I have covered the Boston Consulting Matrix as a tool over at SEOmoz a while back (2008 actually!). I find it very useful in evaluating the need for improvement based on priority. Often the time and resources are limited, but the amount of work we have that we can do limitless. I use BCG to evaluate my own sites which lead me to be able to work on profitable sites, and make decisions on where to allocate resources such as time, energy and budget. It can be argued that you don’t need advance tools or frameworks to do this, but often the visual demonstration is a much better motivator.

I wanted to refresh the technique with a real life example from my own sites and visually demonstrate the potential for Advance Marketing Strategy to be used in Online Marketing.

For the sake of those who haven’t heard of it before or those who want a quick refresher:

Although popularly known as the Boston Consulting Group Matrix, the actual name of this well-known marketing theory is the Growth Share Matrix or the Product Portfolio.

For those who don’t know of the BCGM, here’s a VERY simple version:

The BCGM is used for those businesses that have more than one product in their portfolio. It is used to determine what priorities should be given to products. The theory stipulates that to maintain long-term value, a product portfolio should include base level products that are entering the market and need support, and established products that are profitable earners.

It analyses two dimensions: market share versus market growth. The bigger the market share or the faster the market growth, the better it is.

The BCG Matrix places products into four distinct categories:

• Stars – high growth rate and high market share
• Cash Cows – low growth rate and high market share
• Question Marks – high growth rate but low market share
• Dogs – low growth rate and low market share

I have selected a sample of 13 sites of various ages and level of effort put into them – and recorded Visits and Revenue over the same period of time. None of these sites bring in award winning incomes, but together make a decent disposable cash for the level of effort I have put into them (i.e next to nothing). Some are newer than others, and some are in less competitive niches – most of these considerations should ideally come after the BCG Matrix analysis.

As the BCG Matrix actually uses Growth vs Market share as metrics, which really cant be used as they stand for this analysis, I have swapped them with visits (growth) and revenue (share). The symbols represent:

• C=Clicks
• V=Visits
• £=Revenue

I included clicks as an indicator – and an extra visual – after all it’s those clicks that make me the money!

As you can see from the chart below (I worked as a linear chart to make the differences visible – this may not be the ideal way to present that – I do have my quirks!) the various sites have varying level of success (or failure).

Charting Visits over Revenue

Other Metrics e.g Break Even Point

I would immediately be tempted to start improving the ones that are making me the most revenue, or maybe spending all my time on the ones that don’t bring me any revenue. In order to place the earnings in context, I added the Break Even Point (Orange strike through) to the chart to show me those that were below profit margin. I add loads of other data to visually guide me – in this instance I have done that before the BCG Analysis – I normally add additional metrics after I have categorised the sites into the different points of the BCG and then bunch them together on one chart. These quick view metrics are additional pointers in the decision making cycle.

Adding the Break Even Point

Over Laying the BCG Matrix

Jsut keeping the points, I overlaid the data over my Boston Consulting Affiliate Matrix to see visually how each site fell into the different categories (I should have really labelled those bubbles, call me lazy!):

Boston Consulting Matrix for Affiliate Portfolio

As you can see, the BCG Matrix confirms the data and conclusions from the charts – that the sites that make me the least money are in effect dogs, that the sites with high visits and high revenue are stars. Interesting to note that I have one Cash Cow- which is defined by low visits, but high revenue – an immediate indicator that I can do one of two things:

• Improve the traffic to that site and get much higher revenue – which may involve a lot of work.
• Create more sites that sit in that particular niche as the return is much higher (which is easier potentially than the former solution).

Isn’t the BCG Too Much Work ?

Now looking at the charts you may feel that the extra step of creating the BCG is superfluous – with only 13 sites it is indeed. But my portfolio is over 100 sites, with plenty of plans to grow. With that many sites the original charts would have too much data for me to decipher visually. If I was only analysing 13 sites, then I would probably intuitively mark my chart without the need for the BCG:

Noting the Stars and Cows

The BCG gives me a one glance view as to what I should analyse further.With this visual aid, I can identify profitable niches, high traffic niches, and cut out the excess fat after all if all these sites are of the same age, have the same amount of effort put into them, then aren’t I better of concentrating on the money sites? Of course you need to check these additional metrics against the category “Dogs” to make sure you don’t ignore a brand new site, or get rid of it. At the same time the “Question Marks” are interesting sites – they get the visits, but not the revenue – which means that the monetisation model may be wrong with all other things held equal.

It is at this point I would bunch say, all the dogs, and then add in other data on this chart, such as age of domain, back links, profit etc – this will help mee hone down on “real dogs” to shell.

I hope the model comes to use for at least some of you. I cant say that this may the best use of the BCG Matrix, nor can I say I adapted it well – all I can say that the way I use it works for me.

Protip: You can also use this method to evaluate pots of keywords and make almost similar deductions and improve focuses.

Google Credit Card Comparison

Unless you have been out of the news over the last day or so, you probably have heard that Google has released a credit card comparison service.

Comparison Ads improves the ad experience on Google by letting users specify exactly what they’re looking for and helping them quickly compare relevant offers side by side. There are no long forms for users to fill in, and Comparison Ads will not send advertisers any personally identifiable user information (in fact, we don’t send any user information at all unless the user explicitly applies for an advertiser’s offer).

Basically run Credit Card related search queries and the chances are you will be served up the google service. Although not everyone could see them:

@patrickaltoft – @rishil Have you seen it? I haven’t

While others so the results for decent generic keyphrases:

@erikau –  @patrickaltoft (@rishil) I get it showing for “compare credit cards”

What Do You Think?

Google Loan Comparision (ranking on G via Twitter )

Typically, I asked people what they thought on twitter…

The best response I had was via email from Stephen Murphy, who I assure you plays in this market quite heavily:

Google will be spying the credit card market as an opportunity to earn pay per lead revenue. For the past 12 months I have had Google account managers sending me information on how advertisers have pulled out of the space.

Client reaction has been that this is because of higher delinquency (missing payments for 2 consecutive months) and general concern about a lack of valuable customers within the market. Aggregators such as Moneysupermarket have really suffered because of this – with revenues impacted.

Stephen attributes the drop in profitability because of two types of credit card customers:

• Customers such as transactors – people who buy their shopping on a credit card – but then pay it off immediately. These people continue to use their cards – but make little money for providers.
• Customers such as revolving balance holders – make their minimum payments each month and maybe a little more. These customers are in the decline, because lending criteria for acceptance has tightened.

Stephen has promised to write a more detailed post, which I will link to from here in the next couple of days.

Affiliate Marketing Isnt Dead, But May Be Killed Off

Other interesting replies were based around thoughts that we should all be having – where is it going to stop?

@LeoFogarty – @rishil just wondering if there are going be doing other comparisons outside financial products, I’m thinking more of the travel sector like carhire, flights etc

@jonoalderson – @rishil Another step into their own affiliate network – property, power, mortgages, credit, mp3s. What’s next? Travel, maybe?

(By the way, Google has its OWN affiliate network, in case you didnt know).

Others took it to the hilarious extreme…

@rohanarora536 – @rishil google will start selling vegetables, fruits, grocery, shoes everything. Visit google store 1 destination for all your daily needs

Google Product Search

The more popular the different sources Google creates, the less sites traditionally supporting these services will perform. Which means people relying on them for core income streams need to think again.  For example, I no longer visit third party sites to get movie details – its all there in core search results – great for me, because it solve my problem without incurring an extra step, but bad for the guys who targeted that niche for ad revenue – because I am no longer an impression on their site to rely on.

Google is attacking content creators and affiliates from all fronts – ever come across Product Search? How soon will that become a complete product comparison engine? Its not exactly hard, considering that hundreds of affiliates rely on niche comparison sites for income. Google could wipe them all out with one blow (well maybe).

Time to Find a New Horse to Flog

The only advice I can give you, is to add on Rand Fishkin’s advice:

If Google sends 90% of your traffic, your business has real danger associated with it.

If your thin affiliate sites, comparision models and simple affiliate sites ranking because of SEO are your only income, you need to start planning to diversify or enhance your offerings. Most good affiliates I know are way ahead of the curve, but those newly stepping into the game, don’t come unprepared, because you, my friend are on googles hitlist.

Hey nothing is impossible, after all, google now has the go ahead to Buy or Sell energy!

Resources

• Paul Carpenter does a comprison (excuse the pun, couldnt help it) with Moneysupermarket over at Dave Naylors blog.
• Check out the Credit Card Comparison service from google yourself.