A recent report from The Data Warehousing Institute (TDWI) estimated that poor data quality costs U.S. businesses up to $600 billion a year. TDWI found that company leaders are often unaware of the underlying issues driving the loss, and reported that inaccuracy remains a core problem because it prevents company executives from making effective decisions.

With fierce competition and small advertising budgets, retailers must be extremely cautious with online marketing expenditures. Poor data quality is the number one obstacle for marketers who are trying to make informed decisions about customer acquisition and retention marketing activities – both of which are a top priority for marketers today.

The TDWI report brought to mind a very important issue that I have been evangelizing for years – the difference between session and lifetime-based revenue analyses for measurement of online customer acquisition efforts.

Virtually all Fortune-class companies with an Internet strategy are familiar with session-based revenue analysis for online customer acquisition. The concept of lifetime-based analysis, however, is often an entirely new way of looking at revenue for these fortune-class companies.

Largely, this is because lifetime analyses are hard to perform, requiring extensive data warehousing expertise that is both costly and cumbersome to manage.

To illustrate this difference, I'll walk you through a real-world example.

Let's say that a company chose to advertise on three different sources – Yahoo!, MSN, and AOL – by displaying a single banner ad on each throughout the week of August 11th.

In a session-based analysis, a marketer would calculate whether or not a visitor made a purchase (or made another “conversion” action if the Web site is non-commerce) within the session in which the visitor clicked through on the ad.

The results may look like those below, which would lead one to conclude they should invest more heavily in Yahoo! and cut spending in MSN.

Session-based analysis: (8/11/02 – 8/17/02)