Web site traffic analysis

During the dot-com heyday, companies slapped sites on the Web and waited for traffic to pour in. They counted "eyeballs" and measured their site's "stickiness" as a way to convey the online real estate's value to advertisers. When the Internet bubble burst, "sticky eyeballs" seemed suddenly worthless. Now, as the Web has moved from being a technology pipe to a sales channel, companies need to update their Web measurement strategy with new metrics and analysis tools that can help them analyze customer behavior and improve their site's business success.
But while hits were once the metric du jour, the new metrics aren't so clear-cut. "There is no standard metric that a company can rely on for its Web site," says Randy Souza, an analyst at Forrester Research Inc. in Cambridge, Mass. "Metrics will be different from company to company." Where a retail site might be focused on conversion rate (the number of online shoppers who actually buy something), a business-to-business site might value site reliability and speed above all. In short, the most valuable metrics will depend on what you are trying to do with your site. Once that is determined, large enterprises should consider buying software to help analyze Web data, while midsize and smaller companies should consider a hosted service.
That's already happening and will likely increase in the next few years, as companies come under increasing pressure to document their Web site's value. By 2006, New York-based Jupiter Research estimates, annual spending on site analytics will reach $1 billion and application service provider (ASP)-based services will account for 29% of spending. Although IT leaders don't always need to be directly involved, they should be able to suggest valuable metrics to marketing and operations departments. Measuring a Web site's success can also be crucial when forced to defend e-business spending. And IT leaders will need to partner with other business units on site redesigns that result from the analysis of Web metrics.
Checklist
The following are descriptions of some of the most important metrics and analysis tools, depending on the type of Web site.
Business-to-Consumer/Retail Sites
Clickstream: More than a metric, clickstream analysis is a broad method for companies to analyze their customers' behavior. A wide range of Web analytics software packages and ASPs offer clickstream analysis, which can help a company analyze where customers enter its site and where they exit.
Customer drop-off rates: According to Jupiter Research, 71% of sites do not analyze customer drop-off rates, even though 66% of consumers reported having abandoned a