As a business, knowledge of the marketplace is important. For a business to be successful in today’s number-driven world, understanding marketplace analytics is crucial. Here are 5 Things You Should Know About Marketplace Analytics.
Key Performance Indicators
Key performance indicators refer to the immediate visualization of several key metrics. All of which are used to measure the aspects of a marketplace in order to properly manage it.
These metrics should be used to influence all decisions made thereafter, allowing analyzers to conduct changes to the platform. These changes done with knowledge from the key performance indicators should allow more value to be generated over time.
There are two main financial metrics that should be kept in mind when performing marketplace analytics, ad spend and sales. The measurement of these metrics can help chart a growth course for the marketplace.
Ad spend can be divided into two categories, digital and non-digital ad spend. When referring to marketplaces the focus will be on digital ad spend most of the time, with non-digital ad spending only being considered when a more robust insight into costs is needed.
Sales metrics refer to the number of units sold on the platform multiplied by the sale price of each unit. Evaluation of these metrics can be adjusted to a period that feels most comfortable for each analyzer.
Marketing metrics are indicators of payment from the marketplace and once money is being spent on the marketplace, payment is done based on impressions and clicks. These metrics are not actionable and are supplemented by marketing efficiency metrics, which are actionable.
The main purpose of marketing metrics is to help analysts understand the landscape of the marketplace and devise actionable plans for further growth. The metrics to be focused on are determined by your most important business goals.
Marketing efficiency metrics are important as when interpreted correctly, allow for you to allocate and adjust your spending to be as efficient as your optimal desired scale. The first metric is return on advertising spend, which allows for a company to analyze the results generated by investment spent on advertising.
The second metric of note is cost per thousand which refers to the amount spent on digital impressions grouped into thousands, which allows a company to gain insight into the progress of a brand awareness campaign. The third metric is cost per click which refers to a form of advertising where a company only pays for clicks and relates to the click-through rate which quantifies search intent.
The fourth metric is cost per acquisition which refers to your conversions in business and the fifth is conversion rate, which refers to the value people place in a product or advertisement. The last metric is search impression share, which is the impression count divided by the potential impression count, which means that the higher it is, the higher your business can scale when compared to others.
User Satisfaction Metrics
User satisfaction metrics are unique when compared to the others as they cannot be automatically measured. It is collected from users of your product via surveys and user groups.
These are generally unstructured, making them difficult for any company to quantify. However, certain actionable metrics can be observed in order to determine the state of your company.
The first metric is net promoter score, which refers to how likely the user would recommend your product to others, be it a family or friends. This is measured through scores of net promoter score with a positive score being great.
The second metric is the Sean Ellis Test, where users are asked about their feelings if they are unable to access the marketplace further. Scores should be measured as a low score is a strong indicator that a change is needed in the marketplace for it to grow further.