Web Analytics and Large Businesses - Essay Example

?Web Analytics and Large Businesses Introduction Businesses survive in the market by producing what s need. They need to somehow expose themselves and the products they have on offer so that potential buyers know where to get their needs. In this sense marketing involves communicating to customers the value that the products and services on offer present to customers and potential customers (Farris, Bendle, Pfeifer & Reibstein, 2009, p. 46). For a long time, businesses have relied on traditional methods of marketing such as print media, word of mouth, television, radio, billboards and posters. In addition to these, organizations today rely on the Internet, mobile phones, and websites to market their products. With big companies spending huge amounts of resources to market their products, it is essential that they make good decisions on how to invest on their marketing endeavors and to measure the returns on these investments. One of the tools used to provide metrics relating to online marketing is web analytics. This paper will discuss the importance of web analytics in measuring organizations’ return on marketing investment. Web Analytics and Its Importance The web has grown to become a very powerful vehicle for communicating and marketing as noted by Burby and Atchison (2007, p1). It makes it easy for businesses to communicate fast and easily with millions of customers spread across the globe in real time. As a result, it has changed the speed at which businesses and their brands can be established and grow. The web has also shortened the distance between the marketer and the customer both physically and emotionally to the period of a click of the mouse Burby and Atchison (2007, p1). With many large organizations appreciating the value of having a web presence, they are prepared to invest if only there is bound to be good returns on their investment (Clifton 2012, p. 1). Organizations have therefore to decide how much to invest in their online marketing endeavours and establish the most cost effective way to market the site and have valuable leads that translate into sales. A few years ago, many organizations with a web presence could not tell who and how many visitors landed on their websites. This is no longer the case today. Many large organizations today have the capability of knowing a lot about the visitors to their websites and the activities that the visitors perform on these sites, thanks to web analytics Burby and Atchison (2007, p. 14). Web analytics involves collecting, measuring, analyzing and reporting data retrieved from the Internet with the aim of understanding and optimizing usage of the web as noted by Peterson (2004, p. 5). Some of the variables measured on-site include drivers and conversions. In other words, web analytics is mainly dedicated to generating more leads to an e-business, enhancing brand awareness, and learning more about customers and the business (Loveday & Niehaus 2007, p. 34). The information that the organization in this respect includes how the customers find an organization’s website, how much they spend on each webpage and what they do when they land on the site. An organization, for example, can get to know which of the landing pages on a website lead more customers to purchase its goods or services online. Using this information, the organization can further optimize its web pages or make changes to some of its pages to attract more conversions (Napier 2006, 225). In addition to these, the organization may rely on web analytics to find a clue as to why visitors leave their website or a particular web page (Plaza 2009, p. 478). With this information, an organization can attract more visitors to their website and convert them into paying customers. Web analytics can be done on-site and off-site. Off-site web analytics involves the measurement of a websites visibility, potential audience, and buzz on the entire Internet (Farris, Bendle, Pfeifer & Reibstein, 2009, p. 54). On the other hand, on-site analytics involves the measurement of an organization’s website with respect to visitor behavior. While off site web analytics is important to businesses and gives them a hint on which keywords to use in marketing their products, more businesses tend to focus on on-site web analytics. Several web analytics tools have been developed by different organizations. Some of the most prominent include Google Analytics, Open Web Analytics, Yahoo Web Analytics, Optimizely, and Clicktale among others. With the cost of web analytics getting more and more affordable and yet more and more sophisticated, many large organizations are getting keen to track visitor activities online. There are several metrics than an e-business can use to track activities performed on its site. Some of these include visitors, referring sites, page views, keywords, key phrases, and bounce rates Burby and Atchison (2007, p. 25). Based on the metrics, an organization can generate data results sets for specific customer segments and, therefore, establish which segments to invest on targeting the most. Impact of Web Analytics to Businesses According to Global Industry Analysts, Inc. (2013), web analytics has become a major tool for marketers. In the United States of America where web analytics is widely applied by organizations, small and medium sized businesses have witnessed significant growth. One of the main advantages of relying on web analytics is that it helps markers make decisions. The data driven organization can use the data it derives from the analytics reports to come up with goals and metrics that will be communicated to every relevant member of the organization (30). With web the data derived from web analytics, the organization’s leadership has a good basis for making decisions as opposed to relying mostly on their intuition. The business also gets to invest around business goals. Marketers for example can justify every coin they spend on marketing and tie them to key performance indicators and organizational goals (Lenskold 2003, 46). In this sense instead of large organizations spending millions of dollars in the full redesign of the site, for example, they business channels the money to where it will be most effective. The organization in this respect needs to identify the aspects of its web channel that are most vital in driving business. If for example, the organization has a lead-generation site that is dedicated to getting visitors interested in whatever the organization offers, the site can be improved such as to convert the visitors into high quality leads. This can be done by streamlining the request forms to the extent of being able to separate bad prospects from good ones more easily. According to Loveday and Niehaus (2007, p. 30), many organizations consider their web presence merely as an expense, which should not be the case. The authors note that on average, the abandonment rate for online shopping carts stands at about 60%. Sadly, many large e-commerce organizations do not know their abandonment rates without ever trying to increase their return on investment (ROI). A study conducted by Jakob Nielson involving 42 usability-focused web redesign projects based on web analytics revealed that on average, organizations had their conversion rates improved by 100%, visitor count improved by 150%, user performance improved by 161% and use of target features grew by about 200% (Loveday & Niehaus 2007, p. 35). Issues and Controversies Surrounding the Application of Web Analytics Web analytics involves the collection of information about visitors to a website for the purposes of revenue generation, cost minimization, and customer retention. This being the case, large organizations that use web analytics risk losing sales, having lower brand equity, and doing a disservice to society if they fail to manage their analytics activities properly and ethically. One main issue that face companies that apply web analytics relates to breach of privacy as noted by Hanks (2013). By collecting visitor information, an organization may end up spying on individuals without their notice to the extent of being insensitive to their culture and privacy. Web analytics depends on third party cookies sent from the domain of the vendor as opposed to that of the website that a visitor visits. What this means is that by using third party cookies, the activities of an individual can be tracked across different sites. Many organizations that use cookies to track users deny doing this owing to the risk they face for breaching privacy rights. Furthermore, the analytics software are prone to providing misleading information especially in the event that users delete the cookies. In a bid to ensure that customers privacy is not infringed upon, many websites give notice to their visitors, through their privacy policy pages, that some of their private information will be collected and used for specific purposes. Yet another issue that large corporations have to deal with as they use web analytics relates to the wise use of data (Hanks 2013). When a large organization collects huge amounts of data regarding its web users or visitors, there are high chances that with some analysis, this data may be used to profile the users. The data may then be used for unethical purposes such as spamming their mails or to increase their revenues through unethical means. Furthermore, in the event that sensitive information about website visitors lands on wrong hands, it may be used to commit such crimes as identity theft, which may not be easy to correct. In order to avoid problems related to ethics, large corporations should abide strictly to the Web Analytics Code of Conduct. The code stipulates that users of web analytics should ensure that private information about visitors/consumers is kept private (Hanks 2013). The code also demands that companies should fully disclose their data collection activities and how they intend to use the data that they have collected from consumers (Hanks 2013). The code further demands that organizations should give visitors a way out of the data collection practices. Finally, organizations should respect visitors’ right to privacy as enshrined in law and as specified by customers. Suggestions for Future Research on the application of Web Analytics for Marketing The effective use of web analytics by companies has been associated with increased sales and therefore profits. Several analysts have noted the importance of using web analytics to generate more leads and conversions to businesses. Yet again different authors have noted about the ethical issues surrounding the use of web analytic tools. Currently, web analytics involves the tracking of visitors through their IP addresses and cookies. There is need to conduct studies involving the integration of internal data and data harvested from other sources such as social sites and websites for use by marketers. Furthermore, there is need for further study revolving around the blending of technologies from other fields (such as biometrics, psychometrics, and econometrics) with web analytics. Conclusion Many large organizations are using both traditional marketing methods and online marketing in a bid to reach customers and potential customers. These marketing methods involve the investment of resources. While previously companies could not track their visitors and their actions online, web analytics has made this possible. Web analytics is used to measure web traffic, the effectiveness of web pages and to make marketing decisions. Many organizations apply different web analytics tools to optimize their sites, create more leads, and achieve more conversions. Studies indicate that through the application of web analytics, businesses have been able to improve their visitors and sales significantly. Although web analytics has several advantages, it may be subject to misuse by some organizations. The data collected may be used to make more money through illegal means such as in the case where an organization sells private information gathered online to other organizations without the knowledge and permission of users. As the use of web analytics continues to abound, there is need to improve their capabilities. Studies should be conducted to establish how web statistics from one site can be integrated with statistics from other sites to come up with data that large corporations can use in making certain decisions. Furthermore, studies should be conducted to establish how to integrate web analytics with technologies from other fields. References Burby J. & Atchison S. 2007, Actionable Web Analytics: Using Data to Make Smart Business Decisions, John Wiley & Sons, New York. Clifton B. 2012, Advanced Web Metrics with Google Analytics, John Wiley & Sons, New York. Farris, P., Bendle, N., Pfeifer, P. & Reibstein, D. 2009, Key Marketing Metrics The 50+ Metrics Every Manager needs to know, Prentice Hall, London. Global Industry Analysts, Inc. 2013 Web Analytics - A Global Strategic Business Report. http://www.strategyr.com/Web_Analytics_Market_Report.asp Hanks G. (2013).Web Analytics and Ethics.http://yourbusiness.azcentral.com/analytics-ethics-22032.html Lenskold, J. 2003, Marketing ROI: how to plan, Measure and Optimise strategies for Profit, McGraw Hill Contemporary, London. Loveday L & Niehaus S. 2007, Web Design for ROI: Turning Browsers into Buyers & Prospects into Leads, New Riders, New York. Napier A. 2006, Creating a Winning E-Business, Cengage Learning, London. Peterson E. 2004, Web Analytics Demystified: A Marketer's Guide to Understanding how Your Website Affects your Business, Celilo Group Media, New York. Plaza, B. 2009, Monitoring web traffic source effectiveness with Google Analytics: An experiment with time series. Aslib Proceedings, 61(5): 474–482. Read More