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The Fundamentals of Website Analytics: Why They Matter, What to Measure, and How to Use Ethical Analytics Tools

The fundamentals of web analytics.

If you were on the internet in the early 90s, you likely saw the very first web analytics tool – Hit Counters. This early form of analytics (and the OG vanity metric) used a simple bit of code to show a number as an image and represented the number of visitors to that particular page. While today’s data analytics have come a long way from the original web counters, some of the same issues around vanity metrics remain present among service providers and anyone doing business online.

So retro - A screenshot of doteasy's hit counter.
So retro – A screenshot of doteasy’s hit counter.

Essentially, vanity metrics still rule the day. 

Look at any marketing agency that touts their SEO services, and “grow your organic traffic” is probably one of their biggest promises. Unfortunately, this binary way of thinking around analytics distracts from the actual goals that help business owners make informed decisions and invites unethical behavior to “win the traffic war” through clickbait and misleading content. 

For our clients, this kind of binary thinking about web analytics often feels very misaligned with their business mission and values.

For business owners, these vanity metrics lure sales and marketing teams into making big decisions around bad (or arbitrary) data points in an effort to make SEO findings look more valuable than they actually are. 

The conversation of analytics often surfaces after every client project we complete. Our clients want to know what they should be measuring, how to understand their Google Analytics dashboard, and how to protect the privacy of their visitors while also gathering the best data to aid in their decision-making process. 

So instead of keeping all this great information exclusive to our clients, we’ve decided to share it publicly as a service to anyone asking the same questions.

What are website analytics? Why do analytics matter? What should I be tracking? Are there ethical issues with using web analytics? How do data privacy and data analysis work in tandem?

What is web analytics?

At its core, web analytics is the process of evaluating data gathered from people who visit a specific website. TechTarget describes it this way: “This involves tracking, reviewing and reporting data to measure web activity, including the use of a website and its components, such as webpages, images, and videos.”

In its simplest form, website analytics works like this:

Sally visits your website, which she found on Google by searching for “yoga studio near me.” Once she clicked on the link to your home page, she also clicked on your class schedule. Then, curious about costs, she used a link on the class schedule page to view the commerce page where she could buy a single session or monthly pass. Sally closes her browser, not yet ready to purchase or turned off by the cost.

If you, as the business owner of the yoga studio, look at your website analytics for the day of Sally’s visit to your website, here’s what you would see about Sally’s visit:

  • One session from one new visitor through organic search with a click-through to the home page
  • Three pages were visited during her session
  • An exit from the Commerce page
  • Total time on site of three minutes
  • A failed conversion (assuming you’ve set up conversion as a purchase)

In short, Sally came. She saw. She left. But if we were to use these website analytics to understand Sally and her behavior better, we could make many educated assumptions.

  • Sally is interested in taking a yoga class.
  • Sally has never been to our website before, but she googled the words “yoga studio,” and based on her location and proximity to us, Google showed her our website as a top result.
  • One of Sally’s top questions is likely around class schedules since that was her first click on our website.
  • Sally is also considering the cost of our services.
  • Something on our commerce page failed us—Sally was not compelled to buy a session or a monthly pass either due to our lack of content, pricing, or some other factor. 

This process is web analytics. As you can see, we’re not concerned with traffic in any of this. Sally is just one visitor. But by having the tools in place to gather data on our website visitors, we can better understand what they want from us, how we can solve their problems, and how we can deliver our solution. 

Why do web analytics matter?

To understand why web analytics matter, we can continue with our example of Sally from above. While one visitor who failed to make a purchase isn’t that concerning, consider that this exact scenario is playing out hundreds of times per day. If you’re reviewing your website data and noticing that your traffic (the number of visitors who make it to your website) is excellent (by your internal standards), but your sales are down for the month, it requires data analysis to figure out why.

And, it’s not just about sales. If, as a business owner, you started your yoga studio (or flower shop or car repair business…) to help solve a problem you saw in your community, the best outcome is that people discover you, trust you to provide that service or product, and your solution solves their problem.

But unfortunately, thousands of website visitors per month do not get your ideal visitor any resolution to their issue. You may have increased your brand awareness, but ultimately, you’ve not delivered the unique solution that only you can provide.

However, by using data analytics to better understand what’s happening on your website (or what’s not happening), you can begin to make informed decisions about ensuring these visitors take action on your website and get the result you know they want or need.

Revisiting our example about Sally, we can infer that Sally thinks doing yoga may solve a problem she’s experiencing. If Sally never uses our yoga studio, she may continue to experience the same issue forever. If we can use an ethical approach to learn more about Sally’s struggle and make it easier for her to enroll in our yoga class, our mission of bringing yoga to our community will be successful.

This scenario is a very simplified version – on purpose. Marketers tend to make web analytics overly complicated and inaccessible, confusing, or overwhelming well-meaning business owners who want to know how to improve their websites. In truth, they don’t have to be complicated at all.

We can simultaneously make better-informed business decisions and give our ideal audience the information it needs to make better decisions when we use an ethical framework to examine data through the lens of human beings (and not just as a source of revenue).

Website analytics matter because people matter and people are at the heart of our businesses. When we seek to understand someone’s behavior for the sake of better understanding their challenges, their journey, and their intentions, we are better prepared to offer them a potential solution.

And in the era of social media platforms that profit from personal data collection and seemingly disregard the privacy of their stakeholders for the sake of advertising profits, ethical behavior in web analytics matters even more.

So how do we honor their privacy, protect their personal information, and approach this analytical process while staying true to our ethical principles? 

Is data collection an invasion of privacy?

In short, it can be. Ethical challenges exist inside every analytics platform.

Do we have the user’s consent to track their activity on this website? Are we committed to using their private data without invading their privacy? Do we have an ethical obligation to disclose how and when we review this data?

No one on our team has a law degree or primary expertise in this area, so we’re relying on the team at Fathom Analytics to give us some insight into this area.

In an article titled “Privacy-focused website analytics,” the Fathom team outlines how some big analytics players profit from business owners (and their website visitors) by gaining access to all their data. While those annoying cookie pop-ups appear to let business owners off the hook, they are simply a mask for what’s happening behind the scenes. When you use the “big guys” of the analytics world to gather and analyze this data, you also agree to let them use it.

When I the last time you looked at your web analytics?

So Sally, who is just going about her day trying to find a yoga studio? She might later see several ads on her social media feeds for yoga mats. That’s because that same tool for data collection has now stored her information and delivered it to their partners for advertising purposes. In short, ew.

But you just said that using this data for good is, well, good, right? Essentially, yes. We know as ethical business owners that we’ll use the information responsibly and ethically. However, it gets tricky when the tools we use to collect the data aren’t playing by the same rules. The problem here isn’t so much the collection of data but how that data is shared and used.

Fathom describes the problem this way:

“By using free software like Google Analytics, website owners freely give Google all the data about their website visitors, which can be matched to other website data from other websites, allowing Google’s advertising network to collect a lot of information about each one of us who uses the internet. So essentially, by using Google Analytics, people get free website analytics but trade the personal data from their visitors.”

How then do we overcome this ethical dilemma of trying to understand our website visitors better while also protecting their right to privacy online?

One of the best solutions is to use a privacy-focused website analytics platform instead of free solutions that trade your business for advertising dollars. Other measures to put into place around data privacy include:

  • Adding a privacy policy or statement to your website explaining how you collect data, why you collect it, and how you use the data
  • If you must use analytical tools that store and share the data, including a cookie banner notice on your website is a must.

Web Analytics for Business Owners

Now that we’ve agreed on what web analytics are, why they matter, and how to avoid the ethical challenges of data collection, we can consider which set of analytics is most worth our time and energy. 

You’ve likely opened your Google Analytics dashboard or Google Search Insights and thought, “okay, now what?” These platforms can be overwhelming if you don’t know what you’re looking at or why you’re spending valuable time analyzing the data. You’ve heard that you need web traffic and that using data to make informed decisions is the way to go.

But how? How do you know which data analytics matter and what they mean? And how do you translate that data into taking meaningful action to share your movement with your community?

Let’s look at a few beginner-level analytics and break down what they mean, why they matter, and how to track them.

Knowing which web analytics to watch and measure is one of the best investments of time a business owner can make.
Knowing which web analytics to watch and measure is one of the best investments of time a business owner can make.

Website Traffic

Web traffic typically reflects the total number of users that view your website in a given period. It doesn’t matter how they found you, what they did while there, or how many times they visited your website per day. It’s a cumulative number typically listed as “visitors.”

Why it matters: Your web traffic indicates whether or not people are finding your website. You’ve likely spent hard-earned money on a professional website or your valuable time creating it yourself, so you want to know that people see it. And, if you don’t have traffic, you can’t have conversions (sign-ups, sales, donations, etc.).

How to track it: Web traffic is primarily a vanity metric—data that looks good on paper (or on-screen, I guess) but doesn’t mean a lot. For example, you could have 1,000 visitors per day, and if none of them take any action on your site, it doesn’t mean much. It’s a nice number to watch and encouraging to see it grow as your marketing efforts grow (like creating new content or running ads that point to your website), but you shouldn’t use it as a stand-alone metric.

Page Views

Page views are just what they sound like – the number of pages viewed by a visitor or a group of visitors. So if Sally visits your website and goes to three total pages, that’s one visitor with three page views.

Why it matters: Page views indicate a person’s interest in your website. If someone lands on your home page and immediately leaves, that’s called a “bounce” and reflected as your “bounce rate” on your analytics dashboard. However, if someone enters the website on the home page and then views a couple of more pages, there’s some interest in what you offer. This is why your internal linking strategy is so important – it makes it that much easier for visitors to move around your website and explore your content.

Side note here – it’s important to emphasize that bounce rates are variable. Sometimes, a smaller website with just one page can solve a person’s question or problem without a click so the company may see a high bounce rate that’s of no concern. Or, sites with a well-designed homepage that includes the company’s essential information like an address or phone number may likewise solve the problem without the user needing to go deeper into the site. 

How to track it: Ideally, you want to see the number of page views per session increase. So, if in Q1 you had an average of three page views per visitor session and by Q2 you had an average of four page views, that’s positive growth. There’s no good or bad number here—just work to increase the number over time.

Traffic Source

Traffic source refers to how someone found your website. Most platforms typically divide this section into larger categories such as organic search traffic, social media, referrals, and direct. Organic search traffic means that someone searched a word or phrase on a search engine, saw your link, and clicked it.

Social media and referrals are pretty self-explanatory: either they came from a link on a social media channel or a link on another website.

Direct means that someone typed your exact URL into their browser search bar.

Why it matters: Understanding how visitors find your site is critical and a key metric to watch. If you’re working on a content marketing strategy and focusing on SEO as a tool for website growth, your organic search numbers should reflect that effort. Likewise, if you’re relying on just showing up on social media and hoping people will click your link, your data will reflect that. It’s also good to know which other sites are referring traffic to your website so that you can build those relationships and potentially add new ones.

How to track it: Track your traffic sources by watching where your current visitors are coming from and how your efforts are either growing that source or not quite working as you’d like them to. Pick a primary strategy to focus on (SEO, Ads, Referrals), and then watch your traffic source metrics over time to gauge your return on investment. 

Time on Site

Like page views in measuring interest, time on site metrics tells us how long a visitor stayed on your website. However, even if a visitor only visited one page on your website (like a blog post), they might spend two or three minutes on the site.

Why it matters: Time on site (sometimes called visitor duration) also shows how well our content performs.

If you have a low time on site but a higher conversion rate, this can mean that people are finding what they need and taking action quickly. Conversely, if you have a longer time on site but low conversions, it could mean that people cannot find what they need, and they are abandoning the site before converting.

How to track it: Watch your time on site compared to your conversion metrics for insight into user behavior and how well you’ve organized your content. It’s a myth that a long time on site equals a higher conversion rate. It can signal more interest if your website is heavy on content, but it can also signal an issue with poor navigation or website structure. This is a tricky one to measure but worth watching.

Conversion Rate

Of all the metrics to watch, conversion rates are the most important. 

We define a conversion as a visitor taking the desired action on your website. The rate part of the figure comes from taking the total number of visitors and dividing it by the number of people who took the desired action.

Examples of conversions include:

  • Completing an inquiry form to book a call or strategy session
  • Making a purchase / Signing up for a course
  • Completing a survey
  • Signing a pledge
  • Signing up for your email list (through a newsletter box or lead magnet)
  • Or, whatever other action you’ve deemed as a conversion goal

Why it matters: Conversion rates matter because that’s why our websites should exist, to move someone to take action. The beauty of conversion rates is that you, the small business owner, determine what conversion means to you. If you don’t have an e-commerce store, buying a product will not be your conversion metric. For you, it might be an email sign-up instead. Essentially, conversion rates tell us our websites are working in the way we intend.

How to track it: First, if you haven’t already, you need to determine what conversion goals matter to you. It’s nice to have at least two but less than four to focus your marketing efforts and website content around those specific goals. Once you have those goals, you can set up your conversion goals in your analytics platform or just watch the particular metric that corresponds to your goal.

For example, if your goal is product sales, most platforms already have a sales tracker. If your conversion goal is email sign-ups, you can monitor that inside your email platform or dashboard.

And remember, you’re only competing against yourself here. Resist the temptation to measure your conversion rates against anyone else. Of course, there are industry standards, but the best strategy is to continue trying to increase your conversion rate over time. 

Other web analytics to watch

There are hundreds of website analytics available through the various platforms. Some fall into the “interesting but not valuable” category, while others can be helpful to specific segments like B2B vs. B2C businesses. To quickly highlight a few more:

Exit pages – this is the last page someone visits before they leave your website. It gives you insight into how to improve pages with a high exit rate by adding better calls to action or more internal links.

Top content – the most viewed pages on your website. We typically see the home page and about page as the highest viewed pages on a website. Understanding your top content helps you focus your marketing efforts on particular pages you want to amplify or make a case for why a page (or set of pages) might need to be retired from your website.

Bounce rate – the rate of visitors who land on your site and leave before clicking any other link or page. A high bounce rate can indicate that you’re drawing the wrong type of traffic. You can improve bounce rates by altering your content to quickly communicate who you are, what you do, and who you serve, or by adjusting the content attracting your visitors (i.e., reducing clickbait). As we mentioned above, bounce rates are highly variable depending on your marketing strategy, so keep that in mind when examining this metric.

Page load times – the speed at which your website loads is often overlooked but significantly impacts user behavior. The first five seconds of page-load time have the highest impact on conversion rates. (Portent, 2019) Likewise, if your page load time is especially slow, you’ll likely see higher bounce rates and lower conversions.

This is not an exhaustive list but gives you a broad overview of why website analytics matter and how to use them to make more informed decisions in your business and marketing campaigns.

Where to start with web analytics as a beginner

It’s tempting to tuck web analytics away at the bottom of your to-do list and declare it “great but not for me.” For many, the task of checking analytics seems like a waste of time and an effort with little return on the bottom line. However, with your newfound knowledge of website analytics, why they matter, and what to measure, it’s time to put this information into practice.

First, choose a website analytics platform to use for your data analysis. If that feels overwhelming by itself, here are a few easy suggestions:

  • If you have a Squarespace website, just use the built-in analytics tool right inside your website account. It won’t capture everything, but it’s definitely enough information for beginners. 
  • Start with Google Search Console—a fundamental approach but a step beyond your built-in Squarespace Analytics.
  • If you’re feeling ambitious, go for Fathom Analytics (paid option) or Google Analytics (free option)

Once you choose your platform, record your baseline metrics on a simple spreadsheet or Google Doc. It’s best to select at least a 30-day period so you might need to wait a bit if you’re just signing up for the service for the first time.

Next, open your calendar and set a reminder to check back on the same metrics in 30 days. Record the progress and begin making internal notes about why your numbers might be higher or lower based on your marketing activities.

From there, you can decide how often to check the dashboard, what information to measure, and what kind of testing you want to do as a result. But remember, if you’re only checking the analytics for information and not making any decisions or changes as a result, it’s probably not a great use of your time. 

Three Key Takeaways to Remember About Website Analytics

  1. Many analytics are just vanity metrics—decide what’s important to you. 
  2. Your conversion rate is often the most important number to understand. 
  3. Don’t fear your numbers—even beginners can start to understand web analytics and take action.

Disclosure: Please note that some links on this website are affiliate links, which generates a small amount of revenue to support the free content we provide.

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