What is Online Analytics?

Often referred to as web analytics, online analytics is the process of collecting information to understand the behavior of a website’s visitors. It generally involves tracking visitor activity, predicting future patterns, and, ultimately, analyzing site performance. With online analytics, a website owner can learn where visitors are coming from, figure out why their pay-per-click (PPC) campaign is not converting to sales, in what areas their website is lacking, and much more.

Online analytics tracks visitor behavior by employing one of two methods: analyzing traffic logs once data has been acquired or tracking data in real-time as it comes in. The oldest technique, traffic log analysis, works with raw traffic data gathered by a server, usually presenting statistics in the form of charts, graphs, or tables. This type of analytics can reveal information such as requesting URLs, browser and operating system type, number of page views, and unique visits.

The more advanced online analytics technique involves analyzing data as traffic comes in to a website. Leveraging this approach, site owners can discover answers relating to visitor behavior, customer retention, and site performance as it happens. This method requires more sophisticated software and often comes in the form of a fully managed, hosted service. Log analysis tools are more simplistic and normally come included in standard web hosting packages.

Businesses interested in obtaining an online analytics solution must consider whether to opt for a hosted service or licensed software. In a hosted environment, the analytics company generates and maintains the customer’s log files off-site, charging them based on a tiered subscription rate. The advantage here is that the provider typically does all the hard work in terms of analysis and reporting, all while maintaining the client’s steadily growing log files.

Licensed online analytics software can typically be purchased once, and installed on a web server. This type of solution offers the advantage of having greater control over reporting, archived data, and other essentials. It might also require higher internal costs in order to support ongoing analytical procedures.

Online analytics solutions are widely available. Some of the more popular options include CoreMetrics&reg, WebTrends&trade, and Omniture&reg, to name a few. The Urchin analytics software distributed by Google&trade is among the most widely used programs as it is free to use, and largely considered more efficient than some of the paid options on the market. Because every website is unique, the best analytics solution is often defined as the one that meets the budget and business objectives.