News Feature

E-Commerce Tools: Web Metrics That Matter

By Susannah Patton

November 15, 2002 — CIO — So you want to buy a Saab. If you’re looking to buy one in the United States, you might start your search at Saabusa.com. There, customers can compare the latest models and find a dealer. Then they can actually go to the dealer showroom and buy a car. Or they could just move to another site and forget about a shiny new Saab. In either case, the folks at Saabusa.com have no way of knowing whether they are motivating online customers to visit a dealership.

So while the site’s operators can track the number of hits and level of traffic, they cannot analyze where or why a customer abandons the site. "We need to move beyond hits and traffic and find out what motivates people to go to dealerships," says Richard Amling, the webmaster for Saab Cars USA, based in Norcross, Ga. Amling notes that Saab is in the process of shopping for a Web analytics software package so that it can analyze customer behavior.

During the dotcom heyday, companies slapped sites on the Web and waited for traffic to pour in. They counted "eyeballs" and measured their site’s "stickiness" as a way to convey the online real estate’s value to advertisers. When the Internet bubble burst, "sticky eyeballs" seemed suddenly worthless. Now, as the Web has moved from being a technology pipe to a sales channel, companies such as Saab Cars USA need to update their Web measurement strategy with new metrics and analysis tools that can help them analyze customer behavior and improve their site’s business success.

But while hits were once the metric du jour, the new metrics are not so clear-cut. "There is no standard metric that a company can rely on for its website," says Randy Souza, an analyst at Cambridge, Mass.-based Forrester Research. "Metrics will be different from company to company." Where a retail site might be focused on conversion rate (the number of online shoppers who actually buy something), a business-to-business site might value site reliability and speed above all. In short, the most valuable metrics will depend on what you are trying to do with your site. Once that is determined, large enterprises should consider buying software to help analyze Web data, while midsize and smaller companies should consider a hosted service.

That’s already happening and will likely increase in the next few years as companies come under increasing pressure to document their website’s value. By 2006, Jupiter Research estimates, annual spending on site analytics will reach $1 billion, by which time ASP-based services will account for 29 percent of spending. While IT leaders don’t always need to be directly involved, CIOs should be able to suggest valuable metrics to marketing and operations departments. Measuring a website’s success can also be crucial when CIOs are forced to defend e-business spending. And IT leaders will need to partner with other business units on site redesigns that result from the analysis of Web metrics.