The rising importance of web analytics

The Internet. Started out as a computer network to share information between select individuals in the 1970s and 80s. Today, more than half the world’s population has Internet access and they are using it for more than just information search. From commerce to education to socializing (to list a few ‘offerings’), the Internet has increased its functionalities and transformed into a more robust platform.

As the number of Internet users continues to swell, more businesses are establishing their presence online to reach out and interact with their customers. This means that there is a whole new set of data regarding customer/visitor behaviour online for companies to understand and accordingly optimize their online presence and operations.

­Web analytics – the ‘measurement’ and analysis of people’s behaviour on websites – is what several companies are increasingly implementing. There are several metrics (each designed to gauge a specific behaviour) to consider in web analytics, which are connected to Key Performance Indicators (KPIs). Analyzing the KPIs allows businesses to continue doing what works best for them, and identify areas for improvement and work on them – all resulting in improved online performance.

With almost all the global Internet users on one or more social media channels, brands are also developing their online social presence. This has given a rise to social media analysis, which is similar to web analytics (and could be considered its subset).

 

The metrics

While there are several metrics (whose names vary in different companies) which are parts of different KPIs, they are generally classified in 4 different categories: content analysis, usage, quality and functionality, and referrers.

Content analysis analyzes the content of the website and individual pages – which links get clicked most, the most visited pages, etc. Usage refers to how the users ‘use’ the website, such as the time spent on each website, number of repeat visits, geographic (and demographic, if possible) information. Several websites often contain pages or links which are ‘broken’ or take too long to load, which are analyzed by the quality and functionality metrics. Referrers metrics analyze how people reach the website – through links on other sites or searches via search engines (and the keywords they used to get to the site).

 

Nature of websites and common KPIs

As most metrics are only numerical data, they may not be too useful unless they are tied to certain KPIs, which give the metrics meaning and accordingly allows for analysis in the context of the business’ strategy. The nature of almost all commercial websites is one or more of the following four categories: commerce, content, lead generation, and support.

Commerce sites’ primary objective is to get visitors to make some transaction (for goods and/or services) on the site. Content sites primarily serve as advertising mediums by publishing some form of content or media (they monetize the traffic that goes to the site). Lead generation sites focus on obtaining users’ contact details for market research or to inform people about a company’s (usually third party) new products/services or developments; this is mostly focusing on goods/services that cannot be purchased online directly. Support websites offer help and answers for users’ queries and specific problems. These websites do not help generate revenue, but are important for improving customer satisfaction. Each category of website typically has its own KPIs, which could be similar to those in other categories.

Commerce

Since commerce sites’ priority is to generate and maximize revenue, they focus on KPIs gauging the users’ purchase behaviour. Conversion rate – the ratio of number of users making a transaction to the total number of visitors – is one of the most important KPIs, as well as average customer order value and customer loyalty (the number of time the same user returns to make future purchases). Another important metric is the bounce rate – the number of visitors who visit the site and leave quickly (typically within a few seconds) – which highlights the number of people not interested in the site’s content (due to unattractive website design or poor quality of offerings), hence resulting in lower sales.

Content

Fundamentally, their KPIs measure the level of users’ engagement to the site. Firstly, there is visit depth, which measures how many unique pages in the website the user visits during each browsing session (more pages visited means greater depth, hence greater engagement). Then there is returning visit ratio (usually measured by number of unique visitors divided by total visitors). A low ratio means a greater number of repeat visits from previous visitors. Lastly, there is new visitor ratio (the number of new visitors divided by total visitors) to gauge how well the website is attracting new visitors.

Lead Generation

These websites have certain KPIs similar to the commerce sites. First, the conversion rate – the number of people who share their information divided by total number of visitors; then there is the bounce rate (how many people visit the site and leave soon). Apart from that, there are some other KPIs, such as cost per lead, which measures the total expense (to bring people to the site – usually advertising and marketing expense) divided by the total number of leads generated.

Support          

The most important KPIs for support websites are also those which have been seen in other types of websites; one of them is the visit depth. However, for support websites, higher visit depths often indicates the visitor has not found the help they are looking for quickly and is still looking for answers, which could create bad experience and reduced satisfaction. Similarly, there is the bounce rate KPI. In support/help websites, low bounce rates means that users found what they were looking for and did not leave too soon.

Importance of Analytics

Numbers don’t lie and quantitatively understanding metrics and KPIs through web analytics often help better understand the company’s online presence. Almost every SEO company is increasingly putting customer experience at the centre of their strategy, with the primary focus being customer experience – by delivering (and exceeding) expectations. Understandably, just having numbers is not sufficient, but these KPIs highlight which approaches are working and which need to be changed.

The KPIs also allow companies to better engage with their customers by understanding their online behaviour, resulting in better online presence. In addition, once a proper analytics framework is established, getting insights in real-time becomes easy, allowing the company to be more adaptable, and make informed decisions and changes much quicker.

To put it succinctly, there are several website-based analytics metrics and KPIs being implemented, which are strong indicators of how the business is doing online. Almost all websites can be classified into one or more of the four categories; each website category typically has its own relevant KPI. Every metric is a key component of a particular KPI. By monitoring website traffic and user behaviour, each metric is given a numerical value and is contextualized into its relevant KPI to determine the website’s performance and generally the company’s online presence. Overall, these KPIs guide the company into making decisions and deciding future plans.

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