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Google Analytics by Justin Cutroni

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Chapter 1. Introducing Web Analytics

This book is about Google Analytics, and at some level that means it is also about web analytics. It’s important to note that Google Analytics is not the same as web analytics. Web analytics is a business process used to continuously improve your online business. Google Analytics is a tool to quantitatively measure what happens on your website. Just because you have Google Analytics does not mean you are doing web analytics.

Before we dive into Google Analytics, I believe it’s important to establish how Google Analytics should fit into your overall analytics strategy.

Defining Web Analytics

Rather than creating another definition of web analytics (there are a lot of them out there), I prefer to reference Avinash Kaushik’s concise yet thorough definition. In his book Web Analytics: An Hour a Day (Wiley), Kaushik defines web analytics as:

The analysis of qualitative and quantitative data from your website and the competition, to drive a continual improvement of the online experience that your customers, and potential customers have, which translates into your desired outcomes (online and offline).

This definition encapsulates three main tasks every business must tackle when doing web analytics:

  • Measuring quantitative and qualitative data

  • Continuously improving your website

  • Aligning your measurement strategy with your business strategy

Let’s look at each part of the definition and break it down into more detail.

Quantitative and Qualitative Data

Web analytics is not possible without data. But many organizations fail to realize that they need many different types of data to understand the performance of their website. Tools like Google Analytics, Omniture, WebTrends, and Yahoo! Web Analytics generate quantitative, or clickstream, data. This data identifies where website traffic comes from and what it does on the site. It more or less tells what happened on a website.

While clickstream data is critical, you must collect more than quantitative data—you must also collect qualitative data. While quantitative data describes what happens on your website, qualitative describes why it happens. Qualitative data comes from different sources, like user interviews and usability tests. But the easiest way to get qualitative data is through surveys. Asking website visitors simple questions like the ones below can lead to a greater understanding of what visitors want and whether you’re making it easy for them:

Why did you come here today?
Were you able to do what you wanted to do?
If not, why?

There are a number of free qualitative data tools, like 4Q and Kampyle, that are easy to implement and provide valuable feedback from your website visitors. In many cases, it’s easier to implement these tools than a clickstream data tool like Google Analytics. If you’re not collecting qualitative data, start now!

It’s not enough, however, to analyze clickstream data from your own website. You must also look at data from your competitors’ websites. We live in an amazing age in which competitive data is freely available to everyone.

Competitive data provides valuable context for your own data. It describes your performance as compared to that of your competitors. Compete.com and Google Trends can help you identify simple things like whether your competitors are getting more traffic than you.

The Continuous Improvement Process

The second part of Kaushik’s web analytics definition is, “to drive a continual improvement of the online experience that your customers, and potential customers have.”

All of the data and analysis must drive a continuous improvement process. This is the most critical part of web analytics. You must take action on the data. That’s the whole purpose of web analytics—to improve over time. Figure 1-1 shows a very basic representation of the web analytics process.

The web analytics process: measure, analyze, and change

Figure 1-1. The web analytics process: measure, analyze, and change

Knowing how to change as a result of analysis is often difficult, though. Much of our data tells us that there is a problem, but it does not say how to fix it. So how does one go about fixing or optimizing a website based on data? You create different solutions to the problems and test them. Testing is the process of displaying the potential solution to website visitors, in real time, and measuring which one generates the best result. Many people are surprised to learn that testing a website is possible. There are a number of free tools, like Google’s Website Optimizer, that provide this service.

Testing has always been part of marketing. Direct-mail marketers have been testing different offers and different ad variations for a long time. And those doing pay-per-click marketing have also been testing for many years, experimenting with different headlines and ad copy to optimize ad expenditures.

However, website testing has failed to gain popularity. I believe the reason testing has been adopted so slowly is because of the many misconceptions about testing. Most people think testing is too hard, too expensive, or takes too much time. But in reality, testing has been changing, just like web analytics. With free tools it’s becoming easier and easier to start testing different parts of a website.

Measuring Outcomes

The final part of Kaushik’s definition of web analytics is that it “translates into your desired outcomes (online and offline).”

The entire goal of the web analytics process is to increase our desired business outcomes. We are no longer obsessed with just measuring how much traffic our online business generates. We also want to measure how well it performs in business terms.

This means measuring metrics that relate directly to our overall business goals. Every website exists for a reason, and your measurement strategy must align with the business goals of the website.

For the most part, all websites exist for one of the four following reasons:

  • To sell a product

  • To generate a sales lead

  • To generate ad revenue

  • To provide support

Some websites do other things as well, but for the most part, this is why websites exist. This is where you should start measuring your website. How does it affect the bottom line of your business? Once you define why you have a website, it becomes much easier to identify the metrics you should focus on. You don’t need a lot of metrics—just a handful (3‒5) should help you understand if your business is succeeding or failing.

Note

If you’re having trouble identifying key performance indicators (or KPIs) for your site, try The Big Book of Key Performance Indicators by Eric Peterson (http://troni.me/dr08gA).

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