Once your site has been promoted with the right mix of advertising, PR, and search engine marketing, you'll want to measure performance to see how your marketing ROI stacks up. Marketers are looking for better returns from their marketing campaigns.
A good way to measure returns is to examine the data in your Web logs, analyzing your traffic for clues to user behavior. By analyzing behavioral data, you can fine-tune your site to serve customers better and improve your own profitability.

It's important to know where your visitors go and to notice what they like or don't like. Traffic analysis can yield information that improves marketing efficiency in two important areas:

Making site changes to improve your conversion ratio, and

Improving your marketing campaigns to achieve better ROI.
Analyze This

The beauty of online marketing is that your Web site gathers behavioral data from all visitors. You can find all the information you need for optimal marketing strategies in your Web logs.

The best marketing campaigns are those designed to be measured, analyzed, and continuously improved. The problem is that most laypeople don't know what to analyze or what actions to take as data is recorded. It's not always easy to know what to measure and why.

Traffic Analysis Data

Web logs provide user activity information on your Web site traffic. Analyzing your Web logs will familiarize you with the way visitors navigate your site. You can collect baseline information that tells you:

Total Page Views

Daily Unique Visitors

Hourly Unique Visitors

Total Visits

First Time Visitors

Repeat Visitors

Daily Returning Visitors
Then you can look at averages such as:

Average Page Views per Visitor

Average Visits per Visitor

Average Visit Length

Average Page Views per Hour of this Day

Average Unique Visitors per Hour of This Day

Average Visits per Hour of This Day
E-commerce sites will find these statistics of value:

Total Revenue

Total Orders

Total Unique Buyers

Most Active and Least Active Time Period

Shopping Cart Abandonment Rate

First Time Visitor Conversions

Repeat Visitor Conversions

Buyer to Browser Ratio

All this raw data resides in your Web logs, but it's hard to organize without traffic analysis tools. WebTrends by netiQ is a popular analytical tool, and the information above was excerpted from its Executives "Top 10" Tables. Additional traffic analysis tools can be found on download.com, including some low-end tools like HitBox, LiveStats, Urchin. Many high-end tools with advanced functionality are available as well.

Site Changes to Improve Conversions

What can you measure to identify the site changes that will improve your conversion ratio? This depends on the nature of your site, whether it's an e-commerce site selling products and services, a media publishing content site, or purely an informational site. Each site will have specific goals. The best way to determine how well your site attracts and retains visitors to meet these goals is to identify all possible reasons why a user would visit your Web site, such as:

Gather in-depth information on products/services

Look for email or phone contacts to ask questions about products/services

Purchase products/services

Compare pricing of products/services

Check status of pending order for products/services

Get more information or tips on using purchased products

Look for customer service assistance

Report a malfunction of online forms or shopping cart

Register for newsletters, product updates, marketing brochures, white papers, etc.

Research next-generation products

Join an online community

Read news headlines, industry news, business articles, etc.

Research information on accessories for purchased products/services

Check out new product offerings

Troubleshoot problems related to purchased products/service
Once you identify the reasons why users visit your site, you can assign desired actions to visitor clusters and follow their movements within your site to determine how successful you are in meeting your goals.

If you lead them to subscribe to a free newsletter and they fail to register, you need to find out why. You might be asking for too much information. The form might not be user-friendly or functional. Maybe your description wasn't compelling enough. Identify the roadblocks and take whatever action is necessary to improve your conversion rate.

Path navigation analysis can give you the information you need to make navigation easier and to adjust or eliminate content to meet your customers' needs. These changes can increase conversions and customer satisfaction.

Evaluating Campaign Performance

There are several measures you can use to analyze the effectiveness of your marketing campaigns. Each company will have different objectives; therefore, the key performance measures will vary. Below are six basic measures you can use for evaluating the performance of any marketing campaign.

Total Unique Visitors - This is the number of visitors who responded to your campaign by coming to your Web site.

Total Desired Actions - This is the number of visitors who responded to your call-to-action. The call-to-action depends on your objectives. It might be registering for a newsletter or trial, purchasing a product or service, registering for a seminar, or subscribing to paid services, etc.

Cost Per Desired Action - This is the cost of generating each desired action. It is measured by dividing total campaign expense by the number of desired actions generated.

Conversion Rate - This is the percentage of unique visitors completing your desired action. It is measured by dividing total desired actions by the total unique visitors.

Total Revenue - This is your total revenue generated by a specific campaign.

Percentage ROI - Calculate the return on investment for each campaign by subtracting total costs from total revenue, then dividing by total cost.
Once you've defined your performance metrics, you can use visitor behavior analysis to test the success of your marketing message or the effectiveness of various offers. If you want to know how effective your search engine marketing techniques are, you can compare your choice of various strategies.

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