Conversion optimization is a massive, critical, and fast-growing part of marketing tech, according to a new VB Insight study of almost 3,000 marketing technologists.
The most surprising part?
Of the 36 conversion optimization tools and companies studied, only two failed to generate substantial return on investment. And of the 2,938 marketers we surveyed, only five percent did not generate ROI. Average ROI was 223.7% — but 173 of the marketers we surveyed had enviable returns of over 1,000%.
Conversion rate optimization is the process by which performance marketers improve on desired actions — such as clicks on an offer, opens of an email, downloads of an app, or purchases in a store. Any action that can be measured can, theoretically, be optimized. And the huge returns marketers can realize by regular incremental improvement are massive … which is why companies are spending up to $2,000 a month, at the high end, on optimization tools.
Above: Average spending on CRO tools. Image Credit: VB Insight
But how are some marketers generating those stellar thousand-percent ROI numbers? Report author Stewart Rogers explained:
If you can double your conversion rate, you halve your customer acquisition cost. If each customer has a lifetime value of $1,000, and doubling your conversion rate leads to an additional 200 customers per year, the return on investment of your CRO tool is a whopping $200,000 return from a $6,000 spend.
That’s not typical, he hastened to add, but it serves to illustrate both the attraction and the magic of conversion rate optimization tools.
The most popular CRO tool in the world, Rogers said, is Google Analytics. In fact, 73% of marketers use Google Analytics — almost 250% more than any other tool — which is both good and bad.
“GA is ridiculously popular. It is free, powerful, and gives you almost instant feedback on how changes to your website affect key metrics,” Rogers said. “The issue with GA is that it only reports conversion indicators and data — it doesn’t help you make the changes, serve different versions of web pages to different audiences, test email subject lines, or work out the best combination of messaging and graphics on a landing page.”
And that’s the key difference. Of the tools that don’t just report data but actually allow you to effect change, Adobe’s Omniture leads the pack:
Above: Penetration of top conversion optimization solutions. Image Credit: VB Insight.
That said, overall penetration among the “Fortune 30 million” is low.
According to our analysis of three million U.S. websites, using data provided by Orb Intelligence, CRO-specific tools have only 2.93% penetration. Of course, when you expand the definition to any tools marketers use for CRO, including reporting, then Google Analytics’ massive 59.96% market share bumps the average significantly.
The question is, of course, which tools are best?
“Optimizely continues to shine for A/B split testing,” Rogers said. “If you’re a small business and can stay within its free tier, it makes complete sense to stick with Optimizely as the product of choice, using GA and other measurement tools like Crazy Egg to see the results. But once you go above the free tier freshhold, it can get expensive. Of all the tools analyzed and studied, Visual Website Optimizer stands out as a real contender, and it also offers a more comprehensive multivariate testing capability.”
With such a vast array of vendors, it’s challenging to pick the best. Rogers did however manage to select VB Insight “best bets” in five categories, which are further split according to the size of business:
- A/B split testing
- Multivariate testing
- Website, funnel, and mobile analytics
- User feedback, expert panels, concept testing, and surveys
Best bets in the first category, A/B split testing, include Optimizely, Visual Website Optimizer, and Unbounce for small and medium-size businesses, with Maxymizer and Qubit joining Optimizely for larger enterprises. Maxymizer, in fact, scored a perfect 100 out of 100 from users.
For the fourth category — website, funnel, and mobile analytics — Omniture, Mixpanel, and Google Analytics hold down the top spots.
I asked Rogers why there are so many CRO tools, and why they’re growing so rapidly.
“The simple answer is that CRO is, in reality, the business of creating return for free,” Rogers replied. “Other than the cost of the tool, CRO is about taking existing traffic and improving conversions from it, rather than buying more traffic through advertising. It is much cheaper to optimize 2,000 visits per day and increase the conversion percentage from 10% to 20% than it is to buy an extra 2,000 visits.”
The entire report is available on VB Insight. This article was written by John Koetsier for VentureBeat and was legally licensed through the NewsCred publisher network.
Originally published on Mar 19, 2015 3:55 PM