Understanding and using web analytics.

In recent years, website marketers were concerned with increasing 'hits' and the 'stickiness' of their sites. They were concerned with increasing page views and the amount of time spent on the site. This is definitely a hold over from the paper based businesses of the past, and has proved to not be of much use in the fast moving internet world.

As a result, hits and views are no longer considered useful metrics for evaluating website success. They simply don't provide the right kind of information needed by online marketers. Now they look at conversions, drop-out rates, return on investment and revenue per visitor.

Internet marketers of today want to make more money. To do this, they must understand their visitors, their motives, where they came from, what they were looking for, and how they found the site. And most important of all: what made them make the decision to buy or what made them abandon the purchase.

In order to accomplish this, they need a powerful new set of analysis tools; tools that are fast, accurate and easy to use. And most important, these tools must be able to measure performance over time. That is, the marketer needs to be able to set a baseline for any metric and then measure a percentage of increase or decrease at a later time. And the time frame needs to be long enough to show meaningful results ? usually 30 days or more.

Here are a few common problems solved by the proper use of web analytics:

Good traffic, but a high Bounce Rate

A 'Bounce' is a visitor who comes to your site and leaves without looking at any other pages. The number of bounces is compared to those who visit more than one page to give a 'Bounce Rate'. All websites have a bounce rate. Whether it is high or not is relative to the site. Only numbers taken over a period of time will show an average for any particular site.

There are two main problems that lead to a high bounce rate: Attracting the wrong kind of traffic and not giving the visitor what they were looking for.

To identify the first case, open the New Visitors report. This report should contain a list of unique, first-time visitors. The report should also show the first page visited and where they came from. The origin may be empty, due to a number of reasons outside the control of the analytics package. Select a visitor that came from a search engine. Now 'Drill Down' by clicking on the selected line and opening a detail view of this visitor. The detail page will show the search term used to find your site.

Was the search term relative to the subject matter of the landing page? Were they only looking for something free? Looking at a number of search terms will reveal if the wrong kind of traffic is coming in.

If the search terms are appropriate, then the searches are driving qualified traffic to the site. If this is the case, the high bounce rate is due to the page content not properly addressing the visitor expectations.

High Drop-Out Rate

According to Jupiter Research, 71 percent of sites do not analyze customer drop-out rates, even though 66 percent of consumers reported having abandoned a purchase while on a website.

The drop-out rate will show an increase, or hopefully, a decrease with time. A properly designed buying process will capture personal contact information before continuing with the checkout process. This contact information can be used to contact the lost sale and discuss the reasons.

The Drop-Out report should show the visitor, the product and date and time of sale. Select one line in the report and drill down to view the contact information, if available. Call or email the visitor to learn the reasons for abandoning the sale.

Also, the internet marketer should discuss the buying process with current customers. This is an excellent method of increasing customer loyalty. It also provides an opportunity to gather testimonials. Most buyers will have visited several times before they bought. Ask why they didn't buy the first time they visited the site. Also, ask why they came back and what motivated them to buy.

Poor Return On Investment

Probably the most difficult challenge faced by internet marketers is controlling costs. Traffic acquisition can be an expensive proposition, so it is important to get the most out of every click.

The best marketing reports reveal where the money comes from, who the money comes from, and what marketers can do to improve revenues. Marketers can use this information to increase advertisements on sites that reach the most interested parties, provide a better selection of products for different types of visitors, or offer better service to their most valuable visitors.

The marketing reports should show sales grouped by campaign or affiliate. At a minimum, they should show units of sales by product and product options, and preferably revenue.

Compare advertising costs with revenues to identify the most profitable campaigns. Often the marketer will find that one campaign may bring in more visitors, but conversion is low, whereas another might bring in fewer, but more qualified visitors who purchase more.

The use of A/B testing to increase pulling power of ads is vital to keeping ad costs down and attracting qualified visitors. Here, the marketer will find it easy to measure changes and evaluate overall performance. Instead of taking months to identify and understand the effect of a change, it will often show in hours or a few days. This agility means that even smaller e-commerce sites can succeed on limited budgets.

Path Analysis / Clickstream Analysis ? Understanding visitors

Not really a problem, but vital to keeping a healthy web business running smoothly. The marketer is also able to identify new trends and opportunities by evaluating the visitors' interest in various content available on the site.

The ideal path through the site should go from the landing page to the products page to the orders page, from there to the checkout and finally to a 'Thank You' page.

Deviations might include paths to tutorials, articles and other information pages, but these should be kept to a minimum and always lead back to the main path.

Again, the marketer can select a particular visitor, buyer or drop-out and then drill down to the detail page to reveal every page visited and path taken, as well as the amount of time spent viewing each page. Knowing how long it takes to actually read the page will reveal the amount of interest in the subject matter. Combining this information with keyword searches will reveal how appropriate the content of each page is to the visitor's interests.

In Summary

The value of the analysis far exceeds the nominal cost of the web analytics service. Indeed, it may spell the difference between success and failure. Good web analytics packages can be hard to find, but need not be expensive. Increasingly, more and more comprehensive reports are available at better prices.

To be effective, the marketer must understand what to look for and how to apply the knowledge revealed by the analysis. The learning curve is not steep, and the rewards can be significant.

WG Moore is a web analytics specialist with over 20 years of hardware, software and web development experience. Visit http://www.webstatsgold.com for more articles and information on web analytics. You may contact him at will@webstatsgold.com

Copyright 2005 by WG Moore

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