An update to Google Analytics is likely to transform how business performance is reported and how retailers resources are allocated, cautions Good Growth co-founder and chief executive James Hammersley

Google Analytics is one of the leading analytical platforms, used by brands globally to report ecommerce and digital performance. 

Like all technology platforms, it is frequently updated. In March this year, Google announced that as of July 2023 the current version of Google Analytics – Universal Analytics – is to become obsolete and replaced by GA4. From then, GA4 will become the only supported Google Analytics tool.

Online notice boards are full of commentary and frustration, but whether you like it or not the changes are likely to transform how business performance is reported and resources allocated. The dramatic changes coming need to be managed effectively. 

Chief executives, chief financial officers and chief marketing officers need to understand the risks and issues. Get it right, and organisations can build a strategic advantage over their peers through being quicker and better prepared for the forced changes.

Business reporting and measurement: how to gauge shopper engagement in online stores

Rightly or wrongly, many online retailers worry about conversion rate and whether more people are buying this week compared to last week or last year. At present, Google Analytics defines conversion rate as transactions divided by sessions (the total number of visits to the website), but GA4 measures against the user (the total number of people who visited the website). 

This change in calculation may have significant impacts upon an organisation’s understanding of effectiveness, for example:

 Reporting periodUsersSessionsTransactionsConversion rate
 GA Reporting 2022 (Universal)  Week 23  100  150  5  3%
 GA Reporting 2023 (TransactionsGA4)  Week 23  100  150  5  5%

In practical terms, organisations that rely on out the box reporting of conversion rate without any interrogation of what the metrics actually mean may see a sudden and anomalous uplift in commercial effectiveness, but without any increase in commercial performance:

 

In this event, how do organisations maintain a clear view of what good looks like, what does an increase in conversion rate mean for your performance and how do you make the right decisions when your understanding of what good looks like changes overnight, especially if you have not actually made more money?

Marketing attribution: what is the role of channels to drive a better commercial outcome?

Many organisations invest their marketing budget according to ROI as reported by last non-direct click (ie: to the last marketing channel that Google can identify where that channel is not direct). However, GA4 uses data-driven attribution (a machine learning process that assigns conversion based on the contribution and relationship of different channels in the conversion path) by default. This approach is different to last non-direct click.

Whilst this is arguably a more effective approach it will impact your understanding of marketing channel ROI. How do you ensure that you continue to make smart investment decisions if, for example, the ROI of your Google Shopping increases from 500% to 750% but paid search decreases from 600% to 400%? 

Were all your marketing investment decisions up to this point wrong or is the challenge to marketing channel attribution and ROI more nuanced? How do you ensure that you continue to make the right investment decisions, particularly given that data-driven attribution is a black box and therefore not something that you can interrogate further at scale?

Sales effectiveness: how effective are you at selling at key stages of the journey?

Many teams use engagement metrics from Google Analytics to benchmark performance and direct product investments to improve performance in the overall journey or specific pages. Because GA4 reports at the level of the user rather than the page and the session, many metrics organisations rely on to understand user engagement will cease to be available. This includes, but is not limited to, page views, exits and bounce rate.

These metrics are not as crucial as, for example, users or conversion rate, but are used widely by marketing and ecommerce teams to understand user engagement in the digital journey. 

By losing the ability to report these metrics, teams will need to use a different suite of KPIs to interrogate landing page and journey effectiveness. But a different suite of metrics will result in a different suite of findings – you may find some pages to be more effective and some to be less effective, but how much of this is a quirk of the data and how much, if any, represents genuine shifts in user behaviour – in which case does the new data add any value?

Supporting the migration to GA4

To be successful in the run-up to July 2023 and in the months to follow, organisations need to focus not simply on migrating to GA4 but rather ensuring that the operating model for growth is in place.

Some of the questions that must be answered include:

  • What are the trends in performance over time, what marketing channels drive these trends and where are we failing to grow?
  • Where do shoppers abandon the journey, how effective are your key landing pages and which stages in the conversion funnel display the largest rates of abandonment?
  • How many users are on the website to buy, and why do they fail to do so?
  • How do users describe their experience, what causes frustration and what are the triggers to purchase?
  • How do you align historical reporting in Universal Analytics with new reporting in GA4, how will you ensure consistency in reporting of key performance indicators and maintain a single version of the truth?

The process of migration should be easy. Setting and answering the important questions and receiving reliable robust data is the challenge of leadership.

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