How do you measure the success of your company's website? Receiving reports on how many users clicked on the site is a fairly basic way. If the site is set up for ecommerce, the number of sales generated through the site is the simplest, most obvious measurement. Calculating how many visits were successfully converted into sales takes a bit of math but is achievable.

But determining such potentially critical data as where your website's page viewers are from, how much time they spend on a particular page, even from what other Internet domain they entered your site, is more complicated. Enter the booming business of web analytics, which collects, measures, analyzes and reports on such information as a way of understanding and optimizing web pages.

The leader in such on-site web analytics - not surprisingly - is Internet search company Google, which formally introduced Google Analytics (GA) in 2005. According to web technology analysis firm W3Techs, of the various traffic analysis tools used by the top one million websites, 86.7 percent of those websites employ GA, as of January 4, 2010 (W3Techs updates its survey daily). GA's percentage of the web analytics market handily dwarfs that of its closest competitor, StatCounter, at 5.3 percent.

GA can track website visitors from all online sources, including search engines, display advertising, pay-per-click firms (in which advertisers pay their host site only when their ad is clicked), email marketing, and links within PDF documents. When integrated with Google AdWords - a pay-per-click venture that also offers site-targeted advertising for both text and banner ads, and the primary source of Google's reported total advertising revenues of $21 billion in 2008 - GA users can review online campaigns by tracking landing page quality and conversions. "Conversions" can be defined as sales, lead generations, specific page views, or downloads of a particular file. Thus, companies can quickly and efficiently determine which ads are performing best and adjust their marketing activities accordingly.

In addition, GA can be used to determine poorly performing pages on a particular site, measured by tracking where visitors originated (from a search engine, a competitor's site, etc.), how long they stayed on each page, and their geographical location. The tool also offers more advanced features, including the ability to group visitors into segments based on geography, past shopping activity, and so on.

How It Works

The gathering of such data is made possible by the Google Analytics Tracking Code (GATC) that is added onto every page of a given website. The GATC collects private visitor data and sends it to Google's data processors, which usually results in a report within four hours. The GATC also sets "cookies" (a small piece of text stored on a user's computer by a web browser; typically these include such information as user preferences and shopping cart contents) on each visitor's computer. This information, in turn, is used to store anonymous information such as whether the visitor is new or returning to the site, how long the current visit lasts, and from what online destination he came.

Companies can therefore maintain a relatively accurate view of such trends as whether their site's traffic is growing, shrinking, or stagnating (by comparing unique visitors per period with a previous period, and looking at whether views are affected by particular promotions or advertising campaigns); how useful visitors find the site (by looking at average page views and average time spent per page, and determining possible reasons for significant fluctuations from one time period to the next); and where visitors - both new and returning - are geographically located (resulting in possible modifying of jargon to attract visitors in given areas, or types of campaigns to increase new and/or returning visitors).

In terms of content, companies can look at what their most frequently visited pages are and decide if they correspond with the company's expectations. This can lead to redesigning pages, tweaking offers, or completely rethinking a page's content if company expectations or goals are not being met. Making pages more interesting or useful to users, as well as making them more easily accessible by those users, is a key consideration.

In addition, tracking where visitors first land on a company's site can be valuable. Not all visitors will automatically land on a company's homepage, especially if they've searched for a specific product via a search engine. Once combined with tracking visitors' click paths from the home page (where most visitors go once they're on your site), a company may ultimately want to re-think its homepage strategy and content.

Just as important is tracking from where visitors exit a company's site. If there is a substantial number of departures from anything other than the "Thank You" page, companies may want to reconsider everything from design to pricing.

Also possible is tracking what sources-direct typing of the website's URL, search engine, paid ad, referral, etc.-are driving visits to the company's site, and how those segments may be changing in relation to each other. The company can then use this information to determine the success or failure of new ad campaigns, page redesigns, pricing changes, and so on.

When it comes to referring sites, a company may want to determine which referrers tend to bring visitors who stay the longest, view the most pages, and, of course, result in the most business. If certain referrers seem to be underperforming, a company may want to suggest to the referrer different messages in their links to improve clicks; similarly, if desirable referrers are not referring to your site, the company can look into why not.

Keywords and phrases used by visitors to find your products or services can likewise be examined; if certain keywords implemented by the company are failing to deliver traffic, extensive copy or design changes may be in order, as well as alterations in the company's paid search ads.

As with any online technology, Google Analytics is in a state of constant evolution. One common complaint about GA is that its cookies-based approach for GATC results in sharp declines of utility when trying to track websites browsed from mobile phones, as only the latest versions of those and other PDA devices are able to set cookies.

However, with the increasing trend towards smartphones like Apple's iPhone and the BlackBerry (and, not to be ignored in this category, Google itself, which is testing its own mobile smartphone, the Nexus One, for possible release this year) that can set cookies, and GA's own updates/upgrades, that concern has been mostly addressed. In October 2009, GA announced a number of improvements, including:

Expanded Mobile Reporting: GA now tracks mobile websites and mobile applications, to allow companies to better measure their mobile marketing efforts. GA can track traffic to a mobile website from all web-enabled devices. iPhone and Android mobile application developers can now also track how users engage with apps, just as with tracking engagement on a website. For apps on Android devices, usage can be tied back to ad campaigns: from ad to marketplace to download to engagement.

Multiple Custom Variables: This feature allows the GA user to customize Google Analytics and collect the unique site usage data most important to their business. The upgrade allows easier classification of, according to Dai Pham of the Google Analytics Team, "any number of interactions and behaviors on your site."

Analytics Intelligence: Designed to provide automatic alerts of significant changes in the data patterns of a site's metrics and dimensions over daily, weekly and monthly periods, eliminating the need for companies to do the monitoring themselves. "Now you can spend your time actually taking action, instead of trying to figure out what needs to be done," per Pham.

Custom Alerts: Similarly, this allows the GA user to customize daily, weekly and monthly triggers on different visitor data parameters and be notified by email or right in the user interface when the changes actually occur.

Additional Considerations

Google's ongoing quest for world domination isn't quite complete yet, however. Several ad filtering programs and extensions, including Adblock and NoScript, can block the GATC, allowing some users to go untracked and, thus, not being contained within the GA reports. In addition, computer-savvy individuals can block or delete cookies from their systems, again with the result of being untracked.

Though the numbers of individuals going untracked due to the above are believed to be statistically small, such data is by its very nature difficult to accurately capture.

Another issue is the always-present-on-the-web concerns about security and privacy. Through its use of cookies and other data collection devices, Google itself has regularly come under fire for storing (and the potential misuse of) millions of pieces of data related to individuals. And with that 85-plus percentage of the web analytics market, GA is responsible for a significant amount of that data collection.

Even if individual users do not employ Google as their search engine, chances are high that many of the sites they visit are Google-enabled in one form or another (including GA). For its part, Google maintains that it stores personal information for 18 months, after which it is removed.

Most observers recommend that companies using GA maintain transparency with their visitors about what visitor data is being collected and how it is used; such information is usually placed on a "Privacy Policy" page. (For a particularly detailed-and potentially alarming-example, see Google's own Privacy Policy at http://www.google.com/intl/en/privacypolicy.html.

The Bottom Line

If one can overcome such concerns, the potential benefits of using GA are plentiful. One of its main attractions is its cost: free. The current version, along with an installation guide, can be found at http://www.google.com/support/analytics/bin/answer.py?hl=en&answer=66983. While Google itself maintains that correctly installing and using GA is simple, there are a number of third-party agencies doing an apparently brisk business in helping business owners learn the ins and outs of the tool.