Search Engine Optimisation

What is Web Analytics?

When individuals use a web site, their activity patterns (that is, the pages from the site that they requested) can be recorded and analysed. This data is a rich mine of information, containing information about who visited the site, which information they requested, and which order they requested it in.

Although web analytics isn't solely applicable to an e-commerce environment, the analogy of a web site being like a department store is a useful one. Indeed, bricks and mortar retailers spend millions of pounds every year analysing how their customers use their stores.

If you're analysing the usage of a department store, you can look at the products that visitors looked at, and the departments they went to; this corresponds to the pages that visitors request on a web site. But you can also analyse the order in which visitors visited the different departments - do visitors tend to visit the haberdashery department before or after they visit the womenswear department? This information can help you to plan the store, to make sure it's easy to use and helps visitors to find the things they're looking for.

Web analytics also offers information that a traditional store can't - information about the visitors themselves. If the visitors to your web site fill out a registration form, the information they provide (such as postcode data or date of birth) can be incorporated into the analytics. So you can find out the average age of your visitor, for example, or where they are in the country (or the world).

It's important to stress again, though, that web analytics is not just relevant to e-commerce sites - the discipline can deliver value in a number of different business contexts. In the rest of this article, we'll look at three of the most important environments for web analytics. In addition to examining its value in an e-commerce context, we'll also look at how web analytics can help with e-marketing and Knowledge Management.

Web Analytics in E-commerce

E-commerce is the most obvious place to find web analytics. The primary business driver for anyone running an e-commerce site is to maximise the profitability of the site. This is primarily a case of maximising the revenues generated - i.e. getting visitors to spend more money.

Web analytics can help here by providing information about the usability of the site. Many e-retailers have learned valuable lessons about how easy their checkout process is to use from carrying out web analytics; by making changes to this process, they've increased the proportion of their visitors who complete their purchases rather than abandoning their baskets.

Web analytics can also provide useful opportunities for cross-sell and up-sell opportunities. On a consumer electronics site, for example, you might learn that the visitors who buy VHS tapes also look at DVD players, but don't buy them. Armed with this information, you can promote DVD players heavily in those areas of the site, in an effort to influence an impulse purchase.

Web Analytics in E-marketing

The other business area where web analytics is most commonly found is in e-marketing. With marketing budgets under intense pressure, demonstrating the ROI of online marketing is very important.

A useful nugget of information about a visitor's visit to your web site is the so-called 'Referrer': the site that the user came from in order to reach your site. Analysis of this referrer information can reveal which marketing campaigns your visitors responded to. This information can then be cross-referenced with information you have about your visitors' subsequent behaviour to build a detailed picture of the effectiveness of the money you're spending on marketing, not just in terms of delivering visitors to your site, but in terms of actually driving business and generating revenues.

As an extension of this idea, web analytics can help you to optimise the effectiveness of your online marketing during a campaign. You might learn, for example, that one banner ad you're using is much more effective at driving quality visitors than another. In this case you can ditch the second banner ad before you've wasted too much money on placing it on web sites across the Internet.

There are many other useful tricks and techniques to get the best out of your online marketing with web analytics.

Web Analytics in Knowledge Management

The area where web analytics is perhaps least well known is in Knowledge Management. As businesses invest more and more in internal systems for sharing information, the effectiveness of these systems becomes very important.

Web analytics can be helpful in a KM environment in two ways.

Firstly, it can be used to measure the effectiveness of knowledge-sharing systems. Do people actually use these systems, and if so, who's using them? This intelligence can be very useful not just in justifying the investment in existing KM systems, but also in planning future extensions. For example, if the Finance department are avid users of the intranet, then it might be worthwhile prioritising information that they'd find useful.

The second application of web analytics in this area is more tightly involved. Some of the more sophisticated KM systems keep track not only of documents, but also manage a database of expertise, so that when an employee starts looking for information about a certain topic, they find not only documents on that topic, but also other employees who are experts in the topic. The information that web analytics provides about document usage can be fed into this expertise database; if you know that someone spends a lot of their time looking at documents about a certain topic, you can start to conclude that they may be an expert in it.