Web Analytics Primer: Five Metrics Demystified

Let's face it: Web analytics is complex. But if you're new to site analysis, don't fret, you can still jump in, and following our action plan, gain valuable insight on your e-store that you can use to boost sales in time for the holiday rush.

We asked Avinash Kaushik, author of "Web Analytics: An Hour A Day" and the highly revered analytics blog, Occam's Razor to provide us with some tips for beginners. Kaushik, who also happens to be the Analytics Evangelist for Google, agrees that interpreting site data can be overwhelming, but said there are five simple things Web shop owners can do — without absolutely any knowledge of analytics — that will provide instant benefits. These include helping you prioritize your paid and organic search marketing efforts, improving design and marketing by seeing exactly how many clicks each link on your site gets, flagging in on choke points in your selling cycle and identifying problem product pages, among others.

"I think of these five steps as a sort of primer on analytics, and it can be done using any type of program," said Kaushik with a chuckle, "The goal is to make money, and if you spend 15 minutes on each one of these steps, you will see results. I like to quote Deng Xiaoping, 'To get rich is glorious.'

"First, we need to look at the basic numbers, what's coming in to the site, next you figure out where people are coming from, because as e-commerce vendors, acquisition is important, you want to know if you're getting the right kind of people to show up, and that's determined by where they come from. The third thing, and this is how you save money, is to find the gaping holes in your site in terms of how marketing and traffic is working, and the next two involve improving the site and then understanding your outcomes."

Before we begin, it's worth noting that Kaushik is agnostic in terms of what type of analytics program you use. "The three big search engines all offer world class analytics tools for free, people have a misconception that you have to spend a lot of money to get good data and that's not true," he said. "But if you want to buy one, say use Omniture, that's fine, too."

1. Get the Primitive Basics Out of the Way

The first step, is to look at your basic metrics, as Kaushik said, "to get a brief understanding of site consumption." He described the following metrics:

• Visits: represents the number of sessions on your Web site, the number of times someone interacted with your site.
• Bounce: is the number of those who left instantly.
• Page Views: the number is how many pages were requested in those visits and how many in each visit, Pages / Visit.
• Average Time on Site: how long did people stay on your site.
• Percent New Visits: shows how many sessions, interactions, were from people who visited your site for the first time.

What is It Telling You?
Looking at how long people spend on your site is important, Kaushik said, because, for instance, if a normal purchase process on your site takes about 10 minutes, from searching to looking at the item to adding to your cart to checkout, and most people are spending 30 seconds on your site, "then you can tell there's probably something wrong."

He also said the percent of new visitors is a key metric because if you want to grow your business, you need new pools of potential customers. "If you have 40 or 50 percent new visitors, that's healthy," he said, "if you have two percent, your business is in trouble."

Also, most Web sites will have two to three — five at most — pages per visit, so if you have more than that, you're doing well. But you don't want to stop here.

What to Do Next?
From here, you want to look at trends, how things are doing over time. "A quick hint, in Google Analytics it is very easy to click a button to show trends over time," said Kaushik," so if you're planning for Christmas, look at these numbers from February to November and for the past year or 14 months, to see any trends. It gives you a better perspective for planning purposes on what is selling, but we'll get much more into detail later."

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