| Visits, hits, pageviews and profitability |
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Today a website is your most important marketing tool. Especially in an industry with a high internet usage such as the travel industry, or you serve (or wish to serve) a client base anywhere but a very small town. This article will help you change from a Jackson Pollock splatter style to a neo-realist precise technique when applying your advertising budget to the web canvas. We'll show you how to compute the effectiveness of your ad spend. If you are not regularly collecting and reviewing your website statistics, stop reading and contact your web designer or hosting provider and get started. If you are... Defining and redefining your site (you do update and freshen it regularly, don't you?) can be expensive, and marketing and promoting via directories and advertising services even more so. This is where gathering statistics and reviewing them on a regular basis is so important. A checklist for gathering statistics:
Hit Counters are not useful. They give a false impression of activity to you and your visitors. Your customers really don't care about how many hits that have been to your site. They care about the content, the quality and your brand. For your traffic analysis needs hit counters do not contain enough information to help you make effective and intelligent marketing decisions. Also you'll see that almost no current well-designed site still has a hit counter. They shout "hokey" to your visitors, like blinking buttons and garish colors. So remove that hit counter and replace it with something that helps convert visitors to customers. If you have been looking at your stats, you will see that there is an enormous amount of data available. Only a handful of those figures are of ongoing interest in relation to your number of visitors. The rest are of vital importance to your online business but are topics for other articles. Key questions for traffic analysis
Not all stat packages can answer all of these questions. Let's dig in: #1 How many visitors Some Traffic Analysis Definitions: Visitor an access to your site from a particular computer address. These include good things like search engine (Googlebot, and slurp, to name a couple) and bad things, like hackerbots and spambots that look for email addresses and vulnerable sites. The better stats packages do not count these as visits. Note: A person that checks your site at home, at the office, and a coffee shop Wi-FI hotspot will count as multiple visitors. A good stats package will separate out the automated visitors that visit your site. Repeat Visitor another access to your site from the same address, usually the same 24 hour period. This is a good thing. Pageviews the number of times a page is presented to a browser. Usually the total for all pages on the site. Most useful or visitor behavioral analysis, but unfortunately it is all that is provided by many stat packages. For example, one site recently had 10,010 pageviews, and 3,389 of those were from bots, worms, spiders or other non human inhabitants of the internet. That would really distort your traffic analysis if your package did not track that information. Hit - The transmission of one piece of information from your website to the visitor's computer. If your front page has 10 pictures, a file of javascript, a CSS file and graphic links in your menu, your visitor's browser may access your website 25 times to get all the information needed to display your page. If their browser cache is on, the next time they visit they may get fewer. If you change your page, with new links or images, the counts will change again. So as your site changes over time (which it should, right?) historical comparisons become useless. One site I maintain receied 2,130 visits, 10,010 pageviews, and over 111,000 hits in one period. When looking at traffic analysis, only the visits matter. Sales conversion, site efficiency and user experience analysis will make use of the other numbers, and more data as well. How many repeat visitors? Repeat visitors tell us something about the type of shopper we have. It may be that you want to help returning users get to the key information or products they are looking for. This concept was the basis for Amazon.com's recommendation engine, one of their early key features. If your repeat visitor's are higher or lower in different periods, compare that to the number of conversions. If lower, maybe you are making it easier to purchase on the first visit. If you have higher repeats and lower sales conversions perhaps it is getting harder to buy and people are giving up. This research will require additional traffic pattern analysis within your site. Traffic compared to same period last year. Compare this year with your ad and promotion metrics from last year and see whether the changes have improved your traffic counts. If you can pinpoint the reasons for the change you are doing a good job as an online marketer. Where do they find my site? Analysis of referral sources is a key factor in making good decisions on marketing expenditures. This subject needs an article of its own. Note: When looking at referrals in your statistics, be aware that the referring site might link from several different pages, so you may need to search through all the listings to identify all referrals from that domain. For example, your site may get referrals from www.somesite.come/index.html (the home page) and also www.somesite.com/links.html (their links page), so you'll need to count both to get the true value of the relationship to that site. Now that you have the numbers, what to do? You can answer questions likes these:
If you take the number of visitors divided by the number of online customers, you can have an estimate of the number of online visits/customer. Take that times the average order size and you have the gross revenue value of a visitor. Example
Taking it a step farther, each visitor represents $5 in gross revenue. If your markup is 50% then gross profit is $2.50 per visitor. If a site that refers quality traffic costs you less than $2.50 per visitor you will make a profit on that visitor. If it costs you less than your advertising budget figure per visitor you will make a non-dilutive profit on that visitor. This can help you determine reasonable cost-per-click for paid advertising.Last month you had 1,000 visitors and your shopping cart stats show you had 50 customers with an average order size of $100. Assuming that visitors are somewhat targeted to your products or services, it takes 200 visitors to get one customer. (1000/50=200). Your customer conversion rate is therefore 5%. Example
With conversion ratio of 5%, and an online advertising budget of 10% of gross sales, you would be spending 0.05% of ad dollars per visitor. Take that times your gross sales and you'll know how much you can spend to get a qualified visitor to your site. Summary Traffic pattern analysis is the key to online success. Without it, you are gambling. Keeping good records over time is key. If someone tells you how many hits they can deliver for your online venture via their snake-oil special offer, don't bother to listen. You're better off than they are, your visitors will be coming to your site and you don't have to cold call! Copyright 2006 by Footenote, Inc. Richard Foote is a web developer, long time computer guy, and maintainer of this site. |
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