What is Web Analytics?

What is Web Analytics?

Balasingam-Chow Yu Hui (yuhui.chow@xm-asia.com)
What is Web Analytics? According to the Web Analytics Association, web analytics is: “the measurement, collection, analysis and reporting of Internet data for the purpose of understanding and optimising Web usage.” While that provides a satisfactory, intellectual understanding of web analytics, it does not portray what web analytics encompasses on a day-to-day basis. There are processes, tools and hypotheses to consider when crafting an effective approach to web analytics. And at the end of the day, web analytics must answer basic marketing questions, such as impact on customers’ perceptions, change in sales and long-term brand-building. It is easy to forget that the web, like magazines, television and outdoor media, is another key marketing channel. In the twenty-first century, the digital landscape plays an important part in marketing, but it is also becoming very confusing. All around the world, we see the trend of increasing numbers of people going online and interacting at a deeper level. Add mobile to the mix and it is even easier to get bogged down by technology and numbers. So it is useful to take a step back and understand the practical side of web analytics before the incoming tidal wave hits us with full impact.

In the beginning, log files recorded hits
It is said that the web – and, by extension, the entire digital channel – is the most measurable medium due to its inherent strengths. And marketers like numbers. Even today, we still talk about circulation and ratings. With the web, marketers like to talk about reach. The first web metric that people think of is the “hit”. As the name implies, a hit refers to each and every request to the web server for content. Marketers liked hits, because it provided a nice round number that represented reach. It was like talking about a magazine’s circulation; the larger the number, the louder you could boast about your website’s usage. However, hits have become meaningless in today’s multimedia web. If a single page contains three images, that’s four hits for that page, but really only one “page view”. And then, marketers started to think in terms of individual people, rather than just the amount of content that was served up. That brought about greater awareness of the “visit” metric. But the original hypothesis remained: the larger my site traffic, the louder and more often I could boast about it. This is web analytics at its most basic level. It paints a nice picture of © Copyright 2010 XM Asia Pacific Pte Ltd. All Rights Reserved. Page 1

What is Web Analytics?

whether, in the first place, your website is being visited. After all, very few marketers build a (publicly accessible) website with the intention of not having traffic. Unfortunately, very little useful information can be gleaned from site traffic. For example, though a television show could have 100,000 viewers, what marketers really want to know is whether those viewers watched advertisements in that show. Unlike television though, the web is an interactive medium. And since the web is supposed to be the most measurable channel, marketers gradually demanded more insights. This simple request – understanding site activity rather than mere reach – pushed web analytics forward into a stage that made it more useful and relevant to modern marketers.

Every conversion begins with a single click
Anyone who has used a website – as opposed to just going to one page and leaving immediately – generally moves from page to page. To most of us, we just think of it as consuming a series of content in a seemingly random manner. But to the web analyst, those actions have produced a journey, or “clickstream”. Your interaction within that website was like a driving a car from place to place. Sometimes you travel on highways, sometimes you take the back lanes. You use the path that makes the most sense to you. To further refine the idea, some websites make use of “ideal journeys”, that is, clickstreams/journeys that are key to measuring the effectiveness of a website. A common example of a clickstream is a registration process. Marketers want visitors to use such journeys, so they will want to ensure that there are as few drop-outs at each stage of those paths. However, there has generally been decreasing relevance of clickstreams, let alone ideal journeys. For example, increasing end user usage of search engines have resulted in visitors being able to find your content without following the prescribed journeys. You may want visitors to go from A to B to C, but your visitors just jump straight to B from a search engine result. Does that mean your journey isn’t working? Savvy marketers will also recognise that a website does not exist in isolation. Visitors arrive at websites somehow, like referrals from friends or advertisements or remembering the addresses from a billboard. These “sources of traffic” also affect usage of the journey. Going back to the analogy of driving, there may be a single highway, but with multiple slip roads leading into it. As a result, it is more relevant to identify areas of the website that serve two purposes: they are relevant to visitors, and they meet the site’s objectives. Ideally, these two purposes should be measured with the same events. Such an analysis moves reports away from clickstream and towards “conversions”.

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What is Web Analytics?

On the highway, you see landmarks that guide you to your destination. You don’t need to know each and every turn on the highway. You just need to ensure that you follow the landmarks in successive order. Similarly, conversions are the landmarks along the journey. A registration process may require the visitor to go through four pages, but what you want to know is the share of visits between the first and last pages. If the share doesn’t meet your target, then you can analyse the individual steps in between to find out what’s wrong. And now, you should have a nagging little question at the back of your head: “How do I identify the ‘landmarks’ in my website?”

‘Tag’ is not just the name of a watch brand
In general, there are two main ways to identify pages in a website. The oldest method is based on log files, which were introduced earlier. The tools parse these log files, pulling out records that pertain to pages only (instead of images, CSS files, etc.), then present the information in a manner that is useful to marketers. While that is useful, there are two things to note about log files: 1. You need to store the files yourself, which may be a key factor if data security is of importance 2. There is generally no one method for recording data in log files. Though there are standards for log file formats, IT administrators can customise these formats further. Especially due to the second reason, analytics tools demand that you have complete control over your log files, so that they can crunch the numbers correctly. Due to this and the abovementioned issue of “hits”, log files are usually not recommended for web analytics. There is certainly nothing against the use of log files, but JavaScript tagging has generally been shown to be easier to manage. With JavaScript tagging, the webmaster needs to embed a set of JavaScript code, called “tags”, into the web page. When that page is loaded in the end user’s browser, the code is executed, and the web analytics tool logs the visit (and other information). Since the tag is in a format specified by the tool, it is virtually guaranteed that its reports will be accurate, as long as the tags are implemented correctly, i.e. no missing tags, no misspellings, etc. This might seem overly manual and tedious when compared to log files, especially for a large website. Fortunately, tags can be automatically created for each page through serverside programming. Even if the tag is absent, web analytics tools can usually “fall back” on your page’s URL. Though JavaScript tagging would seem to be more analytics-friendly, we unfortunately don’t live in a perfect world. There are two significant issues to consider with this method. As the name implies, the end user’s browser needs to have JavaScript enabled in order for the tag to execute. Also, cookies need to be saved so that the analytics tool can more accurately record visits, paths and conversions. © Copyright 2010 XM Asia Pacific Pte Ltd. All Rights Reserved. Page 3

What is Web Analytics?

Fortunately, the percentage of users who don’t have JavaScript enabled or don’t save cookies is quite small (usually less than 5% of your website’s visits), so the impact is not too significant for accurate analysis. With tagging in place, the web analytics tools can do their work of crunching the numbers and generating the reports. You can then create your own dashboards and customise the reports according to your needs, e.g. reports based on your conversions. Now, you have an arsenal of metrics and reports at your disposal to measure site activity: • page views and visits (and time spent, to understand if your visitors are hit-and-run or really consuming your content) • share of successful conversions / events • click-through rates from traffic sources, which can be built up to conversion rates based on your ideal journeys And you’re ready to wonder how well the website performed. Let’s say you had 100,000 visits. That’s a huge number, certainly more than you can count on your fingers and toes. But is it really significant?

Comparing apples with apples
For greater clarity, reports need to be contextualised. What is good or bad cannot really be identified by looking at a number alone. Though you might have a general feeling of performance, web analytics is ultimately a science that relies on facts to justify its findings (thus the suffix “-ics” in “analytics”). Contextualisation can be time-based, like whether your share of conversions is increasing or decreasing. Trends, especially when illustrated with graphs, are a powerful method for signifying what’s working and what isn’t. Even outside of web analytics, it is common to hear of comparing against historical data, for example, comparing today’s climate against what it was 30 years ago. However, trends look only at what is going on within the same website alone. There is still the rest of the World Wide Web to consider. Even brick-and-mortar retailers compare their revenue against the other guy’s. Industry benchmarks provide a convenient baseline upon which results can be measured against. They’re something that everyone can use equally well and agree on. But such benchmarks can be overly generalised, even for the same niche. To overcome this, some analyses make use of competitor performance for improved industrial contextualisation. As always, whatever is measured and analysed should be mapped back to the site’s objectives, because you want to know how well your goals were met (which is what you paid for in the first place!). This information is already much more valuable to marketers than mere reach. You would now be able to identify which parts of your website are working to meet your objectives, © Copyright 2010 XM Asia Pacific Pte Ltd. All Rights Reserved. Page 4

What is Web Analytics?

and which aren’t. And then you are better able to report on that magic number: Return on Investment. Which leaves you with just one question: “What else do I need?” (Which leads to two other questions, “You mean what I have isn’t enough?” and “Are you nuts???”)

Which, where, how, what… Who? Why?
So far, all of the discussion has revolved around quantitative data. We have a number for this and a number for that. From there, we can calculate reach, sales, ROI, etc. What we lack is the qualitative data, i.e. who the visitors are and what they’re thinking about. Web analytics has rarely touched upon such information, relying instead on actual traffic data. After all, this data represents actual site usage, rather than theories and hypotheses. Unfortunately, such data only provides a bird’s eye view of the site activity and does not provide the level of granularity that marketers desire. Marketers have long recognised the importance of segmenting and targeting. It is a basic requirement to develop any actionable marketing plan. In simple terms, if you don’t know who your audience is, then you don’t know what to say or how to reach them. Similarly, in web analytics, understanding who visits your site enables you to fine-tune your content to match their needs. Are a lot of teenagers coming in? Incorporate entertainment. Or maybe you have a lot of seniors? Increase the font size. Such demographic profiling can be obtained from a variety of sources, like on-site surveys, registration data or inviting visitors to a panel interview. (Depending on what content is featured on the site, you could also deduce the segments based on traffic behaviour.) Whichever method is used should help you to figure out who uses the site. Surveys are also useful in helping to answer the “why” question. You can glean some insights from traffic data, but you would be hard-pressed to really know what’s running through your visitors’ heads as they use your site. For example, time spent provides an idea of whether visitors are reading the content, but it doesn’t say how useful the information was to them. And though you may know where your visitors come from, e.g. search engines or a review site, you don’t know why they decided to come to your site and not another one. So, with both quantitative and qualitative data in hand, a more complete analytics report can be prepared and presented. But web analytics does not stop at the report delivery stage. It continues on to another important, but often woefully underutilised, stage in web analytics – optimisation.

How many ways can you say “optimise”?
It is common knowledge that a website that does not see any updates, whether in content or design, will become less utilised and relevant. Even search engines will generally give © Copyright 2010 XM Asia Pacific Pte Ltd. All Rights Reserved. Page 5

What is Web Analytics?

preference to regularly updated websites. Therefore, good planners plan for routine site optimisations, usually on a fixed schedule (monthly, quarterly), to ensure that the website remains relevant to its audience. To the web analyst, though, optimisation goes beyond sourcing for content or introducing a new design template. Instead, he needs to think about how the website can further improve performance based on its preset objectives and key performance indicators. To achieve this, elements at the block level in individual pages are tested to determine which combination produces the best results. Elements can be text blocks, images, colour, and even placement of these items. (Some systems can also deal with Flash optimisations.) Results are measured according to the site’s objectives, e.g. increase registrations. The two most common forms of optimisation are A/B testing and multivariate testing. “A/B testing” streamlines the combinations of elements into two (thus combination “A” and combination “B”). Although this may be done by testing two entirely different pages (i.e. different copy, layout, etc.), it can also be achieved at the elemental level, that is, testing between two different images but keeping the rest of the page the same. “Multivariate testing”, on the other hand, is like A/B testing on steroids. It tests as many elements as you can produce creatively (and within budget). That means you can have five different text blocks, 10 different images, three different layouts, and more. The system takes all of these elements and tests them in various combinations. Though this is more complex in scope and management, it can be argued that clearer insights can be derived at a more granular level than A/B testing. Fortunately, in both cases, optimisation technology has improved to the point where tests can be automated quite thoroughly. Manual work is generally only required to produce the creatives, set up the experiment, and collate the findings. As such, analysts no longer have to rely solely on their own research or the demands of the HiPPO (highest paid person’s opinion). Because testing and optimisation make use of live data from real visitors, it takes a lot of guesswork out of the equation to produce the most effective website. It is important to remember that optimisation isn’t a one-time affair. Like collection of data, it should be treated as a continuous process. This is a reflection of human psychology. Our tastes and habits change, and the websites we use should improve in tandem to meet those changing needs.

The magic 8-ball says…
And the Web, as a whole, continues to evolve too. Emerging technology like AJAX has allowed us to interact with content in new and interesting ways. User generated content continues to take the power of production out of marketers’ hands and into the customers’. And the web browser continues to pack more and more features to meet the needs of its users. One of those needs, which can have far-reaching implications on web analytics, has to do with privacy control. Internet users are gradually becoming aware of the need to restrict what information they provide whether © Copyright 2010 XM Asia Pacific Pte Ltd. All Rights Reserved. Page 6

What is Web Analytics?

voluntarily or involuntarily. This includes website tracking, which has an impact on analytics. All modern browsers contain cookie-blocking technology. Some browsers are able to block advertisements. Tech savvy users can also disable JavaScript, upon which many web tracking tools rely, and even spoof their IP addresses and other details. Web analytics will need to address all of these issues as they arise, whether related to privacy, technology or otherwise. While the tool providers, from stalwarts like Omniture and WebTrends to new kids like Clicky, have their work cut out for them, analysts will still have to deal with the real task of reporting and explaining website performance to marketers. These are still early days to say how we will go about doing so. However, just as web analytics was able to transition from “hits” to “conversions” and now to “profiling” and “optimisation”, it is likely to also be able to overcome these emerging obstacles, hurtling us into newer and more exciting times.

Tools of the Trade
These are the tools that XM Asia Pacific has familiarity and expertise with. Reporting area Site analytics Media Search engine marketing Survey A/B or multivariate optimisation Tool Google Analytics, Omniture SiteCatalyst DART for Advertisers Omniture SearchCenter Vovici, OpinionLab Google Website Optimizer, Omniture Test and Target, Interwoven Optimost

And don’t forget your good friend: Microsoft Excel (or for open source aficionados, OpenOffice Calc). Balasingam-Chow Yu Hui has worked as a web analyst for more than two years at XM Asia Pacific Pte Ltd. When he’s not working, he’s analysing and optimising his racing performance on his Wii.

© Copyright 2010 XM Asia Pacific Pte Ltd. All Rights Reserved.

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