What is Web Analytics? Web analytics is the measurement, collation, and analysis of web data, used for enhancing web pages and optimizing usage. Web analytics monitors the traffic to and use of different pages and features on a website. This allows reports on how many visitors to your site read the top articles, or whether they came directly or through a search engine query. This information is termed â€˜clickstream data'. It can be combined with other information you have collected on your customers or target audience, and be used to tweak your website and marketing strategies. At a fundamental level, it's the equivalent of major retailers and supermarkets tracking customer movement around stores so they can decide where best to locate products in order to maximise sales. Traditionally, web analytics is seen as a dull business, with masses of data to be trawled through in order to make often minimal adjustments. However, current software is far less complicated and businesses are far more skilled at using it. Companies have modified their data collection methods and are more critical and strategic in the way they utilize this information. Experts agree that, to be successful, organisations need more than just good analytics technology. Investment in staff and the implementation of processes which ensure the proper dissemination of information is crucial to the effectiveness of analytics. Respected analytics commentator Avinash Kaushik recommends that companies invest nine times more in web analytics personnel than you do in software etc. People with experience in web analytics are in high demand from all sorts of businesses with online platforms. The launch of free measurement tools has enabled smaller businesses to make the most of analytics. In particular, the release of Google Analytics in 2005 has greatly increased awareness among small to medium enterprises (SMEs). It has also benefited larger businesses as suppliers of paid-for products have had to look closely at how they add value when customers have a free alternative. It is believed that around 1m sites were using Google Analytics at the start of 2008. This number is sure to have increased. What Can I Measure? There are a number of elements that can be measured through analytics, but you don't want to be overloaded with data. Identify key metrics that you can make a difference to your business. Popular pages Entry pages Exit pages Came-from Keyword analysis Search engine referrals Visit length Country/State/City/ISP Browser System This information can be invaluable in identifying problem areas and opportunities. You can see browsing habits, where you're getting your traffic from and what they were searching for. There are two ways of tracking visitor behavior; â€˜Page Tagging' and â€˜Log File Analysis'. Different analytics providers use different methods. Which works best is debatable. A combined approach may be a good idea. Why does Web Analytics Matter? As Jim Sterne, an authority on analytics, says: "You can't manage what you don't measure." Many businesses have already discovered the benefits of â€˜360 degree' data. Spending on these analytics as increased as costs have fallen and more business are beginning to appreciate the potential for profit margins. Online retailers especially are taking advantage of the tools to gain a competitive advantage by gaining insight into consumer behavior. It is strongly related to usability. Paying close attention to analytics keeps online users happy and generates sale and repeat custom. The smallest increase in the conversion rate can make a huge difference to the bottom line, so small details tracked in analytics can be crucial. So, what can web analytics do for you? Drives Sales - answer key questions such as, which offers are working, which brands are popular, which products cross-sell and where on the page is best to place certain items. This knowledge can be used to convert more visitors into customers. They can also be used to refine email marketing and ad campaigns. Improve User Experience - otherwise hidden issues with your website can be revealed through analytics. Learning how your traffic navigates the site allows you to make it easier and keep your customers happy. Optimize Efficiency - learn which marketing methods are working, which need more investment and which are not making good returns. This allows you to focus on the important matters and concentrate on converting. You can also compare your own website to that of your competitors. Inform Decisions - analytics may help identify opportunities, evaluate the potential of investments and anticipate future trends. Results of Analytics Analytics can yield great results if used properly, but this requires knowing what to do with the data you collect. There are on-site factors and off-site factors which need to be considered. Knowing that 90% of people drop out of the checkout process is one thing but understanding why this is happening will need more than just data. You'll need to scrutinize consumer behavior, put yourself in their position and identify the reasons why the drop-out is so high at this stage. Off-site information includes what search terms users enter into engines before landing on your site. It's important to keep an eye on this to inform your SEO efforts and internal linking (to drive traffic from well-ranked pages to monetized areas). Terms that bring traffic with high conversion rates are more useful than terms that bring more traffic with less sales. Focus on those terms that lead to fulfillment of goals, whether that means sales or subscriptions or otherwise. Once you've identified the search terms that are most pertinent to your conversion goals, you can optimize those landing pages, and your Google listings to drive more visits and more sales.