06 March 2007 ~ 4 Comments

Automated Revenue and Profit Lift?

In the wake of Omniture’s acquisition of Touch Clarity, pundits have weighed in on the lofty claims made in the acquisition press release:

Omniture and Touch Clarity have joined forces to enhance online business optimization—bringing together the power of Web analytics and advanced behavioral targeting technology. The combined technology delivers automated revenue and profit uplift to customers derived from Web analytic data.

Consensus has been good deal for Omniture, a great deal for Touch Clarity, and a good deal for the industry at large. But these claims will be tough to make good on.

I mean, c’mon, automated lifts in profits? Actually, this isn’t the part that got me. I tend to think this is a great deal for both Josh James and co. as well as Tim Brown’s crew, and I even buy that Touch plus Omniture will lead to higher conversions in the short term. After all, how could it not?

With the bar being set industry-wide with average Conversion Rates of about 2.4%, doesn’t personalization based on past success have to lead to greater scent, higher relevance to the visitor and, therefore, an increase in conversion, revenue, and profit? Frankly, the bar is set so low, any number of Marketing Optimization toolsets should increase conversion rates above this abysmal benchmark. But if you think these results won’t eventually reach the point of diminishing returns, well, that’s a different story. It’s the difference between measuring success in increments versus multiples.

We’re always looking to ask bigger questions. Here’s a few I’m pondering:

  • Does automating “taking action on analytics data” replace planning for success in advance?
  • Does Behavioral Targeting atop Analytics provide any real analysis, or generate any true customer insights?
  • Is past performance an accurate predictor of success, if the past performance happened by accident?
  • If you optimize cowpaths, how do you know how high the ceiling for ROI can go? (How do you know you’re not simply measuring local maximums?)
  • What value does targeting bring if you don’t understand the motivations driving the visitor’s search, and the angles of approach they take?
  • Who will be taking the time to plan and create intelligently and thoughtfully designed variations.

What we are dealing with here is the Infinite Monkey Theorem.

The infinite monkey theorem states that a monkey hitting keys at random on a typewriter keyboard for an infinite amount of time will almost surely type or create a particular chosen text, such as the complete works of William Shakespeare.

No amount of automated variations produced by a semi intelligent system will produce the results that are ultimately needed, nor can a device that produces a random sequence of letters ad infinitum reproduce Shakespeare.

It was Sam Walton who said “… a computer can tell you down to the last dime what you’ve sold. But it can never tell you how much you could have sold.” Selling and selling online is about people first and machines second. Omniture & TouchClarity are two very juicy pieces of pie together, but it isn’t whole. The missing piece remains the people who might otherwise plan in advance the stories of customer/visitor interactions which must be told in order to produce a conversion masterpiece.

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