Today Google announced the biggest news since the inception of its paid analytics service, “Google Analytics Premium.” This shows that Google is going to be kicking it up a notch with its enterprise-level service offerings and promises to reveal many exciting new features upon release.
Let’s do something here on our Analytics & Site Intelligence blog that quite honestly we don’t do enough of: talk about pure statistics! Can you feel the excitement running through your veins? Oh wait, that’s only me.
As the Web Analytics industry becomes more and more mature, the requirement to understand basic statistical concepts becomes greater and greater. Awesome new features, like Google Analytics’ Intelligence report section and predictive modeling features from Google Insights for Search, beg the user to dive deep on their web data, segment it, grab insights, make a conclusion, and take meaningful actions.
Sure, you can do all that without knowing a lick about statistics, but chances are very high that you’ll start to get confused, lost, and overwhelmed along the way. Think of statistics like contractors think about a foundation for building a home – we all know what happens without a strong foundation!
Enter “Standard Deviation”, which is quite possibly (next to mean) the most important element in the field of statistics. Standard Deviation is the variance (another stat term!) from the mean (average) of a set of data.
Let’s say that the average football fan watches 3.5 hours of football a week, with a standard deviation of .5 hours (a half-hour). This means that – assuming a normal distribution (a third stats term!!) – most football fans (about 68% of them) will watch anywhere from 3 to 4 hours of football a week. Since the average is 3.5, and the standard deviation is .5, watching 4 hours of football a week is said to be “one standard deviation above the mean”. Conversely, watching 3 hours of football is said to be “one standard deviation below the mean”.
However, almost all football fans (which is about 95% of them, assuming a normal distribution), will watch anywhere between 2.5 and 4.5 hours of football, which is said to be “two standard deviations above or below the mean”. It’s two standard deviations above or below the mean, because 2.5 hours or 4.5 hours is two “.5’s” above or below our mean of 3.5.
In statistics, it is generally considered unusual if a particular data point (like, watching 9 hours of football) is above or below two standard deviations from the mean. Watching an average of 9 hours a week of football for the average football fan is way…WAY above 2s (two standard deviations), so this would be considered highly unusual for the average football fan.
What it means for you (the Web Analyst)?
Knowing what Standard Deviation is and how it’s used in Web Analytics will help you get an idea of just how important events that happen on your website could be. For example, in the new Intelligence Section in Google Analytics, you may see some alerts for an increase in Revenue from different regions:
If you notice on the left-hand side of the image, the revenue for this particular time period increased by 111% from North Carolina from the expected revenue. This is definitely significant (check out the significance bar on the right), as it’s about 3 or even 4 standard deviations above the mean! Perhaps your new PPC campaigns that were targeted to North Carolina were successful, and you can now duplicate that success everywhere else! Or maybe your email marketing strategy worked, and North Carolina residents responded so well that you can re-market to them in 1-2 months.
In that same image, the Revenue from the United Kingdom increased by 46%, which is about one or possibly two standard deviations above the mean. It’s not as significant of an increase as North Carolina’s, but still worthy of your attention nonetheless. Apply the same negative keywords or the same match types for your other international campaigns as well!
So now that you know what standard deviation is all about, use reports like Google Analytics’ Intelligence section to get a truer, deeper meaning of just how significant certain trends are that happen on your website, which will allow you to improve whatever it is that you are doing exponentially. You’ll be a better analyst for it!
Earlier today at eMetrics in Washington, D.C., the Google Analytics team announced some awesome new features that will provide greater reporting capabilities, more flexible customization options, and add an element of insightful intelligence to your report data. How exciting!
Let’s review the newest features of the Google Analytics Product that were announced today as “Powerful. Flexible. Intelligent.”:
1. Expanded Goals – Expanded Goals now allow administrators the ability to add up to 20 Goals per profile, a 500% increase on the previous number of four goals per profile!
2. Site Engagement Goals – Site Engagement Goals now allow you to more robustly measure user-engagement and branding efforts off of your web site. Instead of only being able to define URLs as goals, you can now define the time on site or the number of page views as a goal in Google Analytics.
3. Expanded Mobile Tracking – Google Analytics will now have the ability to track mobile applications built for the iPhone and for the Android platforms. Mobile site owners will be able to install specified tracking code on their mobile site, which will allow them to analyze what actions are taken with a mobile application and what features are used.
4. Advanced Table Filtering – This will be enabled in all standard Google Analytics report tables and will allow users to filter rows based on metric conditions and combinations, just like a user can when creating an Advanced Segment.
5. Unique Visitors – This is a new metric in Google Analytics that will be available when creating a Custom Report. This makes it possible to see how many actual visitors make up any user-defined segment in a Custom Report.
7. Advanced Segment and Custom Report Sharing – Even though this was already announced, this option allows users to share Custom Reports and Advanced Segments with each other via a permanent URL that can be forwarded or emailed to another user.
8. Intelligence Reports – Intelligence Reports will be part of a brand new report section which will feature pre-defined alerts for your Google Analytics account data. This is designed to alert a Google Analytics user to a significant change in data patterns over daily, weekly and monthly periods. This is just a part of the initial release of an algorithmic driven intelligence engine.
9. Custom Alerts – Need to set-up your own alerts with your own parameters? Now you can do just that within the Intelligence Report section of Google Analytics. Define your own set of rules and make your own determinations as to what is significant for your and your web site, and even let Google Analytics email you when an alert happens!
These features are very exciting, but they are only the beginning of greater things to come in 2010. These features are also being pushed out to users over the next few weeks, so check your Google Analytics account frequently (which you do already) and be the first person on your block to use them!