Web Analytics and ROI Tracking

This week i have been asked several questions regarding web analytics and ROI tracking. So i decided to revamp an article i published last year.
Here's the article i recently published on ezineArticles


Web Analytics and ROI Tracking
By Eric F Martin

The main goal of a web site is providing information and content to its visitors, but how do you know how many people visited your websites, which pages did they visit, which content is more likely to attract visitors, are there any returning visitors... Usually when you invest time and money optimizing your website, or promoting it, or managing a pay per click campaign, you have to know how effective it was, that way you can decide If it's worth it or not. In fact, every webmaster has to track his online visitors and their behavior.

Web analytics is the measurement of a web site's visitors behavior. It refers to the measurement of the best converting pages, the number of visitors, unique visitors, returning visitors, goals, entry pages, exit pages, geographic localization... in order to determine which pages of the website succeeds and helps you reach your objectives. For example, You need to understand where your traffic comes from, which landing pages encourage people to make a purchase, which affiliate or partner site sends the most converting traffic, which one sends low quality, low converting traffic, which marketing effort generates the best Return On Investment or R.O.I ... thus Web Analytics is critical to improving the measurable results of a marketing campaign in order to improve the return on investment or you are simply wasting your money.

There are two main technological approaches to collecting web analytics data. The first method, log files analysis, reads the log files in which the web server records all its transactions. The second method, page tagging (ex :Google analytics), uses JavaScript on each page to notify a third-party server when a page is required by a web browser. The two techniques can present different results. The differences you see between the two solutions is due to two main factors: -file caching: if a returning visitor has file caching enabled on his web browser (usually it is the case) the request for the file he already viewed will not be sent to the web server, and he will view a local copy, so a log files analysis software will not detect multiple visits some times. -Page tagging relies on the client (visitor) browser voluntarily providing the analytical information requested. Some browsers disable so me data collection for security reasons.

The main advantages of log file analysis are the fact that the data is already logged by your web server. Every transaction is recorded by the web server regardless of the visitors browser, and this data is on your server directly in standard format so you do not rely on a third party server. Another advantage is the fact that log files provides information about visits from search engine spiders, robots, and failed requests which is really important if you want to optimize your website.

The main advantages of page tagging is that the javascript is called every time the page is loaded so you can track precisely your visitors behaviors even if they are loading the web pages locally from their cache. it can also report on events which do not involve a request to the web server (flash action script...). Page tagging is adequate if you run e-business websites, or if you need to track your visitors behavior.

A multitude of web analytics software and service providers are available, such as Google analytics, omniture, clicktracks, AwStats, statscounter... Some of them use page tagging or log files analysis or a hybrid approach using both, I believe that if you are serious about optimizing your web presence you need to use both techniques in a complementary approach. Web analytics solutions can be technically difficult to configure with funnels, goals, targets, special items tagging (flash, javascript...) the process can be complicated and time consuming, that is why some people outsource the whole process to an expert especially when it comes to configure the software in the beginning. Usually when you outsource search engine optimization or web promotion it comes with a web analytics solution and traffic reports in order to measure the effectiveness of the provided services.