I am regularly frustrated with the desire by many clients to track statistics such as the number of visitors to a site or the volume of page views consumed. It’s time to break free from all that nonsense (and noise)! Why would anyone care about the top 10 pages report? Or for that matter, the top 100 or top 1000! They deliver no value to the question: Is you web site working and doing its job?

So, why do we have a web site? As I have stated earlier, it is for one of two purposes; to either make money or save money. You are either in the business of promoting something or encouraging visitors to find what they are looking for instead of more costly options such as calling your business for support.

If we can agree that visitors are brought to your site for a specific purpose then learning if they are accomplishing those specific tasks are indications of how the site is performing.

Measures, which illustrate visitor behavior and traffic volumes, are not indicators of web site success. Increasing hits, page views, and visitors may show that marketing campaigns are driving more visitors to your site, but not whether it’s performing well or not.

Instead, focusing on conversions is the key to success. Conversions are much more than tracking successful shopping cart check-outs. Conversions extend to non-commerce activities such as:

• Filling in a form
• Downloading a document
• Signing up for an event
• Registering for upcoming seminars or conferences
• Renewing membership or paying membership dues
• Signing up for continuing education classes
• Consuming key content (measured by how long visitors spend on a specific page)

Once we begin tracking the activity visitors are doing relative to what are objectives are for the site, we can learn how our site is performing and what changes need to be made.

Web analytics should begin with a plan. Unfortunately, most don’t. And the plan should start by answering the most basic of questions; why do we have a web site?

All web sites can be categorized as having one of two objectives; either to make money or to save money. Sites which make money are not only those in which shopping carts are presented. Rather, any site involved in the promotion of products or services have as their underlying purpose to increase brand awareness and encourage purchases on or offline.

Sites which attempt to make money include:

• lead generation
• brand awareness
• eCommerce
• Social networking
• Entertainment

Conversely, sites which attempt to save money are those which encourage self-service. It decreases corporate costs if web visitors can successfully download a document, register for assistance or fill in an online form rather than contacting a toll-free number and asking for the same to be done or mailed out.

Sites which attempt to save money include:

• >Customer education
• Self-service
• Customer service
• Informational
• Intranet

Understanding the objective of your site allows you to construct and establish key performance indicators (KPI) you need to track. Studying raw web analytics reports is meaningless.

Measures, which illustrate visitor behaviour and traffic volumes, are not indicators of web site success. Reports showing page views, most popular pages and visitor traffic do not indicate whether a site is performing well or not. No organization, with the possible exception of media firms, should fundamentally care if page views and visitor numbers increase. To extract real meaning from increases in raw numbers like page views or visitors it must be put into some context. That’s where KPIs come in.

With organizations becoming increasingly sophisticated with their web analytics initiatives so should management and owners of web analytics.  For many companies the question that arises is who is responsible for the web site and analytics.  Spurring this introspection is the fact that market research currently shows that Marketing owns web analytics 46% of the time, while traditionally IT owns responsibility of implementing tagging required to populate report data.

Have you ever run into any of the following issues in your web analytics implementation:

• “Where is my data?” or “How is that calculated?”
• Difficulty obtaining budget approvals due to lack of ROI calculations
• “Trial and error” changes. For example, putting in changes, finding out they’re wrong, and then having to back them out
• Analytics stalls because business and technology don’t know how to communicate their needs

Naturally, there can be a bottleneck when Marketing makes requests for reports or additional functionality especially when only one person manages web analytics.  Moreover, there needs to be a discussion on the four pillars of governance: accountability, accessibility, community and uniformity. These pillars address topics such as covering reporting responsibility, ensuring data is accurate, available and standardized, etc.

This is what we call Web Analytics Governance and it is gaining some steam and rightly so.  Governance is:

• The management of people, technology, and processes toward a common goal.
• The process of installing, configuring, managing, and utilizing the web analytics platform.
• Encompasses the way in which the business consumes and actions the web analytics data.
• Includes the feedback loop from the business back to the web analytics platform for enhancements or changes.

By establishing a strong governance model companies can eliminate inefficiencies, overlapping of roles, and establish key roles for a successful analytics deployment.

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More and more organizations are implementing an alternative technique to collect web site traffic information rather than relying on web server log files. This technique is called client-side data collection, or data tagging for short. Webtrends’ implementation is referred to the SDC (SmartSource Data Collector). Data tagging solves many problems associated with web server log file analysis.

Implementing data tagging requires some development work to ensure that data tags are inserted and maintained on web pages.

With data tagging, web traffic data is more accurate because traffic normally hidden by cache or proxy servers is tracked. IT administration is eased because data collection is centralized in one location versus site data being dispersed among several log files from multiple web servers that may also be geographically dispersed. And web data can be collected from specialized applications, such as application servers and browser applications (e.g. Macromedia Flash).

In short the SDC has the following advantages:

• Generates logs that are optimized for Webtrends that are as much as 90% smaller than traditional access logs.
• Produces a single centralized SmartSource file rather than separate log files for each web server. This essentially eliminates the administrative headaches associated with gathering logs from multiple, geographically dispersed web servers. The SmartSource file can even contain hits from multiple domains (the domain name can also be passed as a query parameter), allowing visitor behavior to be analyzed across an organization’s sites or even partner sites provided they permit your tags to be included on their pages.
• Provides information that is difficult or impossible to obtain with log files. For example, data tags linked to your SDC can be included in your banner ads placed on other sites. SmartSource tags can also be inserted into Flash applications, permitting a hit to be entered into the SmartSource file for each event fired in the program. This means visitor activity within Flash applications can be analyzed just like visitor interactions with HTML-based pages.
• Web traffic data is more accurate because traffic normally hidden by cache or proxy servers is tracked. In many cases, web server log files do not accurately represent the actual interactions visitors have with a web site. Proxy servers are one of several examples of how analysis results can be distorted by web server log file data collection. Proxy servers deflect page views from web servers by caching the most frequently requested pages. Local caches have a similar effect, handling browser requests through locally cached pages rather than making repeated requests to the web server. In doing so, these page views are not recorded in the web server log files.
• Creates a cookie for more accurate reporting. Cookies ensure visitors are tracked as they navigate and return (if using a persistent cookie) to your site. This enables the most sophisticated features of Webtrends such as Scenario Analysis, SmartView, Path Analysis, and Custom Reporting.
• Acts as a filter: you only tag the pages you need reporting on.
• Bots and Spiders don’t need to be filtered out and / or scrubbed from the logs resulting in more accurate reporting and requiring less CPU processing power.
• Enhancing reporting capabilities through META-tagging (i.e. tracking revenue, correlating Paid Searched Terms with conversions, …)
• Reporting on specific events within a page through the use of the dcsMultiTrack JavaScript function:
  • Tracking PDF downloads
  • Tracking dynamic / Web 2.0 events on pages (i.e. DHTML or any browser-supported event)
  • Tracking events within Flash movies

Client-side data collection is quickly growing in popularity as the superior approach to collecting web visitor behavior information. It provides greater reporting accuracy and lower administrative overhead. Organizations should carefully analyze the costs and benefits of data tagging versus web server log file analysis, and determine which method will best meet your insight needs.

Webtrends and Google Analytics do overlap and comparisons are worthwhile, but each will appeal to different audiences. We see many clients who are well suited for GA. If their needs are fully served by GA it’s the logical choice since it’s free. But the technological approach by both is different which means they will often serve different clients. While they both offer java scripted solutions, Webtrends also allows for the collection process to occur locally. Even though Urchin is also owned by Google, GA does not create a local log file which can be re-processed. Controlling the data locally does offer options which can often be important.

And if you have more demanding requirements or want to fully integrate your web analytics data with other marketing silos, Webtrends offers a richer environment. Here’s my list of positive aspects about Webtrends:

1. With Webtrends you own the data and you can pull it out at anytime. This applies equally to hosted or software.
2. Webtrends allows for a java scripted solution in which the collection server is local within your firewall. This is important for firms which do not wish to have corporate data stored outside the organization and particularly not if you don’t want your data in the US and accessible by the US Patriot Act.
3. Webtrends can re-process old log files to reanalyze if you decide you need to make reporting changes
4. Webtrends allows you to store a full backup of your raw log files in java scripted logs or standard log format
5. Webtrends allows you to use log based analytics in addition to JavaScript tagging as separate profiles to track activity. With this you can see search engine spider activity
6. Webtrends provides a Visitor History export function which can allow you to normalize all of your visitor data in a database. This enables you to understand how individuals navigate and interact with your site. This can be tied to email marketing or CRM tools for 1:1 marketing insight
7. Webtrends provides standard ODBC and REST access that allows you to get critical data and analysis outside of the Webtrends reporting engine and into other applications. This enables you to tie Webtrends results to offline data using Excel or your favorite Business Intelligence tool
8. Webtrends provides more detailed custom configuration and reporting
9. Webtrends can tell you what percentage of users are not accepting cookies
10. Webtrends provides content group analysis
11. Webtrends provides IP reports
12. Webtrends provides email and phone support

There are many factors and activities which determine the success of online properties. Understanding how these actions affect the overall message and how they interrelate is of significant importance.

Mass media marketing such as television or radio spots may reach a wider audience but may have little or no interest to many. How many of you fast-forward through commercials whenever possible? Conversely, other activities such as social media may reach fewer people but the direct dialog with customers can mean a stronger bond and impactful message. Cross-channel analytics allows us to investigate what the interactions between these different activities and the influence one activity has on another.

To better understand the effect marketing and online activities have on the success of an organization and their web site, Unilytics has created the CEM (Customer Engagement Model). It illustrates the relative worth of different marketing activities with respect to Customer Reach and Customer Value. “Customer Reach” refers to the relative number of people our message will get through to. “Customer Value” assigns a rough measure of how personal the message is to each individual recipient when it reaches them.

CEM is divided into three activity sectors. In the first sector we unilaterally ACT with no real feedback from our customers. This one sided communication includes mass marketing activities such as television, newspaper advertizing and radio spots. These may reach a very large audience, but will likely not resonate with the majority of those who hear or see the message. Email marketing can also reach many and we see it as being more impactful to individuals as we can tailor the message based on previous results. That is also why it overlaps with the next sector.

In the second sector, we have the ability to REACT to our customers and make changes to our communication and marketing message. We’re beginning to have a two-way conversation, but we can only ‘hear’ from large groups of people. There are several marketing initiatives which fall into this sector including web analytics, 1:1 marketing, A/B testing, voice of customer and search marketing including SEO and display advertising. They all allow us to react to customer feedback and change our messaging to better serve customers. Because we are able to gather feedback and improve our offer, these activities tend to be more impactful and result in improved customer value, while these activities tend to reach fewer people. Again, some overlap into the third sector.

In the third sector, we INTERACT with our customers and we market products and services in direct response to customers concerns and needs. We now have a one-to-one conversation with our customers and their involvement is greatest in this sector as is the value of the communication. We fully interact with customers by using such social media tools as Twitter, forums, and various others; we react to their concerns and correspond directly with them. However, unless the dialog becomes viral, the number of people we interact with tend to be very few. By using CRM solutions, we can establish an ongoing dialog with customers and create an ongoing relationship, placing this activity also in this sector.

Some may challenge the placement of the various activities. Furthermore, this is not meant to be a comprehensive list of activities. The point is that each activity has its value and they affect company-wide marketing success differently. Each contributes to the overall success of the message. No single event or activity is positioned in the top right corner of the model where we ultimately strive to be. Our goal is to reach everyone with a comprehensive, interactive dialog so we can serve them fully to their specific needs and desires. Such a tool does not currently exist. But with a combination of marketing activities we can get there as a whole. Reaching that goal requires an integrated effort so we understand how one activity affects another. Cross-channel analytics is crucial in this endeavor.

Measure KPIs, not web traffic reports

Web analytics delivers an overwhelming amount of information by way of reports. Much of it is fascinating but the excitement of those reports wanes over time because the information is not used to affect daily business functions. And why should it?! It’s usually not relevant to the business.

Identifying what values to look for and which reports to evaluate represents the biggest single issue for organizations in obtaining real value from web analytics and the daunting array of reports. The creation of reports is often not the problem; the challenge lies in interpreting those reports and extracting the minutiae that has true meaning.

But part of the problem is that web traffic reports don’t deliver much meaning as to how your site or business is doing. Much of the information can be used but it needs to be put in context and related to other data sets or over time.

Is having more visitors to your site a sign that the web site is performing well? It may or may not be. If your business goal is the increase web site traffic, then it is. But that would not typically be a goal for a site. Instead, goals should be part of your business objectives such as generating more product interest, sales or delivering better customer service. Yes, more visitors and pages viewed may be indicators that product interest is up, but perhaps your marketing campaigns are driving unqualified people to your site instead. How they convert and better still compared to last month is a much better indicator. Now include the cost of the campaigns and we get a sense of which one is best to the bottom line.

So, measuring key events over time may be more representative of site performance as it relates to your web site business goals and objectives. Since no web analytics reports directly inform if you are meeting your goals and objectives, you need to build on the values that are given to determine if you are succeeding or not.

KPIs (Key Performance Indicators) can help us do that. Let’s examine how they assist us but first we have to understand how they are arrived at and how they relate to business goals and objectives. There are five components to measuring goals and objectives, each building on the next. They are:

Measures

Raw numbers and data points.

Examples include:

• page views
• visitors
• keywords
• pdf downloads
• Also, non-web numbers such as cost of campaign or PPC (Price Per Click).

Metrics

They are always combinations of Measures expressed as ratios, averages, rates, or percentages.

Examples include:

• average pages viewed per visit
• leads per referrer compared to last period
• conversion ratio of visitors to leads
• percent new visitors compared to last period
• length of visit compared to last period
• online service completions compared to call center support calls

Key Performance Indicator (KPI)

These are simply Metrics which are important enough that they inform us how the business is doing.

Critical Success Factors (CSF)

These are a limited number of key factors or activities that an individual, department, or organization should focus on to be successful. CSFs are specific conditions that measure, or facilitate, the meeting of business goals and objectives within set timeframes.

Examples include:

• new product development within next 12 months
• good distribution network in place by year-end
• new advertising campaign launched within six months.

Goals and objectives

These represent the overall objective for an organization to be viable and are usually set by senior management.

Examples include:

• increase sales
• improve customer service
• optimize organizational support costs.

Creating KPI’s

Identifying which KPIs to measure remains a common problem. By definition, they provide a window into how we are doing as an organization and if we are likely to meet our stated business goals and objectives. But since KPIs aren’t typically intuitively associated with goals and objectives, they are difficult to define.

Critical to the development of KPIs is to recognize that they are driven by business goals and objectives but are constructed from Measures.

KPIs are best determined by first identifying goals and objectives, which are then associated with Critical Success Factors which in turn determine relevant KPIs. However, since the calculation of a KPI is done by using Measures, we begin with them to construct the KPI. Let’s look at an example:

Goal: Increase sales

CSF: Increase leads by 25% within three months
KPI: Conversion ratio of visitors to leads, percentage increase in Contact Us form requests

Now that KPIs have been identified, we can look at the Measures that make up the chosen KPIs. Since the first KPI is a ratio of visitors to leads, we must first find those measures and do the appropriate calculation to obtain that ratio. Secondly, we need to obtain Contact Us form requests and calculate the increase over the past period.

Measures: visitors, leads, Contact Us requests

Conclusion

Web analytics reports are themselves not very useful for determining web site success. Understanding business goals and objectives and establishing KPIs to measure them provides tangible and concrete evidence if we are on the right track and if we need to make changes to the site to improve results.

Unilytics is an offcial eMetrics sponsor

As we plan to exhibit at eMetrics in San Jose, May 5 6 and 7, I felt it was great time to introduce you to our new blog! Yes, there are lots of them out there already and we are not early to write one, but we plan to offer relevancy about our industry and company. And there’s much to talk about.

Unilytics has been in the web analytics business since 2001 and we have seen enormous change. Perhaps the biggest difference is what firms are beginning to do with analytics. And how it’s being incorporated into other corporate data silos.

It’s often not enough to understand what visitors to your web site are doing, but how else are they interacting with your company? Via customer support, in-store purchases and yes, also blogging. And they are all intricately intertwined. As your web self-service portal improves a relative drop in call center requests should be observed. An old boss of mine used to say “in technology, if you stand still for six months, you’re dead“. For the upcoming eMetrics show, we have completely changed our booth to reflect our new message, which is that incorporating other systems and their data into what web analytics provides is the key. That means tying together CRM, email marketing, call-center data and how coupons printed from the web are redeemed in stores so you get the full picture of what your customers are doing and what they need.

Unilytics is an official WebTrends partner

We are of course a huge proponent of WebTrends and are pleased to see their renewed focus on making it easier to get access to the underlying data used to create all reports. This is going to create fantastic opportunities for clients as they become better aware of all aspects and needs of their web visitors.

Peder Enhorning, President Unilytics Corporation.