RSS Ray interviews Jim Sterne, President of the Web Analytics Association, on why web analytics is an essential part of your online marketing strategy.

RSS Ray recently sat down with Jim Sterne, President of the Web Analytics Association and founder of Target Marketing of Santa Barbara for the latest installment of Ray Raps. During the interview, Jim offered some important insights into the world of web analytics that you can’t afford to skip.
What is web analytics?
The Official WAA Definition of Web Analytics:
Web Analytics is the measurement, collection, analysis and reporting of Internet data for the purposes of understanding and optimizing Web usage.
How does it work?
There are a number of ways to collect information about visitors to your website. Each web server has a Log File that stores data transmission information, the pages themselves can contain javascript that helps track a visit and each visitor can get a cookie to help recognize them as a previous visitor – and a lot more.
How is it used?
These data are brought together for benchmark reporting (how well are we doing compared to last month?), website optimization (how easy is it for people to use our site?), process optimization (how do we get more people to sign up for our webinar/download our whitepaper/buy our products?) and marketing optimization (which message/offer seems to get the best response?).
Why should companies use web analytics?
How much are you spending on your website? Wouldn’t it be nice to know if that’s money well spent? Wouldn’t you like to earn more return on your Internet investment? If you don’t measure it, how do you know?
What is the measure of a successful web analytics strategy?
When a consulting client tells me:
"We run our website by the numbers. We have specific business goals we are trying to achieve and we are using the data from our website to tell us if we are moving in the right direction. We can actually use our web analytics data to inform the rest of the company about what features to add to the product and how many to ship to which parts of the planet. We are basing our promotional pitches on the radio and in print based on how people respond online" then I say, "My work here is done."
Why aren’t more small companies paying attention to web analytics the same way they do a P&L?
Smaller companies look at web analytics as another opportunity rather than another fire to put out. If you had the opportunity to hang new curtains in the den or put out a fire in the kitchen, which would you choose? The problem with this perspective is that your website *is* a fire – it’s burning money! Web analytics gives you the visibility you need to see where that money is being wasted and how that website could be made to more than pay for itself.
What kinds of results can one expect?
Reports – lots and lots of reports. What results can you expect from a gym membership? If you don’t use it, use it sporadically, use it wrong, you can expect nothing, little or injury. By the way, the reports are very interesting, but without applying some brain power (analysis) they are not useful. They tell you what the numbers are but you have to decide what the numbers mean, what to do about it and then measure the impact of those actions. Then you can expect great and continuous results.
What are the steps to creating a successful web analytics strategy?
- Have clearly identified business goals.
- The ability to make website modifications easily and quickly.
- A willingness to test things rather than assume you know what’s best.
- Recognize that you are not the target audience and let the numbers tell you what your visitors like.
- Put more attention into the people you hire than the tools you use.
- Look for low-hanging fruit (things that need fixing, conversion processes with unambiguous success metrics) so you can show off your progress.
- A commitment to continuous improvement.
How does one get started with web analytics?
The three things to get started are:
a) Carefully tagging all of your website pages or at least the ones you want to track.
b) Assiduously watching the numbers against a specific goal set.
c) Hiring somebody who is naturally curious and really understands your business goals.
What tools do you recommend for getting started with web analytics?
Google and Yahoo! have free tools you can use and they are a lot more powerful than you could hope for. With no experience in web analytics, the most sophisticated website could use these free tools for a year without running up against some of the reasons that there are other companies selling web analytics software-as-a-service and applications.
Is a web analytics campaign something that needs to be constantly monitored, or can companies set it up and forget about it for awhile?
Is steering your car something you can set and forget? You can get away with cruise control if you’re on an empty road in the middle of nowhere, but try that in the city and be prepared for higher insurance premiums. No – you may not forget about it. That’s because the Internet is not a brochure. You print a brochure once in a while and it flies off the shelf – great. But the Internet is a two way street and you cannot ignore how people are consuming your information nor what they are saying about you to 10,000 of their closest friends.
Are there certain types of industries better suited to using web analytics?
The websites that are not suited to web analytics are those that have been abandoned by their owners. If you have a website and you want it to improve, then web analytics is the way to go. If you don’t care, then neither does anybody else.
The most obvious website to benefit from web analytics is the eCommerce site. But that’s only because the goal is obvious. B2B companies are making great strides in improving how well their websites act as lead generation tools and how well they improve customer satisfaction.
Is web analytics a venture a company can undertake itself, or should they hire outside help?
It’s easy to get started, it’s hard to get started in a meaningful way that will lead to a long term strategic program. Haphazard is never in it for the long haul. It might be interesting to sprinkle some tags on some pages and see what the reports say, but doing it well and interpreting those reports well is a skill – one that I recommend you rent-to-own. Hire a consultant to come in and help you set it up and then teach you how to get the most out of it.
If hiring outside help, how can I separate the good from the pretenders?
Talk to their clients.
How much should I expect to pay to get started and on an on-going basis?
This is a young industry and there are lots of consultants with a large range in pricing. Talk to their clients.
What is the Web Analytics Association?
The WAA is a non-profit, membership driven, volunteer organization that … wait… where’s the official… Ah, here it is: The Web Analytics Association leads and supports the members by providing quality education, developing standards and best practices, conducting research and advocating for issues that advance the industry.
The WAA got started because the audience at the eMetrics Marketing Optimization Summit wanted to keep working together to guide and build the industry. Now we’re 1,700 people strong and growing.
Who should join and why should they join?
Anybody whose job depends on knowing what their website is doing and making it better should join. They should join to network with others in their same situation, to take courses that teach best practices and tricks and traps and to help define what the standards might be. We are trying to put some logic into an industry that’s only been around for a dozen years or so.
What are the major learning events for the association in 2009?
The eMetrics Marketing Optimization Summit is the official conference of the Web Analytics Association. More about the nine events this year at http://www.emetrics.org. There is also an online course run out of the University of British Columbia and the University of California at Irvine that has been a huge success. We are also starting to roll our Base Camp workshops which help introduce people to web analytics.
What do you see as the future of web analytics in the next 3-5 years?
Web analysis is a different sort of data analysis. It isn’t just stirring up the data to look for patterns, it’s also optimizing specific processes. Today, those are website visitor processes, tomorrow they will be strategic marketing processes. The day after tomorrow, we will be using web data to provide strategic business insight. Some companies are doing that today.
The group I most need to join is ___________ because ______________.
The Web Analytics Association, an eMetrics Marketing Optimization Summit, the Yahoo! Web Analytics Forum, and a Web Analytics Wednesday gathering near you because if you’re not measuring the success of your website, you cannot manage your website.
Jim Sterne is the President and Founding Director of the Web Analytics Association and the founder of Target Marketing of Santa Barbara. In 1994 he produced the world’s first Marketing on the Internet seminar series. Today, Sterne is an internationally known speaker on electronic marketing and customer interaction. A consultant to Fortune 500 companies and Internet entrepreneurs, Sterne focuses his 20 years in sales and marketing on measuring the value of a web site as a medium for creating and strengthening customer relationships.
Sterne has written five books on Internet advertising, marketing, and customer service including, his most recent, “Web Metrics: Proven Methods for Measuring Web Site Success.”