Podcast: Brian Eberman Discusses Modern Day Data Analytics For E-commerce With Jon Tromans

The e-commerce channel saw unprecedented growth over the last 3 years. But operating in this dynamic environment is more challenging than ever. Brian Eberman joins Jon Tromans on his podcast: “Not Another Marketing Podcast” to discuss some of the challenges e-commerce sellers, large and small, are facing today. In their discussion, Brian and Jon attempt to explain some of the important subtleties of these issues and provide solid strategies companies and their marketing teams should pursue.

Included in this discussion

• The specific iOS updates that wiped out ad tracking on platforms, like Facebook.
• How service-side pixels work and how they can help restore lost ad tracking.
• The importance of 1st party data in a post 3rd party cookie marketplace.
• The key marketing metrics that businesses should measure based on their business model.
• The importance of customer heterogeneity when using insights to optimize marketing programs.

Transcript

0:00:00.0 Jon Tromans: Hi, welcome to Not Another Marketing Podcast where I’m talking to Brian Eberman, the CEO of Zeenk, an analytics company for e-commerce sellers. So this week, we’re talking about what e-commerce needs to measure and how you need to measure it.

[music]

0:00:25.3 JT: Thanks for downloading. Now, when analytics are mentioned, eyes tend to glaze over. But in a world of multiple platforms, kind of dragging in clients to your store from everywhere, all over the place, it’s vitally important. But what do we kind of need to measure and how do we go about measuring it? So in this episode, I’m talking to Brian Eberman. He’s the CEO of Zeenk, which is an actionable analytics company for e-commerce. Unlike me, Brian seriously understands e-commerce analytics and he explains things like first party and third-party data, what we should be measuring, how it should be measured. It’s a masterclass in understanding data. Now, you can find Brian on LinkedIn and Twitter and the Zeenk website. There’s links in the show notes, so give them a tap. Can I quickly mention that, Not Another Marketing Podcast is ad free. I’d love it if you could give the pod a shout on social media, subscribe on your favorite podcast app. You can check out more episodes at jtid.co.uk/podcasts. Now, the first thing that I asked Brian was, proving ROI, the return on investment for our digital efforts is kind of difficult. So, give us an idea on what we should be measuring.

0:01:36.8 Brian Eberman: The modern e-commerce store should definitely be measuring first-party data on their own website, making sure they have direct access to their own first party data, which is all the click streams that are coming into their site, making sure that they’ve got UTM tracking on everything, and that they’re tracking all the experiences through it. So that’s just the starting point, right?

0:02:03.7 JT: Yep.

0:02:03.8 BE: Now they can feed that to GA, and I think most people do. The difficulty… There’s a couple difficulties with GA, but it’s definitely something that people should be doing. Then I think on the orders side, really the insight you wanna look at is, what are my customers worth? And that requires looking at not only what they ordered and what revenue you generated, but what did it cost you to deliver that revenue, and what did it cost you to get that customer?

0:02:33.0 JT: So let’s talk about first party, third party, for those who don’t know. Kind of explain the difference between first party data and third party data.

0:02:42.3 BE: Right. And there’s also between first party cookies and third party tracking.

0:02:47.6 JT: Yeah. Yeah. There’s a lot to get… Yeah.

[laughter]

0:02:50.1 BE: Yeah. So, first party is the store.

0:02:56.1 JT: Sure.

0:02:56.5 BE: The store has essentially a right that Apple and Android still acknowledge, to understand what’s going on on its own website. Who’s come… Not who the person is, but how much activity is happening on their website? Where did the traffic come from? What did the traffic… The people who use the website do on the site? What did they buy? Ultimately, the core part of your first party data is your registered users and what they purchased and what is your COGS. And all those things are actually internal. So, we need to distinguish between the stuff that even on the first party side, the stuff that the company alone knows, and the stuff that can be discovered through pixels and tracking.

0:03:44.2 JT: Sure. The first party data is kinda like our data with… We can… We’re tracking this at the moment, quite a lot via third party companies, aren’t we?

0:03:54.5 BE: Yes. So I was gonna say, third party is almost always client side. Whereas, first party can be both client side and server side. And client side means that it’s JavaScript running in the browser. And third party, which almost every… Well, basically every… All ad technology platforms… I’m gonna distinguish us a little bit in a minute. But all people who sell you ads: Facebook, TikTok, Google, they’re doing third party tracking. They have a JavaScript that you insert on your website and it tells them… Or it used to tell them everything that happened on your website. That’s considered third party. And GA itself is actually considered third party in many ways. And what’s happened, a lot of… It’s been a number of startups… We’re one of them, but there have been a number of startups that have basically come out and said, “Look, we can help you with tracking and analytics.” And the reason this has become so hot in the… One of the reasons, there’s a lot of reasons. And I think there’s a number of fundamental reasons, but what’s accelerated over last year is the changes in Apple’s policy on iOS…

0:05:06.7 JT: Sure.

0:05:06.8 BE: And with WebKit.

0:05:07.4 JT: Yeah, yeah. That’s causing a bit of… Yeah. It’s causing a bit of trouble, isn’t it?

0:05:12.2 BE: Yeah. It’s causing a bit of trouble. I do think there are more fundamental reasons over time that people should get ahold of their own data and understand who their customers are. But the Apple side has driven a lot of activity over the last 12 months. A lot of conversations about switching to TikTok from Facebook, although I don’t think that’s actually solving anything.

0:05:34.4 JT: Yeah. Yeah. So, do you… So with the third party cookies probably coming to an end soon in the next few years, I would imagine, do you see us… Instead of using something like Google Analytics to collect our data for us, do you see us collecting our own data then maybe passing it on to somebody else?

0:05:55.2 BE: Yes, I do. And that could be Google still. It could be still Google Analytics, but what’s happened here… Just to give you a little bit of the history, with the increase in privacy, GDPR, California privacy, etcetera, Apple really made the first major move. And what they did is… They did three things with WebKit and iOS. So with iOS, if you’re on the mobile side, if you’re a mobile app, you were severely affected by what’s called IDFA, the ID for Advertisers, basically being optional and requiring user permission to turn on, when before, it was on by default. And all of the mobile attribution companies basically relied on IDFA, that was the central part of their business. On the web side, it’s really changes in WebKit, which has underlie Safari and parts of Chrome. What they did is they first started blocking what they considered third party pixels, and they did that by saying, anything that opened… I’ve seen this thing open a connection to a website from many different websites, so therefore it’s a tracking cookie… It’s a tracking pixel, and I’m gonna block it. And so, GA falls into that bucket, because of course, it’s opening a connection to GA. Facebook falls in that bucket, TikTok falls in that bucket.

0:07:22.9 BE: The next thing they did is they said, and you’ll see this very, very, very clearly if you look carefully at your revisit data, “Any cookie that isn’t a server-side cookie is deleted after seven days.” And they basically said, “We’re gonna shorten that to three days if it’s a tracking cookie.” So you’ll see that that’s why Facebook went to a seven-day attribution window, because basically, it disappeared. [chuckle] That’s why they did it.

0:07:49.0 JT: A lot of this is being driven particularly by Apple, because Apple’s obviously positioning itself in the marketplace as, “We care about you and we’re gonna look after your privacy and everything,” but then if you look at the stats on kind of like browser stats particularly, we’re kind of like talking 90% plus Google Chrome. So, Google Chrome are obviously gonna be letting everything through, I would imagine, ’cause Google wants to suck up as much as they can.

0:08:15.9 BE: They’re starting to do similar things. They’re not as far along. If you look at revenue to D2C companies though, it’s a different split, because the iOS side typically has higher purchase rates.

0:08:29.9 JT: So, a lot of this, we’re talking mobile, right? We’re talking mobile stuff, away from the desktop browsers and things, yeah?

0:08:36.8 BE: Yeah, unless the purchases happen on mobile, this effect on WebKit is both desktop and mobile. But on desktop, it really only affects you if you’re using Safari. So if you’re on Apple device, which has a very small percentage of total usage… The other thing, I think, that’s a little subtle to understand, is that when you’re on Facebook or TikTok, and you see an ad and you click on that ad and go to the website, you’re still in Facebook’s browser.

0:09:06.9 JT: Sure. Yes. [chuckle]

0:09:09.0 BE: And so, then the person goes to even on their mobile, that’s a different space, a different tracking space. And so, that shows up as untracked traffic.

0:09:22.6 JT: You can kind of see… If you’re running an e-commerce store and you’re just getting on with your business and you’re selling your t-shirts and your shoes and your whatever, you can see why this is just like, “What is going on? I don’t understand a word of it.” Because I mean, it confuses me and I’ve been doing it for nearly 20 years.

0:09:39.7 BE: Right. Yeah. I think there’s a tremendous amount of subtlety here, and I’ve been doing this for like 20 years, like you, and it’s constantly changing. So you really have to rely on another party. Generally, people rely on their agencies around this to explain it to them. But I think even some of the smaller agencies have a hard time keeping up with what’s actually going on.

0:10:01.7 JT: Do you think in the future, we will move to something where we collect our own data, and then we decide exactly who we can then pass it on to? Like if we’re running Facebook ads, we might give some of our own data to Facebook to target our ads.

0:10:13.2 BE: Yes, I do, and I think that’s the bet we’re making. I think that the companies who are smart are basically moving towards, “I’m gonna understand all of my own traffic. I’m gonna do as much as that as I can, from server-side tracking, and server-side cookies.” We actually integrate with people who do that, because that’s not blocked.

0:10:34.5 JT: Sure.

0:10:35.1 BE: Because ultimately, the user has to interact with your website, and so your code has to interact with your website. And I think that it’s reasonable to say, if you think about someone at a store, like, “Okay, I track that someone came to my store.” “Oh, I’m starting to recognize that person buys from me a lot.” What the objection is, “I know you go to these 20 stores, so I’m gonna advertise to you.” And I can see that you’ve moved from my store to my competitor’s store. That is really a bit of a violation of privacy. But knowing about who come into your store and being able to provide them personalized offers, seems eminently reasonable.

0:11:16.5 JT: Right. So I think we’ve got first party and third party, I think we got that sorted, I think. You mentioned UTM tracking, which I don’t think folks do enough, in my own opinion. I think that every flipping link you send out to the web should have some sort of tracking built into it, so you know where it’s going. Just explain briefly what UTM tracking is.

0:11:37.9 BE: So UTM tracking is an old mechanism. It’s been around for quite a long time, where you’re basically appending parameters onto the webpage request. And all the ad platforms will auto… If you put a pattern in, will auto-fill that pattern for you, to provide you information about the click. Where did it come from? What ad did the person see? What ads were they in? What campaign were they in? And what source were they in? And there are… Google recommends a number of standard patterns, so does Facebook, so do we, so does every analytics provider, and it’s really important to enforce on your marketing team that they follow those standard patterns, otherwise you do all the work and you don’t generate as much value.

0:12:26.3 JT: Yeah. So we’re trying to, I suppose, segment the different places where we’re promoting our products and our businesses, so we can see…

0:12:35.2 BE: Yeah, exactly.

0:12:36.1 JT: Yeah. We can see whether a tweet has generated us business, or a Facebook ad has generated us business, that sort of thing.

0:12:40.5 BE: Exactly. And then ultimately, what you wanna know is, where did my traffic come from? And you can’t… Like as I said, you can’t fully track that because you might have some stuff that looks like it’s organic, meaning it’s on the UTM parametered, like Google search or something, that actually came from an ad platform. But most of the traffic can be tracked through this. You don’t know who the user is…

0:13:07.1 JT: Sure.

0:13:07.6 BE: But when they arrive on your website and your first-party tracking, you can say, “Oh, I’ve seen that person again. They’re now coming in through Google, when I saw them previously on Facebook. So, this is the second time they’ve come to my website, and they seem to be interested in this product.”

0:13:21.6 JT: And then I suppose you can notice that and you can maybe even tailor the content towards that person. Right?

0:13:29.5 BE: Exactly. You can tailor the content, you can tailor the offer, you can do more sophisticated things like turn off advertising when they’ve come too many times. You can set the… When they do buy, you can set the value of that purchase back to the ad platforms so they can bid to return on investment effectively, or return on advertising spend. And you can ultimately compute, what did it cost you to get a customer?

0:14:00.9 JT: Yeah. And that’s important. That’s really important, because I know a lot of folks don’t do that. They look at like the overall spend, they kind of like look, “Oh, well, we spent 10K this month on Facebook ads, and we got 40K of revenue or something like that, so yeah, it’s working.”

0:14:15.4 BE: Exactly. And it actually even surprises me most people do exactly what you just said, they look at the month and they say, “I spent $100,000 in advertising this month, I got 2000 new customers.” Hopefully, they distinguish new versus old. “And it cost me $50 to get a customer.” And when you say, “Well, what did it cost you to get that on Google? What did it cost you to get that on Facebook? What did it cost you to get them from Minnesota versus getting them from Maryland?” They have no idea.

0:14:47.0 JT: Yeah, yeah, yeah. Yeah. And that’s where it get… And that’s… When you look at it very analytically like that, that’s where you can start switching campaigns off and altering campaigns and trying to save a little money and get one more oomph out of your ad spend.

0:15:02.1 BE: Exactly. I mean, the customers that we’ve looked at, and I think anyone who can view analytics, you’d see this. You can see it’s just a tremendous spread. It’s not like it’s a 10% spread, 20% spread. It’s a multi-factor, like a 100-1 spread in what it can cost to get a customer.

0:15:19.2 JT: And when we’ve got that customer, I suppose, like you’ve mentioned before, that customer’s worth to you, do we need to be kind of measuring the lifetime value a little closer?

0:15:28.4 BE: Yes. It does depend a bit on your business, in terms of lifetime value. Everybody should be measuring cost of acquisition. But I would distinguish companies into sort of three buckets, if you will. And there’s sort of some mixtures here. There are the companies that… Well, maybe four buckets. There’re the companies that sell a small set of goods. And when the user purchases that good, they basically… That relationship with the customer is effectively over. For those guys, and there are a lot of those companies. Really, what matters is cost of acquisition versus the average order value. And actually, you shouldn’t even look at our average order value, you should look at average order profit, after accounting for COGS. Then there are the companies that sell many different products. Each one might be only bought once, but you have the opportunity to sell the consumer another product by building a relationship with the consumer. And their lifetime value matters. And then, you have the companies that are selling consumables…

0:16:33.2 JT: Sure.

0:16:33.8 BE: Of some kind. And lifetime value is everything for them.

0:16:38.9 JT: Yeah. Yeah. Yeah. ‘Cause the cost of acquisition could be quite high. But then, over the lifetime…

0:16:44.5 BE: Exactly.

0:16:44.8 JT: Over the lifetime of the… I had somebody explain it to me really simply a few months ago on the podcast, on another episode. And they said, if you think about a brow bar, somebody that does your eyebrows, it’ll cost like £10, $10 to get your eyebrows done. It might cost £30, $30 to get that client on Facebook. But then, once they’ve had their brows done, they’ll have them done again in a few weeks time, and then again in a few weeks time, then they might get their nails done, they might get their hair done, and they… And at the end of the day, over a year, they’ve spent a few hundred pounds with you, just that one person, and the cost of their acquisition has been £30. And then it’s worth it. Isn’t it?

0:17:21.8 BE: Exactly. And really what you have to do is figure out… It’s very much worth it ’cause maybe you spent £30 to get them. The first order is 10, but over their life, they might be worth £200. The trick is to figure out who’s gonna be worth £300 and who’s only gonna be worth £10? And, which activities you’re undertaking tend to increase the value. And it’s not just advertising. It’s communication, it’s service, it’s product choice, it’s pricing, it’s discounting. But you really wanna look at your business through those activities and how they’re affecting the lifetime value of your customer.

0:18:01.6 JT: So when we track all this, ’cause as I’ve said before, this can be mightily confusing, even for folks who’ve been doing it for a while, especially with all the different platforms which are dragging in clients to your website or your app. How do we actually kind of unify all this data in one place?

0:18:22.8 BE: So, what you want is… The larger companies have solutions for this, right?

0:18:27.8 JT: Yeah.

0:18:28.1 BE: And I think the challenge has become that the mid size e-commerce companies now need to play at that scale.

0:18:36.1 JT: Yeah.

0:18:37.1 BE: If you’re Wayfair, or you’re LL Bean, or you’re Little Lemon, you hire a bunch of engineers and they spend millions of dollars, and they build you this system. Or, you spend a ton of money on a CDP, and you integrate that with your data warehouse.

0:18:50.4 JT: Sure.

0:18:51.0 BE: But if you’re a $5-10 million e-commerce spender, that’s completely out of reach.

0:18:55.5 JT: Sure.

0:18:56.5 BE: So I think that’s why the market opportunity for analytics has appeared in the space, is there’s so many companies in that boat. And what you have to do is you need to integrate all your advertising data, all your sales data, all your user data, and then you have to decorate the user data with anything you’ve learned about the users in terms of the activities you’ve done for those users. And then you need the analytics that will help you slice and dice that to understand how various activities you’ve done have increased the value or decreased the cost.

0:19:30.3 JT: So, how does your tool help with all of this? Zeenk, which is a great name.

0:19:34.7 BE: Yep.

0:19:35.2 JT: Zeenk.

0:19:36.0 BE: Yep. So we’re one of a handful of players that are working on this problem. We provide people an analytics tool, an analytics platform that pulls in all their advertising data. So, we solve that problem. We unify the data. We pull in advertising data, sales data. We have a first party pixel, I think, that the company deploys to link the advertising data, the sales data. And then we provide a mechanism to enrich the data with things that only the company knows.

0:20:09.9 JT: Sure.

0:20:10.4 BE: Right? That this user was subject to this discount, that this user buys… I don’t know. That they might have demographic characteristics. We get their COGS data, and we unify all that into a single platform. And then we also provide a data engine, a data science engine on top of this data to basically build customer lifetime value models and cost models for them, that can then be segmented using any of the user characteristics.

0:20:40.5 JT: And I suppose that the results you get from this can drive your strategy in the future, right?

0:20:46.1 BE: Exactly. So, a typical thing we show customers right away is, “There’s a hundred to one variation in your cost of acquisition. There’s a hundred to one variation… ” Almost always, a hundred to one variation in lifetime value of these customers. “You haven’t correlated this. They’re not linked to each other. You’re spending a lot of money on people who are not worth very much, and you’re not spending enough on people who are worth a lot. You need to chop these into audiences, go after them at different price points. And then you need to look at how your activities, like running an AB test or changing your product offering mix, are affecting that.”

0:21:23.6 JT: Are the reports readable? Because I still hate Google Analytics. And the new Google Analytics 4 is just… Well, I don’t think it’s ready yet.

[chuckle]

0:21:35.5 BE: Interesting. We provide a very powerful tool that acts a lot like Excel. So, we basically pull all the data in as if it was a giant spreadsheet, it doesn’t matter how much you have, and give you an online ability to pivot it and look at it however you wish.

0:21:56.2 JT: Sure.

0:21:57.8 BE: And then, we guide people with our own reports on how to look at that data effectively. And we provide customer success service on top of that, that helps people understand what to do. And often, we’re engaged with their agencies.

0:22:14.0 JT: So we don’t have to sit down there and try and make headway of all of this ourselves, ’cause we can just look at pretty charts?

0:22:21.5 BE: Well, you still have to know what to do. That’s where customer success becomes really important, right?

0:22:27.4 JT: Yeah.

0:22:28.9 BE: And we provide a lot of support to the company, ’cause as you said, they’re in the… A lot of these people that are in the eCommerce business are very, very good product people. They know their customer, they know what product they wanna build, they know how to source it, they’ve… But they… You know, it’s very difficult to do that and know the marketing side.

0:22:46.6 JT: Yeah, exactly. I mean, I know a lot of marketers as well who are absolutely excellent at marketing, but they… It’s just like analytics in that they’ll hire somebody specifically to do research and analytics, right?

0:22:56.7 BE: Right. Right.

0:22:57.1 JT: Yeah.

0:22:58.0 BE: And if you look at the marketplace of labour, analytics and data science is one of the hardest things to find.

0:23:05.4 JT: Yeah. [chuckle] Yeah, yeah, yeah. Brian, this is fascinating. I could go on for hours about this, because there is so much to talk about, and it… As you say, it changes so rapidly with all sorts of different… You know, with Apple, what they’re doing with new social platforms coming to the fore and disappearing maybe and, ugh, yeah. Where can we find Zeenk? It’s a great name. And where can we find your website, social media?

0:23:33.2 BE: So we’re spelled, Z-E-E-N-K.com.

0:23:36.6 JT: Yeah. Cool.

0:23:37.5 BE: So you can find us on the web, you can find us on LinkedIn. Follow us on LinkedIn, we’ll be posting things about how best to measure your company and optimise your business constantly there. We also have a blog, you’re very welcome to follow, where we discuss similar topics. And we’re always open for any kind of conversation to help people understand how to optimise their business.

0:24:00.0 JT: Fantastic, Brian. Look, thanks ever so much for your time. I really appreciate it.

0:24:02.6 BE: Alright. Thank you.

[music] 0:24:05.5 JT: Thanks again to Brian for his time. Don’t forget to check out the links in the show notes. If you’ve enjoyed this episode, you can subscribe on Apple Podcast, Spotify, your favourite podcast player. Just search for Not Another Marketing Podcast. Thanks for listening.