Web Analytics 101

by Ron Jones

PART 1

I'm still amazed when I run into prospective clients who are considering a Web site redesign, or some form of Internet Marketing, without utilizing the essential power of Web analytics. These people are like doctors who assume they know what's going on with a patient and start writing prescriptions before bothering to examine or diagnose. Without looking under the hood to see how your Web site is performing, and learning more about the people visiting your site, you're throwing away a huge opportunity.

Set a Goal

A couple years ago, we helped a client with a redesign of their e-commerce site. We developed a strategy that funneled visitors from entry pages all the way to the page where they purchased.

The goal of having visitors do something you want on your site is commonly referred to as a conversion.Through monitoring our site analytics, we observed that visitors weren't making it to our conversion page. We went back, made some minor adjustments, and increased sales by 578 percent. Can you feel the power?

I can't overemphasize the importance of identifying site goals and having an overall strategy. Use your analytics tool to see if you're achieving your goals. Make the necessary course corrections based on your observations. Lather, rinse, repeat.

If you don't set proper goals and observe the progress toward those goals with Web analytics, you're throwing huge opportunities out the window.

Hits, Visits, and Conversions

I was recently asked to do a Web analysis for a prospective client. I was told the site gets about 200,000 hits weekly. While this number sounds impressive, there's a big difference between a hit and a visit, and an even bigger difference between a visit and a conversion.

A hit is generally defined as a server request for each item on a specific Web page. This includes images, animations, and downloads. In addition, when a browser loads a page, it also loads any components that page uses, such as style sheets, JavaScript files, or rollover images.

Opening one page of your Web site can result in many hits. You might be surprised to find out how many items it takes for a browser to render each page of your Web site.

People who use the word "hits" are often thinking about the amount of traffic to their site. The number of visitors and/or visits is a much better metric.

A visit is defined as a person who lands on a page of your Web site, navigates to other pages, and eventually leaves. This whole process is counted as one visit. This metric makes more sense because you can report how many visitors you had to your Web site and how many items were requested by the server from each page of your site.

Other metrics to track related to visits: new visitors and returning visitors. These metrics help us analyze how many "new" visitors you have compared to those who are returning for another visit.

Finally, conversions represent the number of visitors to your Web site who completed a pre-defined goal or action. If you sell widgets on your Web site, then conversions could be defined as the number of visitors who made a purchase.

This is the most important metric to understand because it tells you how much value and overall benefit your Web site is actually delivering. For more basic definitions, check out Frank Watson's article on "Tacking and Analytics 101"

Page Views and Time on Site

Visits can also be broken down into parts that help us learn more about visitor behavior. During each visit, you can see how many pages of your site were viewed and how much time the visitor spent on them.

Time on site is sometimes referred to as "stickiness." In general, you want visitors to stick to your site and stay as long as possible (and visit as many pages as possible). With the right setup and analytics program, you can see which pages the visitor looked at and in what order.

Hopefully you're beginning to see what a Web analytics strategy can offer you. These simple metrics should teach you a lot about what your visitors are doing, so you can make the necessary course corrections on your site to help increase visitors, pages views, and time spent on the site.

PART 2

Before we look at specific tools, I want to cover a couple more principles I didn't get to in "Web Analytics 101, Part 1" .When using Web analytics, it's easy to get caught up in all the numbers and statistics and lose sight of the overall goal -- getting the intelligence you need to make effective adjustments to your Web site and online marketing strategies to increase the ROI your site delivers. It doesn't do any good to use Web analytics to produce cool charts and reports but then fail to make adjustments to improve your site's performance!

To illustrate how Web analytics can be used to make decisions to improve the effectiveness of an online marketing strategy and the performance of a Web site, consider the following examples:

  • Analysis: Site visitors are abandoning a sale during a particular step in your site's checkout process.
    Strategy: Look for ways to improve or eliminate that step in the checkout process.

  • Analysis: A particular e-mail campaign produces a lot of traffic to the landing page but very few sales/conversions.
    Strategy: Look for ways to improve the campaign landing page and/or e-mail content to encourage more conversions.

  • Analysis: Several different PPC campaigns are producing mixed results.
    Strategy: Eliminate or focus on improving less effective campaigns and continue with effective campaigns.

Measuring Your Site's ROI

Entire books have been written about this topic, so don't expect to understand this in detail at first. The basic idea is fairly simple and I've summarized it below:

1. Set trackable goals/conversions for your site (emphasis on the word trackable).

2. Assign a value to each goal/conversion.

3. Use analytics to track the number of conversions and the associated source (e.g. sales revenue from natural SEO, paid search, e-mail campaigns, etc.).

4. Compare the cost of each traffic source against the total conversions/benefit generated by that source.

5. Use ROI data to make adjustments to your site and online marketing strategy.

Two Flavors of Web Analytics: Log Analyzers vs. Tag-Based Analytics

Web analytics tools come in two basic flavors: log file analyzers and tag-based tools. Log analyzers don't require any changes to Web site code -- they use the log files that your site generates automatically and analyze this data to produce reports and charts.

On the other hand, tag-based tools require the addition of some (small) code to each page of your site you want to track. These tags send information to a database/server, which then uses the data for generating analytics reports. In general, log analyzers tend to be software that is purchased and installed, while tag-based analytics programs tend to be hosted on another site and accessed via a Web browser.

Neither of these flavors is fundamentally better than the other. Tag-based tools, like Google Analytics, seem more popular recently. If you don't have much control over your site code, however, a log analyzer might work better.

It's important to understand the difference and what needs to be done to implement each type. In the end, this shouldn't be a huge determining factor in picking a Web analytics tool.

Let's look as some basic and advanced tools.

Basic Tools

Basic Web analytics tools are ideal for personal or small sites. I'll quickly review three of the most popular ones: Webalizer, Statcounter, and Mint.
  • Webalizer: A good free solution for anyone who wants to control the data and keep it on their end. However, Webalizer is rather data intensive. It displays some graphs but is mainly tables of data. Basic stats include number of visitors, referral, search term, entry and exit pages, hourly traffic, and basic geographic information.

  • StatCounter: This tool has similar stats, but provides more detailed information, including visitor paths, returning visitors, browser data, operating system, and IP. StatCounter is a hosted solution, which means you have to paste a line of code into every Web page you wish to track. StatCounter has more graphs than Webalizer and allows you to export your data into an Excel file.

  • Mint: Like Webalizer, Mint must be installed locally and only works with Linux servers. It's a little more robust and easier to use than Webalizer. A unique feature of Mint is "peppers," which allow you to plug-in features that other developers have created, like conversion funnels. It also allows you to view your stats through RSS instead of logging into Mint each time. The downside: a $30 one-time fee to use. Overall, Mint is great balance of general, yet detailed statistics.

Advanced

Many advanced analytics solutions allow you to track conversions, goals, revenue, expenses, etc. These solutions aren't for the faint of heart; they're designed to provide detailed metrics to make decisions on the best way to make improvements. For space reasons I'll cover only two: Google Analytics (formally Urchin) and Omniture.
  • Google Analytics: This is the most robust solution for its price, which is free. It can track campaign conversions, goals, visitor performance, basic ad A/B testing, and content performance. It's a tag-based solution that boasts all the features that basic providers have, as well as a site overlay and flexible dashboards.

  • Omniture Sitecatalyst: If you spend a lot of money on online advertisements and are in a competitive industry, SiteCatalyst may be your solution. SiteCatalyst is great if you're looking for more flexibility and need go beyond what Google Analytics can provide, but with a price. SiteCatalyst starts around $1,500 to $2,000, but the data it provides can be easily justified. One great feature is comparison, which allows you to compare different campaigns and groups to see how they're doing against each other, so that campaigns can be optimized.
There are many other options, which also vary in price. Consider HBX, WebTrends and Lyris (formerly ClickTracks).

Take a close look at what your needs are and find a tool that's good match. Let me reemphasize the importance of first establishing goals and then using these tools to help measure against those goals. A good analytics strategy is very well worth it.


BIOGRAPHY
Ron is President/CEO of Symetri Internet Marketing, which provides strategic SEM consulting and training. Ron is actively involved in the SEM community and speaks at conferences and seminars, as well as hosting regional SEM events where he provides participants SEM training and education best practices. Ron also serves on the Board of Directors for SEMPO and is also one of the authors for the SEMPO Institute Fundamentals and Advanced courses.



Certified by SEO in Practice
Certified by SEO in Practice
Certified by SEO in Practice
Certified by
SEO in Practice