Marketing Statistics Series: Introduction to Online Marketing With Statistics

What ACTUALLY is Statistics?

When it comes to statistics, most people think that it refers to data analysis or something like graphs with past data. But these are a small small part of the story. Actually the truth about statistics is probability, prediction, sampling, analysis and hypothesis testing. I am Cyril, taking Major in Statistics in The University of Hong Kong. I will tell you how to predict your earning, analyze your email marketing and monitor your internet marketing with statistics.

I am not going to teach you step by step how to use differentiation, integration and stuffs like moment generating function at the basic moment. To the most difficult level, I will be teaching you about hypothesis setting, testing and confidence interval. These things are more important as these may help you to optimize your online marketing.

How Do I Apply Statistics in Online Marketing?

It’s all about Expected Value. Without expectation, you can do nothing with the number. Let’s look at the picture below. It is a website traffic analysis from a member in Wealthy Affiliate.

Edyls 6 month progress

Do you want to Build a website and get traffic into your website to make money like him? 

Since you have sufficient data, you can analyse those data to predict what will be happening in the future. Take this graph as an example, you can see that within 6 months, the website keeps rising traffic. The website has about 200 visitors per day in July and about 450 visitors in September. Although the increment of the traffic varies with different factors and it may decrease (if you do something wrong with SEO), you can predict what will be going on if you keep doing the same right things (such as posting content with similar consistency).

In statistics, you can plot a scattered graph at Plotly.com to get a regression line from the graph below. We can get a straight line graph of y=mx+c of m=88 and b=-371. (I have digitalized the month. i.e. April=4 and April 2016=16) Let’s do some affiliate marketing statistics by applying the basic knowledge into internet marketing.

We can get the number of traffic 2093 per day after two years from April. And I have to tell you that this is the MINIMUM number as Google will start jump your website ranking after your website have been built for 6 months. With past results, visitors usually will be converted to sales by 2%. With the program that I used to make sales, it converts free membership into premium membership at a 12.5% rate. So let’s do the maths. With 2093 visitors per day, you are getting about 42 referrals per day. At a 12.5% conversion rate, you are having 5 paid referrals per day.

Let’s do some calculation on the referral marketing statistics. For one paid referral, you are earning $22.5 commission per month (if he doesn’t quit). So 5 paid referrals means that you are having 150 paid referrals per month. That means you are making $3,375 per month!

Do You Mind Investing 2 Years to get A FULL TIME INCOME?

This is one of the basic way to apply statistics into online marketing. You can predict what to earn within few years. If you have no idea about maths and statistics, you can follow the steps below to make a very basic prediction. For further explanation of the online marketing model, please take a look below the steps.

  1. Build a Website (For making money)
  2. Work it with a niche and keep adding content
  3. Consistently add content for 4-6 months
  4. Get a graph from Google Webmaster tools or Google Analytics
  5. Analyse the traffic and plot a regression straight line curve (simply just importing data into Plotly and get the graph)
  6. Get an equation of y=mx+c
  7. Predict the number of traffic after few months or years
  8. Calculate the referral marketing statistics to estimate your earning from the program that you are using

I think the first step is the most controversial step from my post. You may think about “Why am I building a website to analyse or monetize my business?”. The truth is that you are not making money without internet. Even you are making money by streaming games, posting YouTube videos or freelancing, you SHOULD build a website to diversify your income. Moreover, creating an online business by building a website nowadays is really important. Keep in mind that a successful online business requires passive income stream. Without passive income stream, you are not building a successful online business at all.

Predict Passive Income with Referral Marketing Statistics

Referral Marketing Statistics is actually data from the sales that referred by you. From this statistics, you are using the actual sales and traffic from your website to predict the future income. This affects your future planning of your business, investment or spending.

Let’s talk about passive income. Passive income is a kind of income that runs automatically. It differs from freelance job or some effort-for-money jobs. Since you have been building up a passive income source, you will be making money online without doing extra work. But of course, if you want to stack up your progress to optimize your income or you want to increase your earning, you should not stop working. Although it may take you a long time to build a successful passive income stream to make money online, you are just investing about two hours a day to create a successful online business.

Since you have built a website, you can track your referral marketing statistics to predict your passive income. This is an IMPORTANT technique for you to plan for your future. Let say you are going to get married or going to buy a $1,000,000 house. You may think that $1,000,000 is impossible at first. But by applying the prediction and the statistics, you can get a picture of when will you succeed. Let’s take the above example, you are making $3,375 per month after doing online marketing for two years. Let us sightly stack up the progress. On average, the earning is increasing by $140. By sum of the arithmetic sequence (I assume that you have earned nothing with the first two years), we can get an n=98 which means we need 98 months to fully purchase a $1,000,000 house, starting with the first term a=3375. [Note: Sum of arithmetic sequence is (n/2)(2a+(n-1)d) ]

Although this is a really rough calculation, as your business won’t stack up as slow as a linear process, you can get a vision that represents your work and progress.

Within this series, you are learning more about the relationship between statistics and online marketing.

Please let me know how do you think of this by leaving a comment below! 🙂

Cyril
Building Successful Online Business

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