Decoding the Impact of User Engagement on Revenue with Google Analytics

Gone are the days when CPM, CPC, or CTR was used as the essential KPI to measure success. In today's ecosystem, these metrics no longer help us optimize campaign ROI. For example, higher CTR doesn't mean better ROI. Why?

-CTR?can be misleading,?

Scenario A: Impressions: 500000,?Clicks: 10000, CTR-0.02?

Scenario B : Impressions: 900000,??Clicks: 13000, CTR-0.01?

Would you prefer a higher CTR or a higher number of Clicks?

- A click doesn't reveal anything about the quality of your visitors,?

- Ad frauds adding to the concerns?

No wonder, marketers are shifting their focus to the quality score. But how will we measure quality scores? Though we're still not in a stage to optimize on the Quality Score but user engagement undoubtedly should be part of the quality score. Higher engagement indicates a better user experience. But does better user experience lead to higher Revenue?

Next, I'm going to dig into Google Analytics to pull out the relevant engagement metrics available for Google Merchandise Store. Let's not look at these metrics in silos, but explore the relationship between these metrics with revenue(after all, earning is the end goal!). Is it a weak or strong Correlation??

We selected the below metrics to gauge the impact of user engagement on Revenue for the Google Merchandise Store:

?- Avg. Session Duration

?- Pages / Session,

?- Bounce Rate

?- and Revenue.

Avg. Session Duration vs Revenue

There's a strong positive linear relationship between Avg Session Duration and Revenue on Desktop & Mobile. An increase in Avg Session Duration leads to an increase in Revenue. Also, Avg Session Duration is higher on Desktop compared to Mobile and its relationship with Revenue is also stronger. Interestingly on Tablets, the changes in Avg Session Duration don't affect Revenue!

Pages/Session vs Revenue

Pages/Session reflects similar correlations with Revenue, but a bit stronger than that of Avg. Session Duration. One thing to notice, these two variables are closely tied.

Bounce Rate vs Revenue?

Be aware of Bounce Rate! There's a strong Negative correlation between Bounce Rate and Revenue. The higher the Bounce Rate, the lower the Revenue.

And now,?

CTR vs Revenue?

Can you see it? There's a very weak correlation between CTR and Revenue.

So, here we demonstrated how engagement metrics strongly impact Revenue.??

Higher Avg. Session Duration or Page/Session or lower Bounce Rate = Higher User Engagement = Better User Experience = Higher Revenue

But, Correlation doesn't imply causation! Let's not forget about the power of segmentation. Like? We can always dig a little further into the Landing Page, which landing page has the strongest correlation with Revenue or the highest Bounce Rate? What's more? You can even measure the threshold limit of the number of ads before the Bounce Rate skyrockets.?

However, these trends and patterns are observed for a particular e-commerce site and might vary for different sites. However, broadly speaking, we're on the right track when we're optimizing sites to increase session duration and page views.?

I'd like to hear from you and learn. Do you observe a similar correlation for your website? Also, since GA metrics are Averages and not absolute numbers, do you think they can be misleading at certain times??