The importance of understanding analytics BEFORE making any changes to your business based on the data you see there can not be overstated. Online businesses could seriously damage their sales and wrongly assume they were down due to the economy if they don’t realize Web Analytics data is NOT black and white. What it APPEARS to show and what is REALLY true are rarely the same.
Mike Tekula touched on this yesterday in his post SEO & Analytics: Four Useful Ways to Assess Your Organic Traffic:
We often have a pretty simple and straightforward way of looking at a given metric. Example: “a high bounce rate is bad.” But a single metric by itself rarely tell us everything we need to know (see #1 above). A higher bounce rate can actually reflect a positive change.
If your aim is to bring in users who are more likely to be engaged by your content, then an increasing bounce rate combined with an increasing number of pages viewed per visit may be positive. The traffic source (read: keyword) users arrive through plays an important role here.
We MUST stop viewing any metric as “good” or “bad” because in almost every case “it depends”. If traffic goes up – but it all immediately bounces because it comes from a source too general and the visitors simply aren’t interested in your site, more traffic can be bad.
Even more dangerous is making assumptions about the true sources of your conversions. Most Web Analytics programs including Google Analytics attribute sales to the LAST CLICK. Even if you already knew that do you know what it means when applied to actions you may take based on analytics data? Here are some examples:
You never see any sales generated by your most general keywords. ASSUMPTION: They don’t generate sales so they aren’t important or you want to eliminate ppc spending on them. This action could seriously impact your sales because:
- Conversions generated by returning buyers may be attributed to Direct if they type in your Web site URL
- The buyer may have FOUND YOU using the general keyword, found what they wanted, and then returned to your site by searching on a specific keyword phrase. Without the original general keyword they may never have found you but the specific search phrase will be credited with the sale!
- Buyers searching on one PC and then buying using a different PC will not be tracked to the original visit
- Buyers may leave to read reviews or check price comparison sites before buying. If you have links from those other sites the sale will be attributed to them instead of the original visit.
Hopefully you’re still with me. (If this isn’t clear do please comment below and ask any questions you may have.) If that isn’t confusing enough, there are real life examples that explain why some merchants believe their affiliate commissions are too high because affiliate statistics don’t match Google Analytics.
When you start driving traffic from Social Networking sites you may see greatly increased traffic, much higher bounce rates, and a decline in overall conversion rates. One way to determine whether a particular metric is a “good” or “bad” indicator is to segment the traffic (i.e., look at traffic from different sources separately). All traffic does not convert equally so you want to look at conversion rates for each source.
Even then there is a serious problem with making decisions based on last click only analytics data. There is really no way to know what is driving your sales unless you track every click – and that is something that most commonly used analytics programs including Google Analytics – simply do not do.
The real solution is to find a way to track every click. In the meantime be VERY CAUTIOUS about making ANY change – whether that is to your advertising, affiliate programs, shipping costs, traffic generation methods, or anything else!
You should record every change you make in a simple change management plan. This can be a spreadsheet, a notebook or any other method of recording data. Write down the day you make each change and specifically what you changed. Whenever possible only change ONE THING at a time.
One other point: changes you make today do not immediately affect your sales. There is a residual effect due to return visitors. Do NOT make the mistake of assuming that if you stop advertising today and sales are fine tomorrow that you made a good decision. Your marketing efforts from last week will still be bringing in sales.
The residual time is generally 10-14 days for low to medium cost products and services. Even if what you sell is VERY inexpensive and you would think most buyers would make immediate decisions there is STILL a delay of 10-14 days before changes you make today start generating sales and a similar time before what you do today stops generating sales.
Products and services that are more expensive and require complex decisions or configuring will have a longer residual time. When you start making changes if at all possible wait until this residual time has passed and you can evaluate the true effects of your last change before you make another.
Applying Web Analytics is a complex skill. Don’t expect to be an expert immediately; it take time to increase what you know. If you haven’t already signed up we recommend the free ten part Mastering Web Analytics ecourse. If you’re new to analytics start there. If you already have some experience you may find the resources below useful.
Questions and comments are ALWAYS encouraged. We want to hear from YOU!
WEB ANALYTICS EXPERTS on TWITTER:
- KISSmetrics – KISSmetrics Blog – Follow KISSmetrics at Twitter
- Author of Mastering Google Analytics – Follow ValueGuardian at Twitter
- Web Analytics Demystified Blog – Follow Eric T. Peterson at Twitter
- Occam’s Razor by Avinash Kaushik – Follow Avinash Kaushik at Twitter (Occam’s Razor is probably the best known of all Analytics blogs. Not easily understood by beginners; best for more advanced users or very serious students.)
- FutureNow Blog – Follow The Grok at Twitter – Advanced marketing and analytics blog.
- Web Analytics World – Follow WAWorld at Twitter
- WebTrends Blog – Follow WebTrends CEO Alex Yoder at Twitter (WebTrends is a major analytics program more suitable for large to Fortune 500 businesses.)
- Ben Gaines, blog author at Omniture – Follow OmnitureCare at Twitter (Omniture is the other major analytics program used primarily by very large to Fortune 500 businesses.)
See also a Twitter Channel for Web Analytics Professionals
UPCOMING WEB ANALYTICS EVENTS:
- SearchFest 2009 Site Analytics Session with Eric C. Peterson
WEB ANALYTICS BLOGS:
The following list starts with those who write for the general public and gets progressively more challenging to understand. The first three are the easiest to follow. Those at the end are more relevant for very large companies (Fortune 500 and major corporations). The comments below may save you some unnecessary clicks.
- KISSmetrics Blog – suitable for those new to analytics
- ROI Revolution – from basics to advanced
- Web Analytics Demystified – basics to advanced concepts – probably understandable for most
- Occam’s Razor by Avinash Kaushik – Very advanced – not suitable for beginners
- Read the latest posts from other best Web Analytics blogs at AllTop
WEB ANALYTICS ARTICLES:
- REVIEW: Free Mastering Google Analytics ecourse (highly recommended)
- DoshDosh: How to Analyze and Improve Your Bounce Rate
- FutureNow: What Your Bounce Rate is Trying to Tell You
- SEO and Analytics: Four Useful Ways to Access Your Organic Traffic
- Start Using Google Analytics with their Getting Started Guide
- Don’t Get Stuck: 5 Ways to Simplify Analytics and Avoid Analysis Paralysis (from KISSmetrics – suitable for all expertise levels)
- Recession Busting Analytics (Occam’s Razor blog – better for advanced users)
- The 8 Most Important Conversion Metrics You Should Be Tracking – Excellent basic information
- 50 Resources for Getting the Most out of Google Analytics
Gail Gardner
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I think that this is were a lot of people get confused. it’s not all about traffic and it’s not all about conversions. You have to have the a constant flow of both in order for you site to be successful. One won’t work without the other.
analytic’s can help you level out the two.
Analytics can be helpful, but not blindly trusted.
And yes, traffic isnt always good. It might now always turn into sales. And the, bandwidth is expensive.
Nice post
These are good tips to know and understand before we make any changes to our business. We should not rely on Google Analytics right away. We still need sometime to analyze before we make or do some changes in it. Thanks again. This is great!
Anne would love you to read ..Custom Simpson Wood Doors
“When you start driving traffic from Social Networking sites you may see greatly increased traffic, much higher bounce rates, and a decline in overall conversion rates.”
You are right, traffic from social networking sites is of very less value, most of the times its the bots that visit. You will see hardly any conversions with that sort of traffic.
“What it APPEARS to show and what is REALLY true are rarely the same” is not the case with analytic because there are many manipulation done in the analytic.Cheers
Resources like the one you mentioned here will be very useful to me! I will post a link to this page on my blog. I am sure my visitors will find that very useful.
great post full of meaningful information.i came to know certain things.thanks.
Your post has certainly made me think that I should not rely solely on Google Analytics. Many people are right, Google Analytics is a very attractive tool as it is free and gives you quite a bit of info. However I have started to doubt Google statistics recently. Thank you for all the links. I have now subscribed to Mastering Web Analytics e-course and have five blog posts to read on the subject. Thank again.
I have seen some evidence (just some) that suggests bounce rate is even becoming a factor for SEO. Like all things with SEO, it’s not categorical. In other words, a high BR does not leads to low rankings by itself and vice versa. Other factors are involved.
Bounce may be a factor, but it is unlikely that it is a major factor for SEO becasue many sites, such as advertising portal such as the classified sections of newspapers naturally have high bounce rates. It is not an indication that the user did not find the content they were looking for. It actually could be an indication of the exact opposite, and the user clicked further, but the link was simple to another site (advertisers site).
Hello again. I left both comments because they were different. I agree that Google Analytics (GA) is not accurate and what concerns me is that you can not trust them. Right now we are buying some highly targeted exact match long tail keywords on AdWords and driving them to our NoBogies site.
GA is not showing those clicks as paid traffic. Maybe they’re in organic traffic; maybe they’re not. You do have to wonder how Google Analytics can manage to misreport clicks from Google AdWords.
I do a lot of posts about building links. I wonder how many appreciate that now we can get our own incoming links from dofollow blogs. That is much easier and faster than the way we originally did it.
I wish more bloggers would take the time to share quality links in their posts and write about the writers from whom they learn the most. Don’t those people deserve an incoming link from us? I believe they do.
Thanks for the tip about statcounter and getclicky. I could really use something to track immediate trends so one that has graphs and live stats would be what I’m seeking.
.-= Internet Strategist @GrowMap´s last blog ..How to Add Your Free Business Listing to infoUSA =-.
Social networking can really drive up the bounce rate. I seem to think that link building is still the way to go. Even that can increase bounce rate but at least the position is a little more permanent. I want to point out GetClicky as a neat way to watch analytics.
Hi Whitey,
Sometimes Akismet grabs comments so if yours don’t appear right away I will rescue and post them. The main point of this post is that you can’t just look at one metric and make changes based on it because there are many variables involved.
As you note, social networking clicks are going to bounce at a much greater rate; however since they’re free and some of them will become leads/subscribers/customers we don’t want to eliminate them. Thanks for the tip about GetClicky. I’ll check it out.
.-= Internet Strategist @GrowMap´s last blog ..DMOZ Now Largely a Waste of Time =-.
Hello Chicago Pay Per Click. Glad to have you here. I totally agree that many conversions actually generated by ppc ads do not get credited to that source.
They can not only increase organic clicks as in your example, but also:
1) Direct clicks (because the person who clicked on your ad returns by typing in the URL)
2) Searches for the specific item and licks on another ppc ad (thereby overwriting the original cookie so THAT ppc keyword phrase gets credit for the conversion).
3) Searches for the specific item and clicks on an organic listing (so the organic click gets credit for the conversion).
4) Goes to a shopping comparison site to check prices or read reviews. If the store also advertises there the shopping site will get credit for the conversion.
Every time I hear a consultant bragging about saving their client’s money by eliminating spending on “non-converting” general keywords I cringe. They are also eliminating all those subsequent sales.
Since there is always a latency between the change and the result neither that consultant nor their client is likely to realize that cuts made 7-10 days ago or longer are responsible for declines in sales weeks later (or longer if what is sold is complex or high dollar).
While many are “certified” AdWords specialists or providing analytics consulting most do not truly understand the cause and effects involved. They may do their best; however, their advice may be seriously detrimental to their clients.
Internet Strategist’s last blog post..What IS a Social Media Expert?
WEB ANALYTICS are measure in which various statically methods are used.I think google analytics are not giving best result as expected ?
chintan’s last blog post..Confidence
Although Google Analytics was originally an independent company that sold very expensive analytics (Urchin) they may now be more important to enhancing Google’s bottom line than the users’.
When a company’s priority is profitability, their methods can be detrimental to their users. Those with viable businesses would do well to consider using an INDEPENDENT source of analytics and to minimize the amount of information shared with those in a position to increase their cost of sales.
Internet Strategist’s last blog post..Promote Your Business Without Cash
Great post, I’ve been doing a bit of research on this lately and I’m glad I found it. We’ve had a significant bounce rate, and have changed quite a few things around. Now, we’re having serious traffic issues. I’ll keep this in mind.
@car jacks Thank you. That is our goal: sharing proven strategies for growing small businesses and blogs. This template was one that Search Friendly Web Design was playing with when they installed WordPress for us. They do custom Web Design work and are very busy because Sammy Russo is very intelligent.
We’re planning to update to the Thesis Theme when our other technical advisor can make the time to install it. They’re both always in great demand.
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@Brian I assure you that I am very serious and there is plenty of proof. Matt Cutts even admitted that Google is intentionally setting bottom bids for keywords. I looked diligently but was unable to find the link to that post. Perhaps someone else saved it and will share it assuming it is still online.
I am certainly not the only person experienced in using ppc advertising who has seen proof that Google increases their income at advertiser expense.
I once gave them the benefit of the doubt and thought they might not realize how their changes were affecting their advertisers.
Eventually even I had to admit that there was no way they could NOT know and indeed be intentionally taking money in ways that are unethical – at least to me. I do admit that my ethical standards are much higher than those of many in the business world.
Here is a sampling of the many posts about Google deliberately taking action to charge advertisers for traffic that does not convert and intentionally raising bid prices based not on any real need but only because they can:
Distribution Fraud: http://www.apogee-web-consulting.com/blogger/2007/01/distribution-fraud-is-real-click-fraud.html
Profits Down Severely – see graphs at http://www.wolf-howl.com/sem/murder-by-google-adwords/
Artificial Bids: http://www.searchenginejournal.com/google-adwords-testing-bid-price-structure-changes/2074/
$10 minimums: http://www.webmasterworld.com/google_adwords/3609903.htm
Any of these searches will turn up far more information:
“distribution fraud”
“quality score” (which is really NOT a quality score)
“minimum bids”
Google CEO Eric Schmidt was just interviewed and said “it was hard to imagine why you would see a decline” [in Google’s revenue]. Check that post out and some comments on it at FriendFeed at http://tinyurl.com/arolam
growmap’s last blog post..Don’t Make ANY Changes Based on Web Analytics Until You READ THIS FIRST
Are you really stating that Google is deliberately defrauding its customers, or turning a blind eye to it?
My mistake, I thought this was a serious discussion – I’m outta here.
Brian Clifton’s last blog post..Creating the prefect (trackable) blog article
@Brian They aren’t assumptions. I made a very good income managing ppc accounts for online stores and what they were doing was quite obvious – and this is key – in the analytics accounts of very small businesses.
Anyone checking analytics accounts would easily overlook random bumps in spending on particular keywords because the volume of clicks, money and conversions would conceal what is happening.
When you’re managing very small spends they are extremely obvious – and so are the causes. When spending on one keyword phrase jumps from under $15 a month on one very targeted exact match phrase that generates at least two sales a month to over $350 in ten days and generates NO SALES there is only ONE explanation: distribution fraud.
When advertisers start pausing ads to stem the red ink and a system shows unrelated ads in the place of the paused ads what would you call that?
Have you read Bob Cringely’s post at PBS called The Next Microsoft: Google is Learning Too Well From the Master? I encourage anyone buying ppc ads to do so.
What an apt analogy – I don’t trust bankers either – for good reason. They COULD both make excellent incomes by providing exceptional service; however, they both take the path of overt greed instead.
Internet Strategist’s last blog post..Making Money with Your Blog – Part 2 – Evaluating Affiliate Programs
hmmm… I seriously disagree with your assumptions on Google. I started life as an SEO’er before joining them, so I have seen both sides of the fence. Have a read of the following article:
http://www.advanced-web-metrics.com/blog/2008/03/17/google-is-like-a-bank/
Just my 2 cents worth…
Brian Clifton’s last blog post..Creating the prefect (trackable) blog article
@Brian Actually that wasn’t a typo as much as a memory glitch. I forgot that Urchin was so expensive back when. That is why my clients were primarily using IndexTools!
There would be great interest in a post comparing StatCounter with Google Analytics. Any chance you might write about that? I’d be glad to share your post here and across Social Networking sites.
Where one person sees value another sees red flags. I have one serious issue with Google: I don’t trust them because I know what they do to their users and I’ve seen them intentionally hide traffic sources in Google Analytics.
Now that Yahoo has acquired IndexTools I only hope that Microsoft doesn’t acquire ClickTracks. It is what serious ecommerce stores probably should be using because they’re (hopefully) impartial.
Using the analytics provided by the company selling you something is a serious conflict of interest and very risky because it is far too tempting – especially in economically challenging times – for them to play with the numbers to encourage specific actions.
Internet Strategist’s last blog post..REVIEW: Mastering Google Analytics – Comments and Contents of a FREE eCourse
@Growmap: just a small typo, Urchin on-emand was a $500/month service with a typical large scale implementation of the order of $1000/month.
You can’t compare StatCounter with Google Analytics – a year or so yes, but not any more (think: motion charts, custom reporting, advanced segments, dimensions, data export options, Adwords integration, Adsesnse integration, API to name a few). That said StatCounter is still pretty good!
However the real value Google brings to the table is not so much features (somebody somewhere always has another feature that is bigger and brighter), but the potential integration with all those other Google products – think YouTube, Feedburner, Google Trends, bid management, Google Earth, Enterprise server, gmail, cal, Google docs…
Brian Clifton’s last blog post..Creating the prefect (trackable) blog article
hey growmap,
Wow. This is a very well written post. I’ll have to admit that I haven’t signed up for google analytics yet (paranoia I suppose) but I think I should. You raise excellent point in that is matters how you interpret the numbers! ~ steve, the trade show guru
PS. this post reminds me of the saying, “There are three kinds of liars; liars, damn liars and statisticians.”
Steve’s last blog post..Green Trade Show Displays
@Salwa No matter how long you use any analytics program you’ll keep discovering new data and new ways to apply the patterns you dig out. They also continually add new features.
I encourage everyone to go ahead and get the ecourse as it is high level, very simple, and easy to understand. It takes very little time to read the ten emails and you’ll have a much clearer big picture view when you’re done.
@Brian Thank you. Your comment has me remembering a great post Avinash did years ago on why most businesses would be better off switching to free analytics and using the money they saved to pay an analytics analyst who could provide specific actions to take. What a great suggestion that was.
@Martin So we’re all fortunate if we’re not driving a porsche. 🙂
I once worked with someone who had a bright red classic Porsche 912 with a sun roof and $2000 Blaupunkt stereo. I asked him why he did a particular thing before he went out driving and he said he didn’t have to drive as fast to scare himself.
I wrote this post for all the people who are bound to think that what they see in analytics means what they THINK it means and not what it REALLY means! I hope to reach as many as I can BEFORE the economy prompts them to take actions that hurt their business.
@Steve The only reason Google Analytics is so widely used is because Google took a program that once cost $50+ a month and made it “free”. I would love to see everyone use anything else, but since so many use it my posts include it.
Personally I have more trust in ClickTracks and Dennis Edell and other bloggers have mentioned StatCounter. Dennis specifically indicated that he could find everything in StatCounter that others use to try to convince him to switch to Google Analytics.
It will be time consuming but worthwhile to research all the alternatives – especially those for bloggers – and post about them. I’ll add that to my ever growing list.
Statistics CAN be used to argue any point simply by manipulating the time period and what you choose to compare. THAT is why they are so dangerous – especially before you get a clear idea how variable the “results” can be even from the same data! User beware!
InternetStrategist’s last blog post..Why Affiliate Site Sales Do NOT Match Google Analytics Conversions
That’s a great post growmap
Education is the biggest challenge in the web analytics industry. With the free tools proliferating web measurement (particularly Google Analytics), there is a real need for people to understand what they are looking at and not make snap decisions because the graph is going up and to the right.
That was a major part of my thinking when I wrote my book. Of course it is GA specific but the approach and methodology are tool agnostic (as much as I could…)
Regards, Brian
Brian Clifton’s last blog post..Creating the prefect (trackable) blog article
Thanks for the link to Mastering Web Analytics ecourse. I have been using Google Analytics for sometime now but I still don’t concider my self to be an expert just yet so your link might come in handy.
Salwa’s last blog post..How to Avoid Blog Burn Out
Like with everything in life the actual result depends on all other factors not only the one statistic. It’s like when you can go 150 mph in your car. It’s great in some old piece of garbage but if you drive porche the result is less than impressive.
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