Nearly two thirds of consumers do their research online and then purchase offline, according to Forrester Research. Consequently analytics will play an increasingly crucial role in Internet marketing by helping to transforming the art into a science, and by allowing companies to seek new ways to measure all aspects of online behavior. Not surprisingly, 54 percent of companies expect to spend more or significantly more on Web analytics in 2005, according to the Forrester report "Customer Experience Spending Expands."

The big challenge in measuring online marketing results is deciding what to measure, and how to relate those measurements back to business goals. For companies with products or services featuring a long sales cycle, the goal is to use online marketing to build a pipeline of prospects, and use analytics to better target the most qualified leads to help move them through in the buying-decision process.

Take, for example Dow Chemical's specialty chemical division. Its first venture into online marketing was veritably its first venture into marketing, period. The more than 60-year-old division had previously supported a small cadre of specialized customers for decades. In 2002, however, that all changed when Dow decided to bring in a new marketing manager to expand the business. Christy English, now a public affairs manager for Dow, was put in charge of a tiny budget and told to find new customers. She remembered a presentation from ClearGauge about how to market more effectively online, so she contracted the company to help support the directive.

Dow's specialty chemicals business consists of a few chemicals used in about 25 different applications, all with long sales cycles taking from two to five years. However, profits are high and relationships tend to be long term, English says. "We needed to develop a pipeline of customers, and ClearGauge's highly targeted research expertise helped us home in on various types of chemists, by job description, industry, and other factors, who might be interested in our chemical monomers." (Monomers are used to improve the chemical and physical properties of a broad range of applications including coatings, specialty polymers, and more.)

Following the initial online research into new prospects, English poured the division's marketing dollars into two specialized online campaigns designed to target those prospects and start an interactive online dialog with them. "Because of our limited budget, and the ability to measure traffic [on our site using ClearGauge's analytic tools], online marketing was our only resource," English explains. During the online campaign, the activities of highly valued prospects, such as inquiries for more information, increased by 20 percent, and technical inquiries increased by 70 percent. Dow defines highly-valued online customers as those who make specific requests for information, English says.

The online effort also gave Dow the ability to quickly switch gears to pour more resources into Web content. In one instance, the division learned from ClearGauge's analytics that many visitors were dropping off soon after visiting the web site, so Dow added more information on its specialty chemicals and their possible uses in a range of industries. Success was immediate as traffic on the web site grew 15,000 hits per month from March through August 2003. That October traffic spiked to 30,000 hits per month with the unveiling of a second online campaign that included an expanded list of potential users delivered by ClearGauge. Dow ended 2003 with two solid customers, each representing millions of dollars in sales for the division.

The ability to measure behavior has enabled Dow to clearly see what prospects do on its web site, and take action to, for example, create new content to help build a continuous flow of contact with customers and generate prospects for its sales pipeline. Consequently, Dow has continually upgraded its Web content, added new search parameters, and measured behavior to address spots where customers leave before taking some action. "Data analytics justified our work in a way that's not possible in other forms of marketing, communications, or advertising," English says.

View the ClearGauge Case Study related to this article.