How well do you know your digital analytics?

In just a few years, the Google Analytics tool has gone from being “just another toolbox” for businesses to an integral part of understanding customers and industry trends.

How well do you know your data? What do the calculations really mean, and how might they deliver for your business? Read on, then take the quiz to test your knowledge.

At a glance

  • Google Analytics is an important tool in understanding customers and industry trends.
  • Despite better access to data, many managers and senior executives struggle to turn it into useful insights for decision-making.
  • Businesses need a strong, top-down culture of analytics if they hope to mine data to guide business decisions and drive growth.

We are living in the age of data. Everyone – from marketers to business leaders – is looking at data to reduce the need for decisions based on intuition or historical behaviour. Big data trends in cloud computing, machine learning, the Internet of Things (IoT) and marketing analytics have become boardroom (and dinner table) staples.

Australia takes data seriously. According to the 2014 Deciding with Data report produced by PwC Australia, data-driven innovation has increased Australians’ ability to understand the world and solve problems, create efficiencies and invent new products. It has added an estimated A$67 billion in new value to the Australian economy.

According to BuiltWith Trends, 92 per cent of websites in Australia use Google Analytics to gather powerful business insights. In just a few years, this marketing analytics tool has gone from being “just another toolbox” for businesses, to an integral part of understanding customers and industry trends. Its comprehensive A, B, C reporting – acquisition, behaviour and conversions – provides a deeper understanding of customers (such as age, location and devices), their behaviour (how they find, interact with and leave a website or app) and conversions (their actions on a site).

These insights can be used to get in front of customers through Google Ads, which helps businesses create advertisements to promote their products or services across Google Search, YouTube and Google’s network of partner websites and apps. For instance, if you see more users browse your website from a particular city, you might decide to increase your ad spend for that location.

Making sense of all that data

Paul Muret, vice president of display, video and analytics at Google, and Neil Perkins, founder of Only Dead Fish, attend Organising the World’s Marketing Information at Advertising Week Europe, 2016.

A 2017 Data & Analytics report by MIT Sloan Management Review and SAS found that analytics is now a mainstream idea, but not a mainstream practice. There is better access to data, but most managers and senior executives struggle to turn this data into useful insights to make informed business decisions.

Sabri Suby, CEO of direct marketing agency King Kong, says when people look at analytics data, they only look at top-line numbers, not tangible metrics.

“When you’re looking at your business, you need to fundamentally understand what people are engaging with,” he says. “How much traffic are you getting? How many leads are you getting for each service?

“You also need to look further to see behavioural data. For example, how much is your time on site changing? How much traffic are you getting from mobile versus desktop?

What is the conversion rate of each page on your website, and what is the trend? Is that conversion rate going up, or is it going down, and what is happening as a result of that?” he says.

To mine analytics data to guide business growth, businesses need a culture of analytics from the top down. In analytically mature organisations, senior management, including members of the C-suite, use data analytics to provide strategic direction to the organisation, and the middle management uses it to improve day-to-day operations, according to the MIT report.

Unfortunately, not everyone fully understands the core metrics and terminology, and there’s uncertainty as to how to decipher them. Unless you are a data scientist, it can be daunting to interpret the sheer volume of data, especially when there are so many metrics available and often they can be very similar to each other.

One of the most commonly misunderstood metrics is bounce rate.

Google defines a bounce as “a single page session on your site, which means a user opens a single page on your site and then exits”.

Generally, a high bounce rate is bad and a low rate is good, but there are exceptions. For instance, if you have a single-page website or a blog, then a high bounce rate is normal. Therefore, a high bounce rate is not always an indication of a problem, and context and marketing goals should be taken into consideration when reviewing this metric.

Google Ads can be trickier to understand because of the speed at which the interface changes. Google’s algorithm for deciding how much you’ll pay and how many clicks you’ll get can be hard to grasp at times. Some of the most popular, yet confusing terms in Google Ads are:

  • Cost-per-acquisition (CPA): the average amount you have been charged for a conversion from your ad. CPA is calculated by dividing the total cost of conversions by the total number of conversions. 
  • Cost-per-click (CPC): the amount you pay for each click on your ads. Google Ads uses an auction system to display ads, and you are only charged the amount necessary for the click. 
  • Cost-per-thousand-impressions (CPM): a bidding option where an advertiser pays for 1000 impressions of their ad, regardless of the number of clicks. 
  • Cost-per-view (CPV): a bidding option where you pay for each video view.

From numbers to revenue

Commuters drive past an advertisement for Google Assistant.

With a gap in understanding analytics data, many decision-makers inadvertently make wrong decisions from data that can directly impact a business’s return on investment.

Suby says it is straightforward for an e-commerce business to measure how much revenue the business is making through e-commerce tracking and Google Tag Manager (a tag management system created by Google to track analytics on websites). However, for professional services, he recommends taking the following approach:

  • Find out how much the average customer is worth to you over their lifetime. 
  • Assess how many clients you have won over the past six to 12 months, and how many leads you needed to generate to do that. 
  • Take the number of leads you got. Divide that by the number of clients you have and the amount of revenue they brought into your business – this is your Earnings Per Lead (EPL). 
  • Now set up basic e-commerce tracking around EPL.

Once you start tracking your EPL in Google Analytics, it becomes much easier to calculate how much revenue is being generated through your online marketing efforts.

This insight, combined with all the information you can see in the A, B, C reports, can give you a 360-degree view of your business – but only if you really understand the metrics and terminology.

Quiz: how well do you know Google analytics?

If you find yourself poring over Google analytics data day in and day out, take this quiz to find out whether you know and understand data.

01. A session in Google Analytics times out after how many minutes of user inactivity?
A. 5
B. 15
C. 30
D. 60

02. Which of these is an example of Google Ads remarketing?
A. Shows ads to users who previously interacted with a site or app
B. Shows ads to users coming to a site from social media platforms
C. Shows ads to new users coming to a site
D. Shows social media ads to users who visited your site 

03. What is classified as an assisted conversion in Google Analytics?
A. When a user completes a conversion
B. When an interaction appears on the conversion path, but is not the final conversion
C. When a user completes a specified action on a website
D. When a user buys an available product/service

04. How does Google determine which ad is shown where?
A. Your click-through rate (CTR)
B. Your competitor’s ad rank
C. Your ad rank
D. Your bid amount

05. What are Google’s main algorithms called?
A. Penguin, Hummingbird, Pigeon, Mobilegeddon, Possum, Sandpiper
B. Fred, Albatross, Hummingbird, Pigeon, Panda, Pie, Possum
C. Panda, Penguin, Hummingbird, Pigeon, Fred, Possum, Mobilegeddon, Pirate
D. Panda, Pigeon, Mobilegeddon, Penguin, Parrot, Hummingbird, Falcon

06. What is the best practice for average Speed Index, according to Google?
A. Under 7
B. Under 5
C. Under 1
D. Under 3

07. Which of these factors does Google consider when ranking websites? 
A. Backlinks
B. Mobile-friendly
C. Length of page
D. All of the above

08. If a user comes to your site through a third-party traffic source, it is reported as:
A. Organic traffic
B. Referral traffic
C. Channel traffic
D. Direct traffic

09. What is an average search and display ad CTR across industries?
A. Search ad is 1.91% and 0.35% for a display ad
B. Search ad is 3.58% and 5.35% for a display ad
C. Search ad is 0.11% and 0.25% for a display ad
D. Search ad is 2.91% and 1.35% for a display ad

10. What is an exit rate for a web page?
A. The percentage of users who landed on that page and immediately left
B. The percentage of users who didn’t interact on that page 
C. The percentage of users who completed a transaction on that page
D. The percentage of people who left your site from that page

11. Where can you collect and analyse purchase and transaction data in Google Analytics?
A. Behaviour report
B. Audience report
C. E-commerce report
D. Acquisition report

12. If you want to compare your ad performance with other advertisers who are participating in the same auctions, which report will you look at?
A. Audience performance
B. Ad performance
C. Automatic placements performance
D. Auction insights


01. 30 minutes. 02. Shows ads to users who previously interacted with a site or app. 03. When an interaction appears on the conversion path, but is not the final conversion. 04. Your ad rank. 05. Panda, Penguin, Hummingbird, Pigeon, Fred, Possum, Mobilegeddon, Pirate. 06. Under 3. 07. All of the above. 08. Referral traffic. 09. Search ad is 1.91% and 0.35% for a display ad. 10. The percentage of people who left your site from that page. 11. E-commerce report. 12. Auction insights


Recommended for You

The good news is that today we have access to faster, better and more accurate data than ever before.

How to use big data to inform a post-pandemic roadmap


How finance professionals can use data to plan for the future

Machine teaching is about simplifying things by building multi-purpose tools that can be given to business users.

Machine teaching: the next extension of machine learning

December 2019
December 2019

Read the December 2019 issue of INTHEBLACK magazine.
