Marketing students should all be familiar with the quote from 19th century US merchant John Wannamaker, who said “I know that half of my advertising budget is wasted. The trouble is, I don't know which half".
Fortunately in the 21st century marketers don’t have to rely so much on guesswork or outdated metrics for assessing the impact of their campaigns. One of the big questions in marketing surrounds the return on investment from websites and wider internet marketing campaigns. With more money being allocated to web promotion it’s not surprising that businesses are paying more attention to how their websites are actually performing.
With these questions in mind several technology companies, most notably Google, have developed powerful analytics software systems. So what is web analytics and why is so important for businesses?
Getting started
In a nutshell, web analytics is ‘the measurement, collection, reporting and analysis of internet data to understand what website visitors are doing on your website’. Onsite analytics, the most common form of web measurement, allows website owners to track a website visitor’s interaction on their website.
Google’s service is perfect for small to medium sized businesses who require an effective and easy to use online measurement system
While there are a multitude of competing web analytics providers, Google offer the market leading service in the form of Google Analytics. Google’s service is perfect for small to medium sized businesses who require an effective and easy to use online measurement system. It’s also free and easy to use, factors which have helped Google Analytics become the most widely used online measurement program - currently in use at 57% of the world’s top websites.
Using analytics for business improvement
The most common use of web analytics is to find out where your website visitors are actually coming from on the web. Analytics reports allow marketers and businesses to test the performance of their wider marketing campaigns, by showing how many web-visits came from online advertising campaigns, paid search activity and referrals from emails and other online media.
Reports can even tell you where your web visitors are actually located and can show which countries, cities and regions are generating the most web traffic for your site.
The second main use of web analytics is to test the interaction that users have on specific websites. This is a very valuable tool for businesses as they can gain valuable insights into how their website visitors are using the site. As shown in the Google Analytics image, users can find out key metrics including the number of visitors, the average number of page views, the average time spent onsite and the overall bounce rates. The last two metrics are highly important in assessing the effectiveness of your site.
If your analytics reports show a low rate of time spent onsite and high bounce rates then it reveals that your website is poor at maintaining user interest and engagement as site visitors are exiting the site quickly – all of which is bad news for the site owner. Site owners can also check what’s working on the site so they can continually improve their website offering.
Analytics trends
Web analytics is playing an increasingly important part in business and marketing. The vast majority of businesses now use an online analytics system and according to New Media Age, companies are fast increasing their investment in web analytics with 48% of companies intending to invest more staff resources to analytics.
And with continuing investment in analytics technology, maybe one day you might be able to find out which half of the advertising budget is being wasted.
