Web Analytics Primer: Five Metrics Demystified By Michelle Megna
September 18, 2008
2. Understanding Traffic Sources
Next, you want to know who is coming from where. The metrics you will find under the general topic of Traffic Sources in analytics programs are as follows:
Direct Traffic: all those people showing up to your Web site by typing in the URL of your Web site or from a bookmark. Some people also call this "default traffic" or "ambient traffic."
Referring URLs: other Web sites sending traffic to you. These could be as a result of your banner ads or campaigns. These could be all those blogs or affiliates who link to you.
Search Engines: Google, Yahoo, MSN, Ask, others. This bucket will include both your organic as well as your paid (PPC/SEM) traffic, so be aware of that.
Other: These include campaigns you have run, e-mail, direct marketing, etc.
What is It Telling You? Kaushik said you need to look at the distribution of sources from which your site gets traffic, and much like an investment portfolio, it should be diversified and spread out. Looking at these metrics will help you decide where you should spend your marketing dollars in terms of acquiring traffic.
"I was looking at a Fortune 500 company the other day and it turns out its referring traffic is only three percent and 60 percent is from direct traffic. What this tells me is that the only way they're getting traffic is by spending money because no one is talking about them, linking or referring, so this means there are gaping holes in their SEO and something they should be addressing."
On the other hand, if 60 percent of your traffic is coming from search engines, you're doing well there, so you can focus more on other marketing efforts, say, blogging and affiliate linking. All analytics programs let you split the data to show how paid and organic search compare, and it's important to have a good balance.
What to Do Next? "The percent from search engines is very important, because if you're not showing up on search, you basically don't exist. If you're only getting 10 percent of traffic from search engines, then that means you are paying way more than you should to acquire visitors, and you can reassess what time and money you spend on paid versus organic search," said Kaushik.
Other insight can be gained by looking at the search traffic and the keywords to understand which engine is working for you and why.
He also recommends looking at referring URLS to identify sources that you don't know that are sending you traffic. "I might visit the referring pages and see why. For some solid ones I might want to establish a marketing relationship with them. I'll also look for traffic sources that should be sending me traffic and if they really are doing that. The referring URL world also shares a hint of customer intent, why might they be there. Small gold.
"This is a simple report, takes 10 minutes to look at, and is so important in terms of getting information you need to focus on the right direction for your business."
3. Fix Stuff/Save Money
We've been talking about how to spend time and money, now let's talk about how to save money by studying the bounce rate metric. "This is one of my favorites," said Kaushik. "Bounce rate tells you the customer came and puked, they left, you didn't get one click from them, so obviously we want to change this, get them to click, this is a very important metric."
He goes on to recommend that e-tailers first look at the top 10 to 20 landing pages, or top entry pages, of their sites and study the number who entered — and then bounced. Because visitors use sophisticated search to enter your site at any given product page, every page must essentially function as a homepage.
What is It Telling You? Pages with a high bounce rate are not delivering on the promise that is driving customers to your site. Kaushik said a seven to twelve bounce rate is great, but 30 to 70 percent is a call to action. If you fix these to deliver on the promise, you're not spending money, and you're increasing the likelihood that people will go deeper in your site and maybe buy something.
His second tip in regard to bounce involves keywords. You can find a report that shows bounce rates for the search keywords sending traffic to your site in all analytics programs. "Here you have intent because the customer is telling you why they might be coming, and keywords with high bounce rates are where you are not meeting that intent. He said it could be that you are ranked for the wrong keywords. It could be that the pages these potential customers are landing on don't have the right marketing message or product mix. "It's simple, fix the pages that are stinking," he said.
What to Do Next? No matter how little you know about analytics, you can use the Google Website Optimizer to do A/B or Multivariate tests. It take six minutes to set up a GWO A/B test, according to Kaushik, and the tool is free. Pick pages you want to fix, create a couple versions of the pages and put them into a test. You can improve the pages based on customer feedback.
Next, he said to look at landing pages of the top keywords (a one-click report in most Web analytics tools) and see how you can improve the copy, content, images and so on.
From there, he said to take time to segment the paid and organic traffic for all the search engines and stop spending money on the paid keywords that have high bounce rates, until you figure out why the bounce rate is so high (maybe you're using the wrong keywords, or maybe you are driving traffic to generic pages and need custom landing pages etc).
(Continue to Page 3 for Site Overlay and Reporting Details)
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