Introduction

Analytics on laptop

In the early days of the internet, website owners would mostly track (and brag about) the number of ‘hits’ their website received. They thought that hits from visitors directly translated into potential customers.

We now know this isn’t true.

If a person visits a website, yet all they do is bounce out again (they leave without visiting any page other than the page they landed on), the effort that went into getting that visitor to the site in the first place was wasted.

Web analytics track the activity of a website visitor, including the page they landed on, how they landed there, what they did when they landed, and whether it resulted in a sale.

Setting up Google Analytics

The most common analytics platform for websites is Google Analytics. To add this to your own website you need a Google account and either a little bit of technical expertise, or a friend or colleague who’s happy to help you out.

When you create your Google Analytics account, you’ll receive a Universal Analytics (UA) tracking ID which, along with a script provided by Google, will need to be placed in the <head> section of your website.

If you’re using a standard content management system (such as WordPress), or a cloud-based service (like Squarespace or Shopify), you’ll be able to find plenty of tutorials that walk you through the process.

Within hours of adding the tracking script you’ll be recording traffic in your Google Analytics account. With the information streaming through, you’ll be able to measure whether your other online marketing efforts are bearing fruit.

Once you have your analytics platform set up, it’s time to start using it to learn more about where your customers are coming from, what they’re paying attention to and how many of them are actually making a purchase.

Learning where your website traffic is coming from

Your website can attract visitors from many points of origin. Google defines how users arrived at your content as the 'medium'. It defines 'source' as the place users are before seeing your content, like a search engine or another website.

The most common mediums in Google Analytics are:

Organic

Organic traffic represents people who have found your website through a search engine query and have clicked a link in the search results. You can drill down further within Google Analytics to learn more about the search terms that people used to find your website in the first place.

Direct

Direct visitors are people who have come straight to your website without visiting another site or doing a Google search. This usually means that they have typed your URL directly into their web browser or have clicked on a link in their bookmarks. You can assume they already know about you, as an existing customer, as a recommendation from a friend, or from any other source of offline marketing such as a radio advertisement, pamphlet or business card.

Referrals

Referrals are visitors who have clicked on a link on another website and have arrived on your site as a result.  You can drill down further to see which websites these visitors have arrived from. Your referral statistics will help you to see how many visitors are arriving from paid directory sources such as the Yellow Pages. This is an excellent way to check the return on investment for your advertising on third party websites.

Social

Social hits refer to visits from social media sites, including Facebook, Twitter, LinkedIn and most of the other commonly used social media platforms. Keeping an eye on your social hits can give you a sense of whether your social media efforts are leading to visits to your website. You can also check which of the platforms you’re active on is leading to the greatest number of visits or the highest conversion rate.

Email

Email hits equate to visits to your website from links within emails. If you’re doing email campaigns, this is where you can see if your email is achieving the desired results.

Paid Search

If you’re using Google AdWords, hits from your paid ads will be counted separately to make it easier to determine whether your paid advertising is achieving the desired return on investment. By combining Google AdWords and Google Analytics you can easily track how much of your paid advertising is converting into sales. You can also configure Google Analytics to recognise paid clicks from other advertising platforms, if you have other online advertising campaigns on the go.

Understanding common analytics jargon

Google Analytics on iPad

In addition to the terms that are used to describe where visitors come from, Google Analytics also has a number of other commonly used terms that describe how visitors behave on your website. Until you have a good understanding of how these technical terms are used, it will be hard to get any real actionable information out of your analytics.

Here are some of the most commonly used bits of jargon:

Sessions

A session measures an individual visit to your website, regardless of how many times they revisit within a predetermined period of time. For example, a visitor who returns three times to the same page during the same five-minute block of time is counted as a single session, not three sessions.

New Users

A new user is a visitor who has never been tracked on your website before. Generally, visitors that arrive as a result of an organic search will be counted as new users. Google isn’t able to determine new users with 100% accuracy, but the error rate is fairly consistent, so you can still use the new user metric to get a sense of how many of the visitors to your website are likely to be people who haven’t engaged with your business much before.

Pageviews

Pageviews refer to the number of times that visitors have viewed individual pages on your website. Each time a visitor navigates to a new page on your website, it adds a new pageview to the tally. In this way, one visitor might be responsible for a large number of individual pageviews during a single session.

Bounce Rate

A visitor generates a bounce when they arrive on one page in your website, then leave the site without visiting any other pages. Bounces are generally expressed as a percentage, or bounce rate, which shows the percentage of visitors who only viewed a single page before disappearing. A high bounce rate can mean that your visitors aren’t finding what they’re looking for when they get to your website. However, average bounce rates vary from industry to industry and rates of 30–50% are relatively common.

Tracking user flow on your website

In addition to tracking individual visitors and visitor demographics over time, you can use your analytics platform to figure out how visitors move through your website and what content they spend their time looking at. By visiting the behaviour tab in Google Analytics you can find detailed information about which pages on your website are most popular, how many people are visiting each page and how long your visitors are spending on each page.

In fact, many visitors to your website are going to arrive on a page other than the home page as their first port of call. This happens because search engines will often find pages that are deeper in the website and return them as results for searches that relate to the content on that particular page. While the home page is often the most commonly visited page on a given website, it can be informative to look at what other pages are receiving a higher than average number of hits.

Because many of your visitors will first arrive on a page other than the home page, you should make sure that it’s easy to get from every single page on your website to important pages like the home page, contact page and online store.

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Using a goal-driven approach

Setting up an analytics platform and getting to grips with the basics is only part of the puzzle. Unless you’re using your analytics to test your assumptions and measure your progress towards tangible business goals, then the best analytics platform in the world is just an abstract mess of numbers and statistics.

Rather than just passively watching your analytics, you should try to use your analytics platform to measure the outcomes of specific actions you have taken, as part of your marketing strategy. If you try out some Facebook advertising, you can use your analytics to measure how many people are arriving on your website from Facebook, and of those, how many visit your store page and purchase a product.

By setting goals for yourself, your analytics toolkit will become an active part of your business strategy. If you’re aiming to increase the number of visitors to your website, track the analytics over time, but actively make changes to your marketing strategy to see how it impacts your numbers. Once you have been running analytics for a number of months, or a number of years, you’ll have a good sense of what your baseline statistics look like, which will better enable you to gauge the effectiveness of your digital strategy over time.

Adding values to goals

While this is a good general principle to follow, Google Analytics also provides a mechanism for assigning a dollar value to various actions that visitors to your website take, which can help you to make your goals more tangible and easier to track. For example, if 10% of the customers who visit your store page buy something and the average total purchase is $50, then you might choose to assign a value of $5 to each visitor to the store page. Then, as the number of people visiting your store page fluctuates, you can quickly get a rough guide as to how much revenue is likely to be generated as a result of that activity.

Adding values to goals can be particularly useful if you’re experimenting with online advertising. For example, if you know that every visitor to your store page is generally worth around 30 cents, you might be willing to pay up to 30 cents per click on a pay per click advertising platform. If you then found that visitors from your ad were buying products at a lower rate than your previous average, you can reduce what you’re willing to pay for advertising accordingly. In this way you can use your analytics to tune your advertising spend and ensure that your advertising is achieving a positive return on investment.

How to measure your conversion rate

The number of conversions is measured as a percentage of visitors who also fit another measurement criterion; for example, “the percentage of new visitors who completed a booking”, “the percentage of visitors who made an online purchase”, or “the percentage of visitors who requested a quote using the contact form”.

Different businesses should focus on different conversion rates. For some businesses, a conversion equates directly to an online sale and for others it will be taking an intermediate step, such as requesting a quote or call back. It’s up to you to decide which conversions you want to watch out for and to set Google Analytics up to report on those conversions for you. The best conversions to track are those that you have some capacity to influence and which translate most easily into revenue for your business. If you can’t realistically influence the number of conversions through advertising or promotion, and if you can’t easily estimate what each conversion is worth financially, then it’s going to be difficult to use that data to motivate decision-making within your business.