At the end of the year, we try to make all kinds of predictions, and if we’re right, we’re happy, and if we’re wrong, we’re okay. Let’s take a look at some of his predictions for the conversion rate optimization industry.
1) Web redesigns can be a disaster for businesses
2) Personalization will be the new battleground for websites and testing platforms
3) Google’s new optimization platform will disrupt the market
4) Testing will extend beyond site optimization
5) A beta/personalization vendor will IPO
Every January for the past five years, I’ve thought: “This is the year transformation optimization goes mainstream.”
Not just another process occasionally used for marketing or Web design — but a mindset that is at the heart of how every company operates and grows.
But it never got the treatment it deserved.
Transformation optimization has been around for a long time: data-driven companies like Facebook are leading the way, and more companies are being tested than ever before. Transformation optimization has become big business: not just the brands that embrace the idea of “test and learn,” but also the software and service companies that support them.
But there is still a long way to go. That was my prediction years ago…
1. Web redesigns can be a corporate disaster
Most brands still redesign their websites within 3-5 years.
We’re not big fans of redesigns. They are often unfocused, unmeasured, “best practice” disasters that are antithetical to the concept of continuous improvement we are committed to promoting. (That’s why our creative team doesn’t redesign — they focus on testing).
Two years have passed since Marks&Spencer’s website redesign, which cost £150m and reduced sales by 8%.
But they won’t be the last — most brands still redesign their websites over a 3-5 year cycle. At the same time, companies like Amazon never really “redesign”; they optimize, test, and iterate.
2. Personalization will be the new battleground for websites and testing platforms
“Personalization can be a competitive advantage for brands.”
I have a love-hate relationship with personalization.
It provides A great opportunity for companies with A strong A/B testing foundation.
But if you don’t build that foundation, if you don’t know which segments to target, what motivates them and what discourages them, then you run the risk of creating a sub-optimal experience.
But for brands and the software vendors that support them, the personalization market can and should be huge.
For brands with mature test plans, personalization offers a way to extract more value from visitors. They already know, from their A/B tests, that visitors behave differently: some will respond positively to the tests, while others may be neutral or negative. Personalization offers a solution to this problem and opens up huge new growth opportunities.
Most importantly, it can be a competitive advantage for a brand: while competitors may learn or copy your site testing, they won’t know everything about your personalization strategy.
Similarly, for the test platforms themselves, their survival depends on the success of the personalized product. A/B test platforms are all based on the same premise and can easily switch to another.
But personalization offers huge opportunities for software vendors. They can differentiate between platform complexity, ease of use, and potential AI support.
Most importantly for software vendors, it’s hard to jump from one personalization to another: the more data they collect, the more complex the setup, the more value they add, the harder it is to leave, and the more the vendor gets.
3. Google’s new optimization platform will disrupt the market
“Google’s biggest opportunity is to create an omni-channel testing platform.
Sometime in 2016, Google will publicly launch a disruptive test platform.
Ten years ago, they launched Google Web optimization tools — which allow anyone to do A/B testing without A five-figure monthly price tag. GWO has retired and been replaced by a much weaker product, the content experiment, but all that is about to change.
Google’s new test platform is rumored to be beta, and its launch will break the market. At the very least, it will generate great interest and attention, as more people will be able to identify optimization opportunities.
But we don’t yet know if it will be a “me too” product — perhaps with some extra features (like multi-modal support for content experimentation) — or if it will be a game changer, as GWO was a decade ago.
Google’s biggest opportunity is to create an omni-channel testing platform: user acquisition, conversion, and analytics. They have a huge competitive advantage – Google has the market say in analytics and online advertising. Through the two-way integration of the two, they can not only bring more people testing, but also bring strict theoretical support for online advertising optimization and testing.
Right now, the focus of transformation optimization and testing is on the website — but brands spend 99 times as much on driving traffic to their site as they do on optimizing their site itself. Google is well positioned to take advantage of this.
4. Testing will extend beyond site optimization.
“There will be opportunities across all channels: from advertising to CRM.”
The concepts of testing and continuous improvement are not unique to transformation optimization. Interestingly, transformation is already affecting complementary disciplines like SEO and PPC.
This has already begun. In January 2015, Pinterest posted about successful SEO A/B tests. Then, in December, He released a server-side solution for companies that need SEO segmentation testing. Also on PPC, Brainlabs has developed A/B lab that allows you to do A/B testing on marketing structures, bidding software and even different PPCS.
This will pick up pace in 2016. Channel wide opportunities:
At the top of the channel, advertisers can take advantage of site optimization insights and processes. By analyzing the same qualitative data to tell tests on the site that content motivates users, advertisers can create more compelling and persuasive ideas. They can then increase the complexity of their AD testing: not only in PPC, but even in TV and outdoor, the traditionally untested advertising space, “half of what I spend on advertising is wasted, the problem is not knowing which half.”
At the bottom of the channel, brands can again leverage site-optimized insights and processes to increase customer satisfaction, loyalty and lifetime value. By understanding the principles that motivate users to become customers, and by applying the principles of testing to CRM — brands can test and optimize each customer’s touchpoint.
5. A beta/personalization vendor will IPO
“Optimizely has a big market share in optimization, and capital is driving personalization.”
If the predicted “softening” of the technology market allows, we will see a pure beta and personalized vendor preparing for an IPO.
The main contender is Optimizely. They have market share in optimization and invest heavily in personalization.
Instead, they have the opportunity to become a takeover target. Interestingly, Salesforce Ventures invested in both Optimizely and Qubit in October 2015. (Just a few months since Maxymiser was acquired by Oracle in August 2015)
Any IPO or acquisition will depend on the success of either company’s personalization service — as noted above, their monthly recurring revenue can multiply if they do it right.
This article is compiled by Zoran@Shout Technology.