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What are Website Analytics?

One of the most important principles of modern business and management theory is: “What gets measured is what gets managed.” It follows therefore that if you aren’t actually measuring your website, it traffic and activity, its conversion rates and overall effectiveness, then you aren’t really managing it. 

Website analytics tools are crucial to effective website management, and a number of tools are available to help with this task.

Website analytics encompasses a number of discrete data activities:

  • measurement
  • collection
  • analysis
  • reporting

This is done for the purpose of understanding how a website is used and then bring that understanding to the task of optimizing that usage.

Understand what?

In terms of understanding, a number of factors are usually looked at:

  • what brings people to the site
  • how long to they read each page, how long do they stay
  • how often do they click on ads
  • how do they interact with the menu and navigation system
  • for those who purchase something, what is the average total sale, the average profit
  • what is the average loss from abandoned carts
  • how often are people sharing content to social networks like Facebook - what type of content is more likely to be shared

What are we optmimzing?

Optimization can have many potential goals, which can usually be thought of in terms of either increasing desirable activities or decreasing undesirable activities.

  • increase engagement time
  • increase page clicks
  • increase purchase completion
  • increase cart value
  • increase sharing
  • increase subscription to newsletter
  • decrease bounce rates
  • decrease cart abandonment

In addition to such goal-based optimization, a good understanding of web analytics can be used to prioritize technical improvement. For example, a very slow page load that only occurs infrequently is less significant than a tiny lag that repeats thousands of times a day.

Optimization usually follows a typical pattern:

  • identify an area for improvement, based on current analytics
  • determine several likely candidate solutions
  • use A/B testing to determine which solution provides the greatest improvement
  • implement the solution

Where to optimize: The Funnel

Determining where to focus the effort of this sort of improvement depends on an understanding of what is usually called the “sales funnel” (even though you might not be doing sales, and it isn’t a very good funnel).

The sales funnel is an analysis of the path from not being a customer to being a customer (or some other desirable activity), and how many people make it to each point:

  • 100 people come to your website
  • 70 people search for a product
  • 50 people find what they are looking for
  • 20 people put it in their shopping cart
  • 10 people move toward checkout
  • 3 people complete a purchase

A “funnel” like this can be applied to any situation where you have a desired action which not all prospective candidate will complete.

(In this way it is more a like a multi-step filtration system than like an actual funnel.)

In the analysis above, it becomes easy to see that there is some kind of problem at checkout. Fixing whatever it is that is causing 7 out of 10 shoppers to abandon the checkout process would have a dramatic effect on over success.

Without this kind of analysis,it might be tempting to simply spend more on advertising, getting more people into the top of the funnel. But clearly, that is a much more expensive way to improve sales.

Other uses for web analytics

Web analytics can also be used in a more expanded way to guide overall strategy and planning. Some examples of this kind of use include:

  • Determining what type of content receives more activity, and writing more content of that type
  • Creating products, services, or content based on things already being searched for
  • Using search activity to guide navigational changes
  • Measuring the increase in traffic after offline marketing efforts

Two types of web analytics

Most of what is discussed when people talk about “web analytics” is actually only half the story — on page analytics. Google Analytics and other popular on-page tools, usually written in JavaScript, are providing information to the owner of a website, about the activity on that single website.

The second part of web analytics falls under the historic purview of “market research.” This includes discovering insights such as reach, potential opportunity, and share of voice.

It can also provide a worthwhile basis for comparison. For example — in the example above, it would be helpful to know what the average checkout abandonment rate is across all eCommerce sites and especially for sites serving your particular industry or demographic. 

The 3 out of 10 is actually a very good conversion rather, relative to other online stores, maybe it isn’t the place to start tinkering. On the other hand, if the typical conversion rate is 8 out of 10, it is likely that it’s fairly easy to pick up at least a few percentage points.

Web Analytics Tools

The most popular and important web analytics tool is Google Analytics. Some hosts now offer Google Analytics either alongside or instead of Webalizer and AWStats. What’s the difference?

All of these tools will help you track the number of visitors your website gets, but not in the same way. Google Analytics tracks visitor information using code placed on each of your sites pages and cookies. If that code fails to load, isn’t present on every page of your website, or gets blocked by your visitor’s browser, it may not catch every visit. 

Webalizer and AWStats both use server logs to track visitors, so they are unaffected by loading issues or browsers. On the other hand, Google Analytics provides many more data points then either Webalizer or AWStats. Webalizer focuses on tracking pages, files and hits.

AWStats adds tracking for the types of browsers used, unique visits, and location (based on IP address). Google Analytics does all of these things, but adds information such as how users travel through your pages, how long they stay on your pages, what sites they came from, and much more.

Because Google Analytics does not rely on server logs, it can easily be set up independent of your host.

What about web counters?

The biggest reason not to use a web counter like BBClone or phpMyCounter - or any other self-hosted web counting softwares - is due to the evolution of web technology. Let’s face it - there are a lot of methods today to track engagement and the performance of your website. While counting your visitors is still one of the most important purposes of having a website analytics tool, hosting your own web counter seems unnecessary and ‘old-fashioned’, by Internet use standards.

Instead of wasting time and effort installing and monitoring a web counter, it probably makes the most sense to use a comprehensive website analytics program like Google Analytics.