It's All Geek To Me - January 19th 2005

Are they Making Money – Guessing Guide by Ross Lasley Here at KISS we spend lots of time and effort educating our clients on ROI, we want to make sure they know how to tell if their website is making money. This issue of It's All Geek to Me is on the same theme but with a bit of a twist – how do you tell if your competitors are making money? Let's assume you have competitors in mind – probably two or three of them. There are five simple steps to find out if they are making money. (And hey – this does assume your competitors have active websites that sell products and use reasonable marketing channels (CPC) to do so.

1. Check out the Site
Review the site carefully – look at the site map, see what the navigation is like, pay particular attention to the flavor of the content. Identify the most desired response (MDR) – typically buy our widget – and make a guess at the average order profit (AOP). Slowly go through each step of the purchase and see what it takes. Identify the secondary desired response (SDR), which is typically email address collection. The real key here is to take written notes that include the date of the review. If you feel advanced, come back in 60 or 90 days and see what they changed; they'll have given you a lesson on what is working for them and what isn't?

2. View Source
If you use Internet Explorer, you really ought to consider a decent browser like Firefox. In any event, when you are on the site home page go to the “View” menu in the top tool bar and choose “page source.” A large text mess will spit out, and this is the html that makes this page. What we are looking for here is the Meta data – page title, description, and keywords. While it is true that engines don't really look at this the way they used to, you'll still find them of use – they tell you what the site owner thinks is important keyword-wise. Typically, it will be a list of words separated by commas – copy and paste this info to your site review document just under the review you did in step 1.

3. Find “Links to” & other general info
Start with the big four – yahoo, msn, aol, and google. This is one of my favorite little search tools, “link:”. If you go to google and search for link:http://www.kisscomputing.com you'll get a list of sites linking to KISS. Here are the four searches for our site

Yahoo shows 407
Google shows 35
MSN shows 111
AOL shows 21

Next stop – Alexa. Alexa is a crappy little search toolbar but they offer traffic rank info as a result of people using their tool. Enough people use it that the data is relevant, but it should be taken with a big grain of salt. Go to Alexa and search for www.competitor.com – then click on the see traffic details link, lots of nice little nuggets of info there. Fagan has a tool that helps with this in tab format (Alexa is only one option)

Generally, this information is useful for apples and apples comparisons only. None are scientific in any way but can help – if you know the number of links on MSN for your site, the competitor's site and one other competitive site – each little piece helps you build a better picture.

4. Check the CPC Spend
This starts at Overture.com – click on advertiser center and then the “view bids” tool. Check the top bids for a half dozen terms the competitive site is using, observe the top bids and their bids if you can, write it all down in your site analysis report – which should be getting pretty thick by now. There are other sources for this type of data, but for now we'll just use the Overture example. You should know there are some people who spend on CPC without tracking and without logic – they can throw your numbers here. The vast majority of the time, though, those “overspenders” never go more than a month or so before they give up.

5. Do your Math
So you have collected a decent bit of good information about the competitor – now we can do some math to figure out if they are making money. First thing we assume is conversion rate – if the site is lousy, figure 0.25%; decent, figure 1%; amazing, figure 2.5%. Then, we guess at Average Order Profit – they sell jackets so they make roughly $47 each time someone buys one. Based on their CPC spend we can figure out what is working for them and what isn't.

If our competitor is spending $0.41 to attract visitors via CPC and the Average order profit is $47 and the site is average (1% conversion) here is what we can figure out:

1% conversion means it takes 100 people to get an order, at forty one cents each those people cost $41. The profit on that single order is $47, so they are making money on a CPC spend at .41 with a conversion of 1%. What if the conversion was 2%? In that case it takes only 50 people to get the order – at a cost of $20.50, so the profit is stronger in that example.

While all of the above is guesswork, when you put it all together it represents a pretty solid bit of research on your competitors – you can make basic observations about which sites are making the grade and which ones aren't. When you make these observations once a month for three or four months, you'll have a very accurate picture that comes from this research.

Distro-taculation by Michael McGrath Do you have a notion of the number of Linux-based operating systems available today? Would you be surprised to learn there are several hundred? Some of the more well-known include MandrakeLinux, Red Hat Linux, SuSE, Fedora and Debian. Virtually every one of the hundreds is free to download, and all come with relatively easy to follow installation instructions. All come, also, with multiple desktop environments (what the desktop looks like and how you use your screen to open applications like your browser, email client and office suite) including Gnome and KDE.

These Linux-based operating systems are distributed freely, as I said, and come with hundreds, if not thousands, of free software applications already included. They are referred to in the shorthand, “distro,” and there are a number of excellent web sites devoted to discussion of the many Linux distros. My favorite is www.distrowatch.com, and it provides a wealth of information about each one of the 100 it lists. Simply click on the name of a distro to learn more about it.

When you visit that site, you'll find a list in the right sidebar of the 100 distributions it reports on regularly, along with the download statistics of each through the Distrowatch site. In the left sidebar you'll find a list of the most recently released versions of those distributions, along with the most recently released versions of free software applications available for use with all of the distributions.

You'll notice on the list of free software applications that each is followed by numbers, and sometimes by the words. These numbers refer to the version of the software, like 1.0, or 2.8, and the words refer to the state of the release, like 4.2-beta. Let me explain. Whole number releases, like 1.0, 2.0, etc., are stable and have been tested extensively before being made available. A variation of a whole number release, like 1.2 and 2.8.1, would tend to indicate some minor enhancements since the whole number version was released, or the fix of a newly discovered bug. These interim releases tend to become available fairly quickly, and indicate that work is well underway for the next whole number version, which would, presumably, contain a bunch of new features, maybe a new look, even.

A “beta” version is an early release of a software application, being released for testing in the open source community for bugs. They are usually accompanied by clear warning that they are for testing purposes and should not be used as a front-line enterprise application. Active open source community members will serve as the testers for these “beta” releases, using the software in a safe environment (not using it to run their business or practice their trade or craft) and reporting bugs as discovered, as their part in the process of developing and producing free software.

I see today as I am writing this column that Gnumeric, a terrific and free spreadsheet program, has released version 1.4.2, probably meaning (with the .2 part) that it fixes some minor bugs discovered in the 1.4 version); Abiword, a word processing program I am fond of, has released version 2.2.3 (I use version 2.2, and I think the .3 part indicates some bug fixes); and Bluefish, a handy and easy to use HTML editor used to build web sites, is out with version 1.0.

Each of these software applications is free to download, install and use. They have been released in “beta” version initially, tested, debugged and presented to the world, worthy of being used. You can't buy them at Staples or Best Buy or Circuit City. They're available online for free download, or for a nominal fee, you can purchase the CD version online and have it sent to your office or home. It's a pretty sweet deal, and this is how I have obtained every piece of software I use at work and at home.

Next month I'll be offering a CD with a Linux-based operating system and all the software you'll need for basic internet use (browser, email client, instant messenger, office suite of applications). It will be set so that nothing need be installed on your system... you'll be able to run it from your CD-ROM drive. It will enable you to see what this “open source, free software, Linux” stuff is all about in an easy, can't be broken way. Check back then, please, for further details.