Web Analytics

MarketingSherpa Report:
Guide to Getting Started with Web Analytics

isbn: 978-1-932353-95-2
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MarketingSherpa’s Guide to Getting Started with Web Analytics
Table of Contents
Table of Contents .........................................................................................................................................1
Introduction...................................................................................................................................................2
The Big Picture – What is the Function of Web Analytics? ............................................................................... 3
How is Analytics Being Used By Others? .............................................................................................................. 4
Chart: How would you rate your analytics setup at present? ...................................................................... 4
Chart: Incidence of Analytics Usage Among Search Marketers ................................................................... 5
Tracking .........................................................................................................................................................6
Metrics .......................................................................................................................................................................... 6
Table: Common Terms & Metrics for Web Analytics ..................................................................................... 6
Chart: What metrics are online video advertisers using? ............................................................................. 7
Picking an Analytics Program ................................................................................................................................. 9
Chart: Use of Analytics Programs Among Search Marketers........................................................................ 9
Chart: What Search Marketers Value Most in an Analytics Program........................................................ 11
Creating Trackable Marketing ............................................................................................................................... 11
Chart: When designing ads, does your organization do any of the following?...................................... 12
Tricky Tracking – Flash & Rich Media ................................................................................................................ 13
Defining Conversion – Creating Goals................................................................................................................ 13
Chart: Conversion—One Metric with Many Definitions ........................................................................... 13
Chart: Financial Metrics Tracked by SMB Email Marketers ....................................................................... 14
Analysis ........................................................................................................................................................15
Visitors: Who is coming to the site?..................................................................................................................... 15
Basic Segmentation & Filtering ...................................................................................................................... 15
Filtering .............................................................................................................................................................. 16
Sample-based Tracking & Analysis................................................................................................................ 16
Traffic: Where are they coming from? ................................................................................................................. 17
Chart: How do you currently attribute online ad exposures to site visitors? ......................................... 18
Chart: If you use cookies to track ad exposure among site visitors, how many days are the cookies set to last for on
consumer browsers?.......................................................................................................................................... 20
Content: What are they doing on the site? .......................................................................................................... 20
Goals: Are site visitors doing what you want them to do to further your business goals?........................ 21
Dashboards, Automation & Testing .......................................................................................................21

Testing & Benchmarks ...................................................................................................................................... 22
Test Validity....................................................................................................................................................... 22
Testing Calendar................................................................................................................................................ 24
Conclusion ...................................................................................................................................................25
About MarketingSherpa............................................................................................................................26
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Introduction
This guide was written as a companion piece to the Everyday Analytics webinar, and is intended
to help anyone getting started with web analytics to quickly and easily grasp:
1. How to get a simple analytics program set up

2. What kind of analytics program will be the best fit, and if an advanced analytics solution
is needed
3. What common problems web analysts will encounter
4. Which reports are the most useful and how to approach analysis
5. Some successful tactics for choosing the right tests
Web analytics can be quite complicated when complication is necessary, but for most users, set-
up and reporting is fairly straight-forward and simple. New analysts need not be daunted by the
infinite possibilities of most analytical programs. By focusing on specific strategic goals, it’s
possible to methodically walk through an orderly list of tasks—each of which add an additional
layer of information and insight to the larger picture of what is happening on a website, or in a
marketing campaign as a whole.
New analysts will have to have some understanding of html coding and statistical relevance.
Again, it’s important to know that you need not be an expert in either of these fields to be a
competent analyst. By following some fairly simple instructions, it’s easy to get under the hood
of your site and add code where needed, or apply some commonsense statistical math to find out
whether the data you collect is actionable.
While we do use Google Analytics for our examples, this guide does not endorse any one
analytical program, and is not meant to act as a how-to guide for using any one analytics
program. Rather, it simply attempts to demystify web analytics and get new analysts started
down the most productive paths to gleaning actionable insights. Nobody has all the answers, but
we hope we can get you asking the right questions.
Tim McAtee
Senior Analyst
MarketingSherpa, Inc.
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The Big Picture – What is the Function of Web Analytics?

Analytics is not a single activity; it’s a series of activities that when done in sequence can show
what’s happening, why it’s happening, and where improvements are needed. There is a big
difference between the three main components of web analytics, which are:
• Tracking—compiling large amounts of unanalyzed data, the foundation for analysis
• Analysis—looking at the data and making hypotheses about why it is the way it is
• Testing—controlled tests of analysis hypotheses to determine if a guess was correct
Analytics uses many methods to track the actions of individuals out in the real world. Short of
watching over the shoulder of everyone, everywhere, web analytics is the best tool available to
monitor the activity of everyone that comes in contact with your marketing. While web analytics
focuses on internet behavior, it should ideally integrate with offline data for a larger analysis of
the entire marketing universe.
While web analytics programs are ostensibly there to show you what’s happening on your
website, the website is simply the destination, not the journey, and the journey is just as
important. A good analyst will make sure that every possible brand touch-point, from TV ads to
in-store visits, to mobile store-finder usage is somehow factored in to later actions that occur on
a website. While determining causality or even correlation is not always possible, analytical
models of an entire marketing universe can take advantage of data from many sources, then fill
in the gaps with common sense and statistically-based inference where needed.
Analysts are tasked with somewhat contradictory tasks—they must gather as much data as
possible about the actions of individuals in their marketing universe in order to not draw false
conclusions due to missing data, yet must also make sense of all this data by finding the needle
of causality in the haystack of monitored activity. Luckily, good analytical programs make it
easy to do both simultaneously. But, it still takes a savvy analyst to tap into insights that aren’t
so obvious, or to know a false conclusion when they see one.
Everyone trying to implement a web analytics program should be focusing on turning their data
into actionable insights. Knowing what happened is important, but is far less interesting than
knowing why it happened.
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How is Analytics Being Used By Others?

We put the following question to all the online advertisers we surveyed who said they were
currently engaged in some form of analytics. As you can see, the majority of analysts have a mix
of software automation and hands-on work with the data. While analytics software is constantly
improving and evolving to do more and more of the work for you, every website, and every
marketing campaign is different. This difference means that no two analytics programs will be
the same, so analysts are going to have to personalize out-of-the-box reporting.
Chart: How would you rate your analytics setup at present?
Cross-media reporting, in particular, can be difficult, since different media are often tracked by
different sources, using different methodologies. A good web analytics program should be able
to holistically track multiple websites, paid and natural search activity, online display
advertising, email marketing, online PR and social media activity. Triggers can be set up to
indicate usage by offline-exposed individuals, but this data is incomplete compared to the online
tracking. Online tracking shows how many people did not take an action, as well as how many
did. Online tracking of offline exposure only shows how many people did take an action.
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Without the success rate of actions divided by inactions, on and off-line exposure can’t be
compared easily. This is why integration with offline data is important, but difficult.
In another survey, we asked a sample of marketers with active search engine marketing programs
whether or not they were using any analytics programs, then broke out the responses by pay-per-
click search ad monthly budget and consumer target type. On average, 90% are using some form
of web analytics software.
Chart: Incidence of Analytics Usage Among Search Marketers
Anyone that has a marketing web site should be engaged in some form of search marketing, and
every analytics program should be able to tell you, at minimum, how much of your traffic is
coming from which search engine. Knowing what keywords are generating that traffic is even
more helpful. As it happens, that report comes standard in the free edition of Google Analytics.
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Tracking
Metrics
Metrics are the currency of analytics, so it’s important to know how common metrics are
defined, and to agree on what the definition of those metrics is. Following is a partial list of the
most common web analytics data terms and the equations that turn these terms into metrics.
Table: Common Terms & Metrics for Web Analytics
Term Definition
Page View Number of times a page is viewed
Visit/Session All activity of an individual visitor within time allotted for a

session—often 30 minutes
Visitors Total Sessions
Unique Visitors Total Visits from Individuals—multiple sessions not counted
Duration Time spent by an individual during a session
Referrer From original to last, the string of pages a visitor visited to get to a
final page
Metric (Ratio) Numerator Denominator
(CTR ) Click-through Rate Clicks Impressions
Bounce Rate Visitors that immediately leave All Visitors that only see a
a specific page specific page
(CVR ) Conversion Rate or Desired action (often a sale, but All visitors offered the
(KPI) Key Performance can be anything) desired action
Indicator
(VTR) View-through Rate Visitors carrying a cookie from Unique Impressions of
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an un-clicked referrer cookied referrer
By figuring out what each metric term and ratio is, you should be able to easily answer:
• How are people getting to my site?
• What are people doing when they get to my site?
• Are my business objectives being met by my website?
There will be a lot of metrics offered by any decent analytics program that you’ll never need to
use, and can probably safely ignore. These additional metrics and reports are not useless; many
common analytical reports were designed for website administrators, not marketers. It’s
important to focus on metrics and reports that speak directly to your business objectives.
Websites with different objectives are judged with different yard sticks, and different media
types will mean expanding the types of metrics that matter to make sense for that media type.
In the following chart, we see what metrics video advertisers are using to learn about their video
ad campaigns.
Chart: What metrics are online video advertisers using?
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Notice that many of the basic metrics common to all online reporting are represented here, such
as clicks, but additional metrics have been layered on top of the basic reporting that enable the
analyst to speak about video and the way it is used. Media-appropriate metrics such as “% of
Video Viewed” and “Replays” speak specifically to how consumers actually watch video.
Metrics such as “Engagement” and “Awareness Increase” could be applied to any medium, but
speak specifically to a marketing strategy of increasing awareness of a brand or message.
Some important distinctions among metrics that often trip up inexperienced analysts are:
• Hits vs. Visitors vs. Unique Visitors
• Click-through vs. View-through
• “Conversion” is in the eye of the beholder
"Hits" refers to the number of files being called when an individual page loads. A single visitor
looking at a single page will incur many hits, since each page is made up of multiple files. A
normal web page will pull in an HTML file, a CSS file, and multiple jpeg or gif image files. For
this reason, hits is a relatively worthless metric for marketers, and is usually only of interest to
the IT workers responsible for the site. Much more informative for marketers are Visitors and
Unique Visitors, since they correspond to actual people and countable sessions.
Similarly, it’s important to be familiar with the difference between click-through and view-
through. In both cases, an individual is exposed to an ad, and after viewing goes to the
advertised website, where the click- or view-through is counted. With click-throughs, that visit
to the site is immediate, because the individual clicks a link on the ad. With view-throughs, a
cookie is dropped on a users browser when they see an ad, which the web site can recognize later
upon a visit. Cookied individuals may finally come to the site when they perform a search to
learn more about the product, or independently type in a company URL following exposure, but
that visit can happen days or weeks after ad exposure. In order to get the most accurate picture
of what happened, it’s important to factor in both immediate and latent types of attribution
metrics.
One of the trickiest and least-understood issues in analytics is defining conversion. Conversion
rates are self-defined, and totally dependent on the analyst to create. KPIs or Key Performance
Indicators can be applied to just about any measureable action on a website. A conversion event
can be set to trigger when an individual buys a product on a website, or when an individual has
viewed a set number of pages. These conversion events need to be weighted by the analyst for
relative importance. When setting up conversion events in your analytics program, it’s normally
possible to assign weights to the events that correspond to their importance. A lack of
standardization can cause a lot of confusion, but when applied in smart ways, the data produced
by an array of conversion rates—each triggered at various stages of the purchase funnel—can be
incredibly informative.
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Picking an Analytics Program
The past year has certainly been a buyers market for anyone shopping for web analytics software
programs. Ever since Google Analytics came on the scene with a basic analytics program that’s
free to most (websites with 5 million+ page views per month must pay to use the service), other
analytics vendors have been scrambling to innovate and offer more powerful tools for less
money. The thing for software shoppers to keep in mind, however, is that functionality is more
important than price. Even then, the cost of an “expensive” analytics program is generally pretty
low, especially if the payment is structured on the amount of web traffic you have, and that
traffic is relatively low.
Chart: Use of Analytics Programs Among Search Marketers
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While all web analytics programs are pretty good at showing what’s happening on your website,
different analytics programs will be better or worse at integrating with your on and off-line
marketing and media. If you have a huge online advertising presence, complicated PPC search
campaigns, a complicated ecommerce site, or lots of rich media and online video, you’ll want to
find an analytics vendor that caters to you. Google Analytics, for obvious reasons, integrates
very well with a Google PPC search campaign, and even with reporting on TV ads bought with
Google’s TV media buying service. You’ll find, however, that Google Analytics may not do as
well at incorporating and tracking other external data sources.
The fact that Google Analytics is designed to be most beneficial to users of Google’s media
products should not be seen as a condemnation of the service at all. Nearly all of the cheap or
free services are cheap of free for a reason. If you want an unbiased analytical platform, you’ll
probably have to pay for it. The fact that Google offers such a good program for free, even to
non-buyers of their media products, is in itself to be lauded (unless you happen to work for a
competitive analytics software company). As you can see in the preceding chart, usage of
Google Analytics by SEM professionals was already at 41% in 2007, and grew to 53% by 2008.
Unless you’re sure that Google Analytics is under-powered, or your site is likely to serve more
than 5 million impressions per month, we would recommend starting with Google Analytics and
then adding on additional analytics programs as needed. There’s no penalty or problem with
using multiple platforms to track your website, and as long as you are prepared to handle the
flood of data this will produce, more data is better than less when it comes to tracking.
If, however, your company is not currently employing a skilled analytics staff, or is otherwise
unable to handle a large influx of tracking data to analyze, start simple. The great thing about
analytics programs is that it’s possible to increase the complexity of data collection and analytics
as your marketing complexity and your analytical skills increase.
If your marketing is hopelessly complex, you may want to consider outsourcing analytics.
Setting up an analytical program can be fairly time-consuming, but once it’s set up and running
properly, maintenance and reporting are relatively quick. As you can see in the following chart,
search marketers rank the importance of analytics software attributes differently depending on
the size of their budgets. Marketers with big search budgets rank ability to integrate with offline
media and ability to handle complexity higher than do those with smaller budgets.
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Chart: What Search Marketers Value Most in an Analytics Program
Creating Trackable Marketing

Just as your website needs to be designed to move your KPIs, your external marketing needs to
be designed to work in concert with the metrics that are most appropriate for your marketing
goals. Too often, marketers build ads before they figure out what the ads should do. As an
analyst, you can do your organization a huge favor by working with creative teams from the start
to build ads that are designed to address specific goals. You can then make sure these goals are
aligned with the website and that they are measured properly. By creating trackable marketing,
it’s far easier to understand and properly attribute the traffic coming to your site. With that data,
you can create closed-loop marketing and help the creative teams better understand what works
at each level of conversion, from driving awareness to selling product, and what doesn’t.
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Chart: When designing ads, does your organization do any of the following?
Online advertising is relatively easy to track and most analytical software packages are designed
to easily fold in layers of online marketing data such as email click-throughs, PPC keyword
clicks, and banner ad clicks. Depending on the program and the reporting needed, you may need
to tag the ads the same way you tag the site, or program an ad to drop a cookie on a viewers
browser to signify exposure. These digital trails are relatively easy to create with good software,
and can dramatically speed up the process of analysis.
Some marketing can’t be so easily tracked, but low tech methods of traffic attribution are always
possible. When driving traffic from an online sponsorship, magazine ad, TV ad, or any other
hard to track source, you can simply create unique URL paths, or even unique phone numbers.
Whenever possible, you should try to find opportunities for closed-loop data matches, even if
they occur outside of the website. Some examples are in-store pick-ups of online orders, email
coupon redemptions, or matching cookie exposures to online warranty sign-ups.
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Tricky Tracking – Flash & Rich Media

Newer, more interactive programming languages such as Flash websites and applications,
dynamic AJAX pages, or rich media ads usually need custom coding to be tracked. In much the
same way that you need to create your own definitions for conversion or KPIs, you’ll need to
decide for yourself what to consider a “page view” or how to track and value other non-standard
actions, such as a video rewind. If you are building large websites or complicated applications in
flash, make sure you have the time and/or money to invest in more complicated analytics.
Defining Conversion – Creating Goals

As we’ve said, analytics programs do a lot of the work for you when it comes to tracking the
elements in your site, but you still have to define your KPIs and create conversion goals yourself.
Every site has different conversion goals, and not all conversion goals are equally important.
You’ll want to create multiple goals, then weight them, assign dollar values to them, or organize
a progression of goals with a corresponding funnel visualization report. When we surveyed
email marketers, all of whom are doing the exact same thing, there was a significant amount of
disagreement between them about how “conversion” should be calculated. When presenting
conversion figures, make sure you explain to your audience how the conversion figure has been
calculated. If you end up comparing two conversion rate figures, you can cause major analytical
errors by comparing conversion rates that have been calculated differently.
Chart: Conversion—One Metric with Many Definitions
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In order to track conversion events, you need a website structure that allows for accurate
tracking. More robust analytics programs like Omniture’s can factor far more data into tracking
than the free programs that rely on html tags. In addition to showing that a user went to a page,
Omniture can capture data input by a user on that page. Since analytics programs like Google
Analytics can only record a page visit, it’s really important to structure HTML websites with a
different page for every possible conversion event trigger. A good rule of thumb for simple
websites with simple reporting is to make sure your site has unique “thank you” pages at the
conclusion of each conversion activity. This way, if a customer buys product A for $5, they get
the product A thank you page and ping the $5 conversion event counter, while product B buyers
that spend $100 get the product B thank you page and ping the $100 conversion event counter.
Setting up proper conversion goals is the most important part of setting up an analytics program,
so take the time to get it right. If the average customer that comes to your site takes a long time
or multiple visits to convert, make sure you’re not limiting your definition of “conversion” to the
activities of a single user’s web session. As you can see in the chart below, 23% of email
marketers are tracking the customer lifetime value of their email list members, vs. the 53% that
track immediate sales.
Chart: Financial Metrics Tracked by SMB Email Marketers
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Strategically speaking, tracking individuals over time with either cookie data, email address, or
site registration may make more sense, because it can give a better idea of how the marketing
program works over time. If it takes 20 emails and 4 visits to the website, condensing the
lifetime of marketing touches and individual sees into that single conversion metric can help in
two ways; your conversion rates will be higher, painting a better and more realistic story for how
effective your marketing is, and higher conversion rates are easier to test (more on this in the
testing section).
Analysis
Initially, analysis can be daunting. The huge range of reports that are available from even the
simpler analytical programs can make it difficult to determine where to start first. Breaking
down what you need to know into simple, methodical steps that address areas you can easily fix
is the best way to start. Start by answering these simple questions:
• Visitors: Who is coming to the site?
• Traffic: Where are they coming from?
• Content: What are they doing on the site?
• Goals: Are site visitors doing what you want them to do to further your business
goals?
Visitors: Who is coming to the site?

You want to look at visitor type to see if the “right” people are coming to your site (i.e. those
who are interested in your product and might actually convert to a sale at some point—not just
burn through your PPC budget without buying anything). The first metric to check to find out if
the right people are coming to the site are conversion and bounce rates. If bounce rates are high,
meaning people leave almost immediately after arriving on the site, there’s clearly a disconnect
between why people are coming to your site and what your site has to offer. In order to
understand if this is happening because your website needs work or your marketing is simply
attracting the wrong kind of people, you’ll need to dig further.
Basic Segmentation & Filtering

Segmentation is the process of separating the aggregate data into discrete pieces for comparison,
such as:
• Converters vs. Non-Converters
• Ad-group A clickers vs. Ad-group B clickers
• New visitors vs. Repeat visitors
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Segmentation is generally going to be the first step in determining why something is happening.
If you’re experiencing high bounce rates you’ll want to start by segmenting your data. The three
groups above are the most common ways to segment when looking for easy comparisons.
Regardless of the segmentation strategy you use, what you’re trying to find out is this: if you
isolate site visitors that convert vs. those that don’t, what variables exist that differentiate them,
and can these variables be fixed to get rid of the non-converters or turn them into converters?
If clickers from ad-group A are converting, but clickers from ad-group B are not, it’s possible
that there is something misleading about the copy of ad-group B. For example, if an ad says
“click for a free sample” but upon clicking the individual finds that the free sample is dependent
on a purchase, they are likely to bounce and not convert. The easy fix is to change the ad text to
say “free sample of X with purchase of Y”.
Another possibility is that your landing page could use some work. If conversion rates are low
across the board, it’s likely that visitors are giving up somewhere in the process. Take a look at
an exit page report to see which page visitors are abandoning the site from. That page may be
the culprit.
If you have a lot of repeat visitors that are not converting, yet new visitors are, ask yourself why.
It may be that your own employees are using the website, being counted as repeat visitors, and
artificially driving up the visitor count. It’s not uncommon for employees to use the company
website as their browser home page. This means your home page will show way more visits
than any other page on your website, yet also show a very high bounce-rate, since the employees
will open the browser, load the page, but then immediately leave the page to do whatever else
they came online to do. In cases like these, rather than segment your analysis to separate out
employees, it may make more sense to filter them out of your data set altogether.
Filtering
Filtering is the process of excluding certain visitors from the data entirely. The most common
use for filtering is to remove your own employees, but you may also want to filter traffic from
other countries, or even from automated spider or bot traffic. If filtering out your own
employees is the problem, the organization may want to maintain a completely separate website
for them—create one site that caters just to your organization’s employees, and one that is
specifically for marketing purposes. However, not every organization has these kinds of
resources, which means it’s up to the analyst to adjust their data.
The easiest way to filter individuals is by IP address. By blocking the IP addresses of all
corporate offices, it’s possible to ensure that usage coming from these offices doesn’t show up in
the data. However, for companies with large, external sales teams that access the site often, or
companies that have a lot of remote workers, filtering out internal traffic can get very
complicated very quickly.
Sample-based Tracking & Analysis

Panels
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Web analytics programs can tell you how many people use your website by counting each and
every user of the site—this is known as census-level reporting. Some information about the
visitors to a website can’t be gathered at the census level. For information like demographics,
it’s necessary to rely on a sample. A sample is when you take the information from a random
fraction of the total visitors, and then project their information onto the larger total group.
Some analytics programs have rudimentary demographic reporting built in to their standard
reports. Google Analytics can give you some aggregate level demographics, such as the
language of your site visitors. Quantcast’s analytics program offers very simplistic analytics
reports, but because they maintain a large panel of users for whom they collect lots of
demographic information, they can give you fairly in-depth demographic reporting.
Surveys
Another common tactic to find out more about your website users is the exit survey. Using
JavaScript, you can launch a survey to a small sample of your site visitors as they leave the site
in order to find out who they are as individuals.
You can also specifically survey purchasers with a post-purchase email survey, or specifically
survey those who immediately bounce from the site. By doing this, you can get far more in-
depth insights into who is coming to your site, what it is about your website or product they like
or dislike, and how they differ in by segment in aggregate or as individuals.
Traffic: Where are they coming from?

Finding out what external websites or referring links your traffic is coming to your website from
is a fairly straightforward process, and is included standard in most analytical programs. A good
habit to get into is to look at incoming links and note any that show dramatic change week over
week.
One of the more interesting reports is IP tracking for businesses. If, for example, someone
accesses your website from within the office of a prospective customer, the IP tracking visitor
report will show that. Quantcast offers a free version of this report with limited capabilities.
Other paid services like Demandbase do a pretty amazing job of telling you exactly where your
website visitors are coming from by matching the IP address of your website visitors to
individual companies, and even providing contact information for your sales force to follow up
on if they choose to.
Figuring out which of your online marketing tactics website visitors clicked to get to your site is
also fairly straightforward, assuming you have already made sure all your email, search and
online advertising is trackable via direct click. More difficult is factoring in an indirect visit by
using a cookie, or visits driven from offline marketing with unique paths to your website. What
gets really complicated is attributing exposure to your various marketing tactics when they were
exposed to multiple exposures of different ads on multiple media.
How, for example, do you attribute a sale to an individual who first came to the website from a
unique URL used in a TV ad, again from a paid search ad, then finally converted after clicking
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an offer in an email newsletter? There is no easy answer to this question, and just as analysts
must assign weights to the various conversion goals on their website, it’s necessary to assign
weights to the various ad exposures among converters. Judging by the following chart there is
still quite a bit of confusion as to how to go about doing this.
Chart: How do you currently attribute online ad exposures to site visitors?
Even when analysts go to great lengths to factor in all assumed exposures, clicks, and latent
view-through exposures, there will still be some error in the estimation. Unfortunately, there’s
simply not much that marketers can do about this. Assumed exposures (i.e. untrackable TV ad
exposures) just aren’t possible to track, and even online exposures are difficult. According to a
study on cookie deletion by comScore, 31% of the individuals they tracked for a month deleted
the cookies on their browser at some point. For analysts trying to make sense of long purchase
cycles, during which an individual may visit a site many times over a period of months before
purchasing, this can be frustrating. At some point, analysts must simply accept a certain amount
of uncertainty and smooth it over mathematically with statistical models that incorporate the hard
data that does exist.
Among the marketers we surveyed, most cookies have a life of only 30 days, after which they
expire and are automatically deleted from users’ browsers. The second most common length of
time set for cookies was 90 days, while a few rather optimistic marketers kept cookies active for
as long as 365 days.
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Chart: If you use cookies to track ad exposure among site visitors, how many days are the cookies set to last
for on consumer browsers?
When deciding on the lifespan of cookies for your own marketing campaigns, you should
probably make the lifespan slightly longer than your average purchase cycle, then factor in an
assumed rate of cookie deletion.
Content: What are they doing on the site?

The most common report for figuring out what people are doing on your website is to run a
click-path analysis. This report will show the average path taken through the various pages on
your website from start to finish. An interesting variant on this report is to segment by source.
By doing so, you can see how interest in the content on your site varies by where the individuals
arrived at your site from. This knowledge can be used to streamline your website or inform the
copy of your ads in order to target each source with the most relevant information to them.
A similar method is to look at time-spent. Websites with only a few pages will often have little
variation between segmented click-paths. A better metric in these cases is time-spent, since it
serves as a more accurate indicator of the content that caught an individual’s attention.
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Actions that trigger upper-funnel conversion events can be particularly interesting when
compared vs. source or segment. Are visitors accessing your website on an iPhone
overwhelmingly winding up on the store locator page? Are clickers from copy stressing
discounts buying one product, while searchers using branded keywords are buying another?
There are myriad applications for this type of report, and nearly infinite applications for the
information gathered.
Finally, if you can’t figure out what your website users are or aren’t doing on your website, ask
them. Exit and post-sales surveys can easily multi-task as vehicles for learning more about what
the intent of the user is when using your website.
Goals: Are site visitors doing what you want them to do to further your business
goals?
In the end, everything boils down to this. All your other reports are simply building the case for
whether or not the variables they measure are helping or hindering your business goals. Once all
your other reports are in place, you want to start grading performance of every variable you can
possibly control or affect—figure out which sources, or combination of marketing materials
result in the best conversion rates. You can use this data to adjust marketing spend in favor of
high-conversion options.
If you are just getting started with analytics, it’s important to remember that it’s probably going
to take some time for enough data to build up to be useful. High traffic sites will have shorter
waits, since larger volumes of users and high conversion rates will result in statistically
significant levels of data faster. Be careful not to make decisions based on conversions until
you’re absolutely sure that the data is meaningful. Most analytical programs will automatically
indicate whether data has reached a level of statistical significance indicating that the data is
actionable, but just in case, we have included a statistical relevance tester along with this
document. It’s important that analysts set expectations within the organization for how long it
will take to get enough data, and equally important for impatient marketers not to rush the
process.
Dashboards, Automation & Testing

Once all tracking for the site is functioning properly, obvious issues have been ironed out, and
external marketing is tracked in some fashion, it’s time to set up a dashboard to monitor vital
stats, and create individualized reports for the appropriate parties within the organization. Aside
from keeping an eye on how everything on the website is working, one of the most important
functions of the web analyst is to have the common sense to get important data into the hands of
those who can affect positive change. That means that the analyst needs to understand who
within the organization values what information.
21
Most of the time, the website will chug along with little drama. However, keeping an eye on the
key indicators to watch for unexplainable changes is an important function of the dashboard. By
setting up an easily observable view of your most important metrics it’s possible to quickly dive
deeper when strange movement occurs. When this happens it’s important to understand why, but
otherwise it can usually be left alone
Rather than check the dashboard all the time, you can create weekly reports that get emailed
automatically to everyone that needs to see the info throughout the organization. In a small B2B
organization, the sales team may want to see an IP address report that shows the companies that
are visiting the site. The CFO may want to see a report of sales by product. In a larger
organization, the marketing team may want to see a comparison of how many direct URL entries
came in from one TV ad vs. another. The possibilities are fairly endless. By customizing and
automating the data that each team within the organization sees, it ensures that those with the
most immediate knowledge of the drivers behind the data make the call as to whether action
must be taken. If, for example, a print ad runs with a special offer URL, the marketing team and
analyst must work together to 1. be aware that the ad is running and watch for traffic and 2. take
action if traffic is unexpectedly low or high.
Automating weekly reporting via email frees up the analyst for the important work of controlled
testing. The marketing team may notice that one TV ad seems to be performing better than
another, but they do not have enough data to be sure. Rather than act immediately, they should
bring the hypothesis to the analyst, who can control for external factors and run controlled tests
to determine if the difference is real or not.
In the absence of external teams bringing hypotheses to an analyst to test, the analyst will need to
take the initiative to isolate problem areas first and try to fix them.
Testing & Benchmarks
What to test depends on where your marketing needs work. For example, if conversion rates are
low, test the website content, and if click rates are low, test the advertising. Hold off on tests that
will only provide tiny incremental improvement and focus on the tests that are most likely to
yield large increases in sales or conversion. These will generally be the variables that are the
closest to the actual sale, such as landing page forms or copy. Tests that look at variables like
browser resolution are helpful, but generally only result in small improvements to the user
experience, and tiny improvements to the bottom line.
When deciding what to test, one helpful piece of information is to know what “normal” is by
establishing benchmarks. Google Analytics offers some benchmarks comparing traffic data to
other websites that it deems similar to your own. MarketingSherpa offers some industry specific
benchmark rates for conversion as well, which can be found at sherpastore.com. As you grow
your internal data-set, you should begin establishing internal benchmarks of your own.
Test Validity
Controlled scientific tests are not the same as the best guess (hypothesis) of an informed analyst.
In a controlled test, all variables but the test variable should be identical—this rarely happens in
22
real life, so pains must be taken to control for any differentiating non-test variables. The same
people should be doing the same thing at the same time, with one difference in the experience
left to influence behavior. When the “Winner” of a test wins by a small margin, that test is rarely
predictive of future success by the winner due to random variance—this is why statistical
significance testing is so important.
The laws of statistics tell us that sample size (the number of instances in a test) and the difference
delta (rate A minus rate B) are the two biggest factors in determining how predictive the results
of a test will be. A test with group A winning 3 times and group B winning 7 times will not be
predictive of anything. The same test performed again would likely have completely different
results because only 10 instances are observed. If group A wins 3 times, and group B wins 70
times, that would be predictive, because the difference delta is large enough that we can be 99%
sure that random variance is not to blame. This is why time is such an important variable when
testing. You’ll need to allow enough time to pass to ensure that you get enough data for
statistical relevance, assuming a very small difference, such as a conversion rate of 3% vs. 4%.
For this reason, it’s much more practical to test radically different concepts. The more different
the concepts tested are, the greater the difference is likely to be, and the less time and data you
will need to collect statistically significant, predictive results. If the variable your test is isolating
is incredibly subtle, it could easily take years to achieve predictive results.
Many analytics programs have statistical testing built in to their interface, but it’s up to you, the
analyst, to understand their meaning and manage the expectations of others within the
organization.
Using the included stat tester tool you can plug in the differences you expect or are seeing early
on in order to predict how much data, and how long it will take to collect that data, in order to
plan your testing schedule realistically.
23
Testing Calendar
The more tests you run at once, the longer it will take for any of them to finish. If you create a
testing schedule and focus on one test at a time, it’s easier to stay productive and continue to
adapt to changing market conditions. You can use the schedule below as a rough guide, but
should adapt to the circumstances of your own site. If you have extremely high volume of site
visitors, you can speed up the testing schedule, or partition your visitors into multiple
simultaneous tests. For websites with very little traffic, you may need to take more time than we
suggest or run fewer tests.
Month 1 Allow time for data to collect. Ideally, wait for at least 100
unique KPI events, per KPI event on the site (5 KPIs = 500
events)
Month 2 Make sure reporting is accurate and unambiguous. Set

benchmarks. If different systems report different numbers,
find out why and whether to incorporate variance or fix.
Month 3 Isolate weak spots in the conversion funnel. If clicks are low
and conversions high, plan ad copy test. If clicks are high and
conversion low, plan landing page test or exit survey.
Month 4 Repeat Month 3 testing strategy, but refine further
Month 5 Once marketing is doing a good job of getting people to the

site, and the site is doing a good job of converting them to
sale, look for small ways to incrementally improve the user
experience.
24
Conclusion
Web analytics has a lot of moving parts, but by taking the time to organize all the tasks that go
into it, it can be quite manageable. Everyone should start by breaking down analytic tasks into
manageable chunks that are spread over a period of weeks or months. As you figure out what to
track, spread the net as wide as possible, tracking everything that seems applicable. But, once
you get into analysis, quickly drill down to a few key metrics and focus on actionable reporting.
Once the analytics framework is in place, work with others in the organization to test discrete
pieces of the overall marketing campaign, in an order that takes into account the relative
importance of the test on the bottom line. Big tests, and tests of elements closest to the point of
sale, will always be most likely to yield the most profound results.
As an analyst, always be looking for meaning. It’s important to know what happened, but it’s
more important to know why it happened. If you find yourself getting overwhelmed, break
down reporting requirements into:
• Traffic – where is it coming from and which traffic is best?
• Content – is it doing its job or can it be better?
• Conversion – are there broken links in the chain from awareness to sale?
It’s very important to document analytics requirements and share them with all involved parties.
The website is used by everyone a little differently, so no one person can know everything that
goes on. It’s up to the analyst to act as a liaison between all the involved parties. For example:
the tech department helps with coding and informs of changes to site; marketing supplies
campaign dates and goals; and sales supplies offline lead and sale data. Analytics should ensure
that all parties are working towards non-conflicting goals, and are paying attention to the right
metrics.
Finally, don’t bite off more than you can chew. It’s fine to start small and add layers of
complexity over time. There’s nothing wrong with practicing on a free analytics program before
graduating to the big leagues if and when it makes sense to upgrade. The same goes for testing
and reporting. Simple tests and tightly focused reports are far more likely to provide useful
information. Where you should invest the most time and energy is ensuring that tracking is
accurate and conversion goals are set up correctly to accurately reflect the consumer path to
purchase.
25
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Guide to Getting Started with Web Analytics

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Dashboards, Automation & Testing .......................................................................................................21

1. How to get a simple analytics program set up

The Big Picture – What is the Function of Web Analytics?

How is Analytics Being Used By Others?

Chart: How would you rate your analytics setup at present?

Chart: Incidence of Analytics Usage Among Search Marketers

Table: Common Terms & Metrics for Web Analytics

Page View Number of times a page is viewed

Visit/Session All activity of an individual visitor within time allotted for a

Visitors Total Sessions

Unique Visitors Total Visits from Individuals—multiple sessions not counted

Duration Time spent by an individual during a session

Metric (Ratio) Numerator Denominator

(CTR ) Click-through Rate Clicks Impressions

(VTR) View-through Rate Visitors carrying a cookie from Unique Impressions of

an un-clicked referrer cookied referrer

Chart: What metrics are online video advertisers using?

Picking an Analytics Program

Chart: Use of Analytics Programs Among Search Marketers

Chart: What Search Marketers Value Most in an Analytics Program

Creating Trackable Marketing

Tricky Tracking – Flash & Rich Media

Defining Conversion – Creating Goals

Chart: Conversion—One Metric with Many Definitions

Chart: Financial Metrics Tracked by SMB Email Marketers

Visitors: Who is coming to the site?

Basic Segmentation & Filtering

Sample-based Tracking & Analysis

Traffic: Where are they coming from?

Chart: How do you currently attribute online ad exposures to site visitors?

Content: What are they doing on the site?

Dashboards, Automation & Testing

Month 2 Make sure reporting is accurate and unambiguous. Set

Month 4 Repeat Month 3 testing strategy, but refine further

Month 5 Once marketing is doing a good job of getting people to the

Sign up for newsletters at www.MarketingSherpa.com.

Email Essentials 101 Training:

MarketingSherpa 2009 Social Media Marketing & PR

Social media is changing the way companies communicate in

MarketingSherpa Marketing With Video Report:

Inspired by the explosion in video formats and venues

MarketingSherpa 2009 Email Marketing Benchmark

Practical data to improve your email budgeting, list growth,

MarketingSherpa Search Marketing Benchmark

New Handy Guide gives you: 1,928 marketers surveyed; 170

MarketingSherpa Ecommerce Benchmark Report

Landing Page Handbook 2008

Newly updated and expanded for 2008, MarketingSherpa’s

Plus MarketingSherpa Toolkits:

Join today for the discounted introductory annual price of $

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