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What You Need to Know
Many measurements can be derived from the operation of a Web site. Those responsible for operating the Web site, developing content and driving business value from the site have different needs, but there are interdependencies. Focus on defining the needs for each constituent, then develop a tool strategy that balances the potential return on investment with the solution's cost, sharing solutions across roles where practical.
Analysis
Web analytics refers to the products, services and processes that focus on the use of Web-based applications. There are different users of Web analytic tools, including the IT operations group, content and application developers, and business managers who sponsor the site. Each role has its own requirements and each vendor offering of Web analytic tools addresses one or more target markets, making it difficult to choose the solution that is right for you.
Web Site Metrics
These are the most basic requirements for analyzing Web use. The requirements center on delivering Web content to users, and the results are most useful to the IT staff that operates the Web site. The reports are useful for capacity planning, load-balancing content and network traffic engineering. The raw data to produce Web site statistics, typically delivered as a log file, is standardized by the World Wide Web Consortium (W3C). Typical statistics are broken down by time of day, and include number of hits, megabytes of data transferred, top 10 pages viewed, Internet address and domain of visitors, errors and browser statistics.
Visitor Behavior
Beyond the basic knowledge of how a Web site is being used, it is useful to understand how users are behaving on the site. Web site designers and business managers use behavior information to judge the quality of site design and the impact of changes. The information about visitor behavior is calculated by combining site metrics with other dimensions, such as user identification through the use of Internet Protocol addresses or cookies, and categorizing pages into topic and function areas. Reports about visitor behavior, called "click stream" or "path analysis," reveal common paths through a Web site, popular entry and exit points, where users come from, session length and frequency, unique and repeat visitors, and demographic information.
Web Channel Analytics
Each function within a Web site has a purpose (or at least should have). A Web site may represent a new or an alternative channel to accomplish a business goal. In either case, it can be valuable to analyze the Web channel from a business perspective and then optimize the channel to meet business objectives. Web channel analytics includes site metrics and information about visitor behavior, but it goes beyond that. The value achieved from the site is measured, and the results are used to optimize the site's offerings. Value may be measured in terms of customer acquisition costs, lifetime value, results of merchandising efforts and revenue produced by the site. Decisions about which products to offer and at what price are refined using channel analytics. Data cubes, data mining and predictive analytic tools are used to obtain results. Merchandising programs, such as e-mail campaigns, search engine optimization, and television advertising are analyzed for the impact (see
"Overstock.com Optimizes Its Site With a Web Analytic Service").
Customer Relationship Management
Visitors to a Web site may also interact with a company through other channels. For example, a customer may interact with a salesperson, visit a store or call a customer support center. Most companies have a customer relationship management (CRM) system to keep track of customer information, profiles and history of transactions. If the customer's Web activity is left out of the CRM system, it leaves an incomplete picture of the customer. Web analytic tools do not yet play a big part in linking a Web site to a CRM system. Less than 10 percent of companies integrate data between their Web analytic and CRM systems. Most of the integration that links the Web channel to a CRM system is accomplished directly by the application, which ties user transactions to their customer records. There are several opportunities, however, to link Web analytic information into the CRM system. For example:
- Record where a customer first came to the Web site from so that better customer acquisition strategies can be developed
- Correlate Web site visits with eventual sales to understand the cross-channel activity of your customers
- Monitor the shift of support costs from a call center to a self-help service on the Web site
Integrating Web metrics with a CRM system is accomplished with data integration tools that extract data from a Web analytic database. There are also examples where companies have loaded CRM information into a Web analytic data warehouse to enhance channel analytic reports. For example, if a customer calls a support center with questions about the Web site, the support person can pull up the recent Web history for that customer and review what might be wrong.
Business Intelligence
If you use business intelligence (BI) applications, you may find value in using Web analytic data as additional dimensions within BI reports. We have seen only a few examples of this; however, as companies adopt balanced scorecards and other metric-based approaches to running their businesses, many of the Web analytic metrics can be used to measure strategic initiatives. It's not difficult to move data from Web analytic online data stores into a data warehouse, after it has been preprocessed by a Web analytic tool. That is the correct approach. It is impractical to use data integration tools to process raw Web logs, because there is a lot of domain-specific rules involved in filtering bad records and transforming logs into sessions.
Other Web Site Metrics
There are other measurement activities that may be used to help optimize a Web site. These tools usually have little direct integration with the Web analytic tools, but can add context to Web site and behavior statistics.
- Internet Market Intelligence: Several vendors measure overall Internet use by loading spyware into user systems or monitoring packets as they pass through Internet service providers' networks. User demographic information, including age, gender and geographic location are combined with destination information and segmented by industry. The reports about Internet traffic can be used to correlate site traffic against industry averages. Some vendors can deliver personalized reports that show where users have been directly before visiting a site, and where they go after they leave a site.
- Application Response Time: Measuring the time it takes pages to load is traditionally considered an IT metric, but the information is also useful for content developers and business managers. Users behave differently depending on the speed by which they access the Internet, the speed that certain pages on their site load and the consistency of performance. Measurements can be accomplished with in-house tools or through outsourced service providers. Some vendors that measure response time can correlate the response of your site with other Web sites in your industry.
- Web analytic reports can be produced with purchased products or outsourced to an application service provider.
- Many organizations use different Web analytic products for their internal and external needs.
- The price for Web analytic solutions range from free open source solutions to more than $1 million per year.
- The return on investment varies greatly, depending on the nature of the Web site. Shopping cart sites usually see the best return on investment with Web analytic tools.
- The most-common vendors on companies' shortlists include Coremetrics, Omniture, Sane Solutions, WebSideStory and NetIQ (WebTrends). There are more than a dozen other vendors offering Web analytic products.
How can business managers obtain a return on their Web analytic investments?
| BI |
business intelligence |
| CRM |
customer relationship management |
| W3C |
World Wide Web Consortium |
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