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“You cannot improve what you cannot measure” is an age-old truth, which for some reason seemed to be oblivious to marketers who tended to operate in a vacuum. However, web marketing has altered all that, with the availability of sophisticated tracking tools and making marketers more accountable to questions on ROI. As web marketing technology has advanced, so has the domain of web analytics, which is now a sizeable industry in itself.

For anybody serious about using online marketing, web analytics is indispensable. It helps one truly understand their website users: who their users are, what they are looking for, how long, where do they come from and where do they exit the site. This kind of in-depth knowledge about site visitors is critical in making objective and informed decisions about a site, rather than basing critical decisions on somebody’s whims and fancies, an all-pervasive problem that continues to exist even today in many organizations.

At a very broad level, web analytics will help you to:
• Define or modify your content strategy: Are you providing the right amount of information to your users? Is it good quality information? Are visitors immediately exiting a page? These questions can be easily answered with the information provided by most of the common web analytics tools.

• Define or modify your web marketing strategy: Are the right kind of users landing up on your website? For example, if you notice that your primary target market is residents of California, but the traffic to your site comes from Chicago, then there is something not right. Or, for that matter, if all the conversions on the site are happening due to organic search engine traffic, but you are spending a lot of money on paid search marketing, then it is a clear indicator that you need to address your paid search marketing efforts.

• Evaluate the efficacy of your website’s user interface and usability: How does the placement of a particular link or addition of a new visual element impact the conversions on your site? Are users getting lost in a maze and not performing a desired action because they are not able to? Click-streams from your website should give quite a good evidence on some of these problems.

• Identify and fix technical problems: Very often, several technical problems on a site go unnoticed, which may be preventing users from performing the desired actions and driving them away. Keeping a close watch on web metrics ensure that you can quickly detect problems and fix them to minimize the damage to your business.

The web analytics challenges
Let’s face it—despite the burgeoning online marketing industry and the consequent demand for web analytics, the proportion of people using web analytics optimally is relatively small. There are a couple of factors dictating this.

• Cost: Or rather the perception of cost. True, the really high-end web analytics tools that can provide all kinds of information may cost quite a sum, but most companies can make do without these. There are a host of reasonably robust web traffic measurement tools that are either available for free or a nominal fee. Investing a small amount in these tools is more than worth it.

Last year Google integrated web analytics tool Urchin into its product offerings and is now offered free (Google Analytics). While it is by no means the best analytics tool, the level of information it provides is more than sufficient for small to medium sized companies to evaluate their websites, understand their web usage patterns and take appropriate action. For marketers advertising with Google Adwords, reporting tools from Adwords together with Analytics is a powerful combination.

• Understanding web analytics: This is probably an even bigger challenge, because a lot of people find it difficult to understand the whole slew of numbers that these tools offer.

Professional web marketers with a solid experience in deciphering web traffic reports can add considerable value in this regard. If you are outsourcing your online marketing to a company, it is important to understand the measurement capabilities possessed by the agency and how they use it.

Defining key metrics
It is important to understand that web analytics tools do not provide everything to you on a platter in clear black and white. What you will get is a lot of information, which will need to be analyzed and interpreted to enable effective action.

Also, with the volume of data that is available today, it can be very easy to get sidetracked and spend a lot of time evaluating numbers that may not be as relevant. Therefore, one of the most important things to take note of when using any web analytics tool is to clearly define the key metrics that you want to have tracked. These are the metrics that really impact your business: for eg., page view may have considerable weightage for an online publication operating on a cost per thousand (CPM) impressions advertising model, but it is not half as relevant for a consultancy service.

You should also ensure that the tool’s definition of a particular metric is in sync with the attribute that you want measured; else, your decisions will be based on erroneous interpretation, the consequence of which are seldom desirable.