At the simplest level, these applications offer businesses the opportunity to monitor levels of traffic to their website. The potential for analysis goes much deeper, however, as these applications can be exploited to learn a great deal more. Web owners can see which parts of their site are proving most popular and, perhaps most importantly, work out where action is required.
Taking a look around
The techniques used to analyse visitor data have evolved considerably in recent years. The statistics available today can help guide you to make the right adjustments to how it operates online.
"Asking if web analytics matter to you is the same as asking if your website matters to your business. If you've put a decent investment into your site, you need to know if that investment is paying off, and you need to know how to maximize that investment," says Laurence Veale, senior analyst with web development firm iQ Content. "Basically, web analytics help you answer a simple question: 'Is my site working well? Is it a success?'"
Considering the investment involved in developing a company website, it's vital that businesses know if their money is being well spent. "People are spending an awful lot of money on websites these days. Yet when the thing is finished they have little or no idea what return they are getting on the investment they made," says Jennifer Cullen, director of web analytics firm StatCounter.
"Web analytics act as your virtual eyes and ears online. If you own a traditional shop on a high street, there's two possibilities if you are not making money. One is that no-one is coming into the shop, the other is that people are coming in but not buying," she says. "You can see which really easily in the real world, but online it's not so easy. Visitor statistics let you find that out."
Finding the right information
To find the information needed to inform changes to your website, you need to have the right tools in place. There are many web analytics tools available to help you mine data, many of which are free of charge.
Google Analytics and StatCounter, which is Irish, are two of the most popular free tools. There are also some very exciting tools that present traffic data as video playbacks, such as Clicktale. Whatever method you choose, it's important that the tool yields relevant information for your business.
"The caveat with any tool is that it's often too easy to set up an application and get a load of numbers. What's hard is to determine what numbers to pay attention to, and to interpret them correctly so you can make the right changes," says Veale. "The biggest risk of web analytics is that you buy an application, you get it measuring your site, and then you drown in all the data it provides. So you just end up ignoring it all, or paying attention to the numbers you can easily understand but which may not actually matter."
In order to avoid such problems you should look carefully at what the vendor is offering. Consider the kind of metrics provided, how easy the data is to understand, and how it can have a meaningful interpretation for your business.
Once you download and install the right software you will have access to a wide variety of data. The more sophisticated tools can generally tell you more than just how many people visited your website. You can also learn the physical location of visitors, giving an insight into where your website is proving most popular. On top of this the analytics software is able to tell you what path the visitor took to arrive at your website, such as via another site linking to yours or via keywords used in search engines.
All of this provides you with a picture of how and where people are finding your website online. Analytics tools are able to collect all of this information by analysing the movements of visitors to and from your website; this is done in a method that is secure and respects the data privacy of all users.
Taking affirmative action
There's little point in gathering reams of information if you aren't going to use it. The data available through web analytics tools needs to be used to improve how your business operates. "If you're making the effort to track the key performance indicators for your site and deriving insight from those numbers, then you need to be actively making design improvements to the site on the back of that data," says Veale. "If you're only using analytics for some end-of-year report, then you're doing your business, your website and your customers a dis-service."
Web analytics can help your business react to customer trends. By using data on factors such as the time and dates visitors arrive, you can better use your resources. In the case of an online shop, for example, this can leave the business better placed to adjust stock levels because it should be easier to anticipate busy and quiet periods. "Analytics allows you to prepare for any potential surges in traffic," says Cullen.
The data can also help you readjust your target market. If your target market is the UK but you are getting more interest from the local or continental European markets, then it's a sign the website may need to be changed to better reach your desired audience. Conversely, you may make a business decision to focus on these markets based on potential demand.
These tools can also help you better balance your budget. Data available through analytics tools enable firms to see what drew visitors to the site. This can help you to better focus advertising expenditure to more productive avenues. "If an ad is having no impact then cut that out of your advertising spend," says Cullen.
"Until people realise the information they can get they won't appreciate what's available, but those that do soon find they can't live without it," she says.