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One of the awesome things about the current set of web analytics applications is that they allow you to measure most any activity on your website. This can be a double-edged sword as most website owners don’t really understand the value of the data they have harvested, nor do they understand the limitless opportunities this information provides them and (more importantly) their business. So the data is gathered and it often ends up languishing on a server somewhere without the benefit of having been sliced, diced, poked and prodded.

I happen to love exploring data, and leveraging it in order to improve the things that fall under my purvey.

Stake in the ground: IMHO (In My Humble Opinion) you can never have too much information. In fact, the more the merrier! In the web analytics world, this translates through to me saying that one should collect as much data as possible with their web analytics application (Google Analytics, Webtrends, Woopra, etc…). You may not need the data now. But you probably will down the road.

The downside is that all of this data can be overwhelming to some. Akin to drinking water from a fire hose!

Simply installing a web analytics program really gives you nothing; apart from the ability to say that you have one installed. You need to look at your web presence and determine in the most basic of terms why it is there and what you want it to do for you. Simple enough. From there, you then take the data that is spewed (in such copious amounts) from your web analytics application and use it to move you and/or your business forward.

Out of the box Google Analytics (for example) gives you loads of information. But that is really only the tip of the proverbial iceberg. The true power only comes to light when you dig into things and set particular targets. I have mentioned this often in the past.

For example, paying for inbound traffic through simple links or perhaps a banner ad is possibly a good idea. But, say you are laying down some serious coin for a banner ad. Surely you would want to know how much traffic your investment was bringing you. Moreover you would want to know what the fine people who were kind enough to click-through to your site did once they got there.

In the case of a banner ad, you are well within your rights to ask the provider to insert a small JavaScript snippet that will segregate the inbound traffic in Google Analytics (or whatever app you are leveraging) so that you can measure how many click-throughs you are getting. This way you can easily determine your cost per click of your banner ad. Also, it is advisable to have them link through to a webpage designed specifically to accept this paid traffic. You don’t want them hitting your main landing page if the goal is to point them to a specific product or service. Plus this is the only surefire way of not only counting how much traffic you are getting for your investment, but also where they go once they get there. You can easily determine the ROI of a banner ad is very low if the bounce rate of the dedicated landing page is 100%! Or very high, if a large percentage of ¬†potential clients go from the particular landing page to your “Contact Us” page and request more information (Conversion!).

The scenario I outlined above is just a small slice of a bigger pie.

You need to look at each and every aspect of your website and determine what is measurable, how to measure it, and how to leverage the data you pull.