May 25, 2011

Why Web metrics are important

The power of the Web is astounding. As an extension of other sources, or perhaps as the only source, the informational, operational, and marketing aspects of Web media are potent. Having a Web presence is not sufficient, though. e-businesses must exploit the latest technology and evolve more quickly than their conventional competitors and customers or risk getting left behind. Recognizing that Web site behavior has a direct effect on business success and customer loyalty, companies are now required to better understand their users so that their sites are responsive, easy to navigate, and present what the users are interested in purchasing. However, many e-businesses have little or no idea what customers and potential customers are doing on their Web sites. Web sites that are slow to respond and contain hard-to-find items will drive away customers. To justify Web site changes, though, using the right quantitative and qualitative information is essential in optimizing a site, which means there is a growing need for new tools that analyze Web site effectiveness -- that form of analysis is known as Web analytics.
Consider this scenario: If a Web site is promoting a sale through advertisement that is valid for only one day, the Web site owner might want to know if the campaign was successful. One indicator would be whether the campaign generated additional site traffic. The following Web metrics chart can help illustrate whether or not the campaign was successful in generating increased Web traffic on the day of the promotion.
Web analytics is the monitoring and reporting of Web site usage so that there is a better understanding of the interactions between Web visitor actions and what the Web site offers, as well as leveraging that insight to optimize the site for increased customer loyalty and business benefits. Web analytics can assist with the following tasks:
planning Web infrastructure capacity to handle future growth;
understanding qualities of new and repeat visitors;
targeting offers and campaigns to categories of visitors;
determining appropriate investment in online advertising campaigns versus other channels;
identifying which e-business partners to work with based on generated referral traffic and realized profits;
decreasing investments in, or altering the navigation to, Web pages that get little traffic;
and much more.
The diagram below illustrates how Web analytics can be used in an organization:


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