When speaking at events I am sometimes accused (light heartedly) of drinking too much of the Google Coolade – meaning I endorse the good parts and skip/skim the pitfalls. However this post is a criticism of Google for what I consider to be a flawed thinking with their recently announced support of multiple currencies in Google Analytics.
What is this new feature…?
As described in their official blog post, this feature is aimed at organisations that transact in multiple currencies e.g. USD, GBP, Euros, SEK etc. Google’s recommendation is to create a separate copy profile were your transaction amounts are converted into a single currency – say all USD. This is achieved by pulling a currency conversion rate from Google Billing and automatically applying this to your transaction data in your profile. The conversion rate is the daily exchange rate of the day before the Google Analytics hit date.
This sounds like a good thing, right? I get all my transactions converted into a base currency so I can see a global overview of revenue performance…
Why this is flawed
Superficially this approach sounds like a good idea, but it’s flawed. Let me explain my thinking by posing the following question:
How does collecting data in multiple currencies, adjusted according to daily exchange rates, help me benchmark/optimise my website’s content, or its marketing efforts?
For example, if my “standardised” revenue starts to go down, how will I know if this is due to a poor conversion process (page content, load times, usability issues etc.), or a defective campaign? It could just be a fluctuation in the many exchange rates. As a case in point, the GBP recently dropped 15% against your Euro in one day. See also http://www.bbc.co.uk/news/business-16424802.
What’s the alternative…?
I use the following, trusted approach for multi-currency websites:
- Create a separate rollup account for your combined data.This includes combining all data – pageviews, events, and transactional data. I detail the rollup technique in an older post (also see chapters 6 and 9 in the book for a more up-to-date description). It’s pretty straight forward and essentially is just adding a second carbon-copy instance of the Google Analytics tracking code to your pages, but with a different account number.
- For rollup transaction data, use a FIXED currency exchange rate.
By fixed, I mean set once and forget. This is the most important part – do NOT adjust for currency fluctuations. Therefore, if your business reports globally in Euros, convert your USD transactions into Euros when the Google Analytics data is collected. For example, Euro_amount = USD_amount x 0.75, could be your fixed conversion rate.
Using this method, there is no complicated “backing-out” of exchange rate fluctuations to do (which is a very complicated task in the first place) in order to know whether a change in the data is a good thing e.g. your marketing is working, or not.
In this way, the performance of your website(s) is what you measure
– not the performance of the currency markets.
Why this should bother you
Regardless of the audience, a message I always attempt to get across is the importance of using data for “actionable insights”. That means if you cannot take action on the data, or gain insights from it (i.e. a better understanding of your website), then that data is just noise.
Any feature that adds to the noise (and causes confusion!) needs to be avoided. Unfortunately that’s what this new feature does by default.
There is so much data noise available from even the smallest and simplest of websites that often people feel overwhelmed. It results in measurement paralysis and so the organisation makes no serious investment in web analytics because of this. This is a tragedy in my view and it still holds back the web measurement industry.
BTW, be aware of the other Google flaw I comment on – the issue of “not provided” keywords. Whilst both of these are important, lets keep this in context. This post is not about Google bashing, its about ensuring those of us using Google Analytics are able to make informed decisions about our data… After all, we do all love actionable and insightful data 😉
If you feel Google multi-currency support feature really is advantageous to your organisation, please let me know your thoughts via a comment.