that they look at is also recorded.

While the average web hosting service gives you some basic log file analysis, you can also download your log files to your computer and analyze them with a program such as ClickTracks or WebTrends.

You could get the number of page views on your landing page from a simple counter script, though I don't recommend it—it looks pretty unprofessional.

If money is tight, a rather inexpensive approach is to set up a HitBox Personal account (www.hitboxcentral.com) that places a small ad on your site. In exchange for this you learn the number of page views—and lots of other information—about your visitors. If you decide to do this, I recommend that you place the HitBox JavaScript way below your page content using <P>&nbsp;</P> about 6 or 8 times at the bottom of your webpage HTML code.

Using one of these technologies, traffic analysis of your landing page can be accomplished in two ways:

1. A separate landing page URL for each ad, so it can be counted easily, OR
2. A modified URL for each ad.

Let me explain how to set up a tracking URL that can be recorded by traffic logs (though not counters or HitBox Personal).

If your landing page URL is:

http://www.domain.com/sales/landingpg.htm

you could modify it by adding a tracking code after a question mark. Anything after the question mark is ignored by the web browser, but noted by your traffic logs. So for a single landing page you could track responses from several ads or e-mailings:

http://www.domain.com/sales/landingpg.htm?ad78641
http://www.domain.com/sales/landingpg.htm?dre030201

If you send someone to your homepage or a directory, however:

Always include the forward slash after the URL before including the question mark. Some web browsers will get confused otherwise.

Count and redirect scripts

Another approach to counting click-throughs is to employ a count and redirect script.

Your e-mail newsletter includes the URL of the script with a code to identify it. The script counts the click-through and then sends the visitor on to the final destination URL.

An increasing number of hosted listserver programs, such as Topica Email Publisher and AutoResponse Plus, include this feature at no extra charge. They refer to it as "link tracking"

Even if your listserver doesn't offer this feature, you can set up a free link tracking CGI program on your website that can accomplish this.

Ron Woolley’s LnkinLite Perl script
(http://www.dtp-aus.com/cgiscript/lnkinlte.shtml) is freeware that I've used for several years.

Counting click-throughs gives you helpful information about the relative attractiveness and drawing power of your e-mail offer or ad. But it doesn't tell you how many people made a purchase as a result of the ad, nor does it allow you to determine cost per sale.

Separate landing page and SKU for each ad

To get cost per sale and conversion rate information you need to connect click-throughs with the sales they produce. The least expensive way to get this kind of information works in two steps:

1. Use a separate landing page for each e-mail promotion or ad, and track the number of page views for that webpage.
2. Use a separate product identifier or SKU for each landing page and track the number of sales and revenue for that SKU.

When you put together page views with sales you can now calculate the vitally important conversion rate and cost per sale.

Affiliate management software and cookies

If you have a lot of products and promotions, however, building separate webpages and SKUs gets cumbersome. You'll want to get tracking software that uses cookies to identify the source of the link and the resulting sale.

Affiliate management software operates in the same manner and calculates the same kind of data that is needed to track e-mail promotions and any kind of ads you have placed.

Affiliate management software uses cookies, bits of data written to your web browser, that maintain information about navigation through a website. Cookies are used to aid web visitors so they see a banner or pop-up only once, to separate one shopper's shopping cart from another's, to identify a visitor's preferences during his trek through a website, etc.

Affiliate management software uses cookies in this fashion:

1. A potential customer clicks on a coded URL in an e-mail promotion, an ad, or an affiliate link that takes him to a designated landing page on the merchant's website.
2. When the landing page opens, a cookie is placed on the customer's web browser recording the identity of the promotion, ad, or affiliate, and registering a click-through. This cookie typically lasts 3 to 6 months and identifies the source of any sale made within that time unless it is overwritten by another cookie from that merchant.
3. If the customer makes a purchase, he is directed to the Thank You page after the transaction is completed. There, the cookie is read by the affiliate management software program and recorded with the amount of the sale.
4. Affiliate management software keeps a running tally for each promotion, ad, or affiliate of (a) click-throughs generated and (b) sales generated.

Many companies and an increasing number of shopping cart programs offer affiliate management systems. My favorites are Ultimate Affiliate Package and MyAffiliateProgram.

Ultimate Affiliate Package (www.wilsonweb.com/afd/groundbreak.htm) from Groundbreak.com is a Perl CGI program that is installed on your website. There is a one-time $199 licensing fee and an optional installation fee. The upside is that you get a great, functional program at a reasonable price and aren't paying monthly fees, but have product URLs pointing to your own domain name. On the other hand, customer service is spotty and URLs for multiple products can be pretty long. I've used this program successfully for a couple of years.

MyAffiliateProgram (www.wilsonweb.com/afd/myaffiliateprogram.com) from KowaBunga! Technologies is a hosted ASP solution with excellent (and improving) software, great customer service, and reasonable prices. On the downside, the product URLs point to MyAffiliateProgram's domain, not yours, so you don't get a "link popularity" bump from affiliates. Prices range from $395 set-up and $25/month for the Feather Lite version to $795 set-up and $50/month for the Pro version. The Pro version includes a special ad tracking module that separates your ad tracking from your affiliate tracking. It also includes an integrated listserver, Opt-in Pro.

The trickiest part of installing affiliate management software is programming the cookie reading JavaScript on the Thank You page so that it can read and transmit the amount of sale with the ad/promotion/affiliate code. Shopping cart systems construct Thank You pages in a variety of ways, so one set of instructions doesn't fit all carts. I recommend that you ask your affiliate program vendor if its program can be installed successfully with your shopping cart before you commit yourself. You'll probably need some programming help at this point.

Third-party analysis

Another approach is used by HitBox, a Web metrics company with their HitBox Professional 3.0, HitBox Enterprise, and HitBox Commerce products (www.wilsonweb.com/afd/hitboxpro.htm).

A small JavaScript code is placed on key pages throughout a website. The referral URL of a customer is recorded with his IP address from the time he enters the site. If the customer makes a purchase, JavaScript on the Thank You page records both the customer's IP address and the amount of sale, and coordinates it with the referral URL. (Note: Capturing the amount of sale on the Thank You page may take some programming assistance.)

HitBox software can be used to track sales from particular search terms, PPC ads, as well as landing pages throughout one or more websites. It differs from affiliate management software in that it only accurately registers sales made in the same session in which the customer initially came to the site. Customers who return after research to make a purchase will not credit the appropriate ad or search term.

HitBox Professional 3.0 can capture all the information you need to calculate the conversion rate, but it does not do the calculation for you. However, HitBox Commerce (which works in conjunction with HitBox Enterprise) has very sophisticated tables and graphs that illustrate exactly how the conversion process is progressing.

Integrated system

In the e-commerce world of cobbled-together systems from different sources, an integrated system is a rare find for small business budgets. However, a rather powerful system does exist -- 1ShoppingCart (also marketed under the names 1AutomationWiz and Professional Shopping Cart, www.wilsonweb.com/afd/1shoppingcart.htm).

The Basic version ($39 monthly, $349 annually) of 1ShoppingCart includes:

• Ad tracker measures click-throughs, sales, leads, etc.
• Secure shopping cart with real-time UPS, FedEx, USPS shipping calculation, US, Canada, and VAT tax compatible.
• Client database which can be used as the basis of a newsletter
• Autoresponders

The Pro version ($69 monthly, $599 annually) adds digital delivery and licensing, coupons, and an affiliate program.

The ad tracking page shows the following fields for each campaign or ad:

• Campaign Name
• Clicks
• Leads
• Lead to Click Conversion
• Sales Amount
• Number of Sales
• Click to Sale Conversion Rate
• Lead to Sales Conversion Rate
• Visitor Value (in average purchase amount per click)

In addition to 1ShoppingCart you'll need a website where your product descriptions are found, as well as a merchant credit card account and a payment gateway. See my full review in Appendix 1. They offer a 30-day trial for $3.95.