Thursday 29, July 2010

My Birthday and Business Partner

Today’s newsletter is about your website traffic. Many people have trouble interpreting the data in a meaningful way. So, I’m going to explain why it’s interesting, useful, and important. But before we get to that, here are some personal and business updates.

The photo you see on the right is me at my 43rd birthday party. I just invited a bunch of Annika’s friends to the kid’s section of Tompkins Square Park. There were many other kids having birthday parties there that day. My impression of my own father at 43 was someone who was very mature and together. There is a big discrepancy between that impression and how I feel inside as a father. In many ways, I still feel like a kid, not quite qualified to be called a “father”. So, the setting for this party was rather appropriate.

On the business side of things, I would like to give you a heads-up. My long-term friend Michael Kay and I decided to team up. We are going to form a partnership (LLC) and start operating under this new entity soon. We decided to call it Cycle Interactive. For my existing clients, everything will remain the same except for the billing information. This partnership is just about pulling our resources and sharing our expertise.

Michael was my roommate in college. We had another roommate named Janet and three of us lived together in a 3-bedroom apartment right across the street from our school (School of Visual Arts on East 23rd Street) where we studied fine arts. We used to stay up all night debating about politics, art and philosophy, and Janet would tell us to shut up. We disagree about many things, and we often passionately argue, but that has never become a problem in our 23 years of friendship. So, I'm looking forward to building a business with him. I encourage you to check out his collection of photos of urinals.

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How Popular Is Your Website?

Surprisingly this is not an easy question to answer. Suppose the data from your Web server says you get about 50 visitors a day. Is that high or low? Well, it depends. In order to figure out whether your website is “popular” or not, you would need to be able to compare your website with those of other businesses similar to yours. For instance, if you are a magazine publisher, 50 visitors a day would be quite low. Given that you have to make money from visitors seeing ads on your site, 50 visitors could not sustain your business. On the other hand, if you are a lawyer, 50 would be a lot. Lawyers typically make thousands of dollars from each client, so having 50 potential clients looking at your site every day would be good news. In other words, the number of visitors is somewhat proportionate to the amount of money the average customer spends for your business.

Another factor is your physical presence. Suppose you start an online business selling hats, and your competitor opens a store on Broadway that also sells hats. Suppose your competitor also has a simple website for his business (but he does not sell anything through it). Who would get more visitors? In most situations, the one with a retail store will. The part of the rent you pay for a retail space is essentially a marketing budget. People walk by the store and learn about your business. If your business exists only online, it’s equivalent to a store that is on the 85th floor of the Empire State Building; nobody would just happen to walk by it. With no marketing, you get zero visitors.

If you have a relatively successful retail business like a restaurant, you would probably get about 30 visitors a day to your website, even if you did not promote your website at all. People who are interested in going to your place of business would search the Web to get some information. In other words, they already know something about your business, and they want to know more. Although 30 a day does not sound a lot, it’s pretty hard to get that many visitors to any website these days. (According to Netcraft, there are now over 200 million websites in the world.)

Now, how do you find out how many visitors are coming to your site? If you are one of my clients, your site should already have Google Analytics (GA) installed. GA is pretty much the industry standard these days. (If you would like to take a look, let me know; I can provide the login information for you.) It is very powerful and gives you so much information that you might feel overwhelmed at first. The main thing you would want to know is how many visitors your site receives every day. You may hear people talk about “hits” but they are misleading. “Hits” typically means the number of requests for files on your Web server. If a page contains 20 images, viewing this page would generate 21 “hits” (20 images plus the page itself). So, 10 visitors viewing this page could generate 210 hits. If they view 10 pages each, the number of hits can grow rather quickly (2,100 hits). So, when someone says, “I get millions of hits every month”, it’s not as impressive as it sounds. What matters is the number of visitors, not “hits”.

You also want to see how the number of visitors fluctuate over time. If your business is mentioned in a magazine or on another website, check to see if your traffic spiked. If you place an ad in a magazine, if you participate in an event, or if you have a big sale at your store, see how your website performs. Over time you begin to see patterns, and you might be able to see which promotional or PR efforts are more effective for your business. In my own experience, getting a mention in a popular blog drew far more visitors to my sites than, say, New York Times did. It’s rather surprising.

You may also want to look at “referring sites”. Google Analytics shows you which websites are linking to yours, and how many visitors they referred you. By going to these websites, you can see what people are saying about your business. If any of them are saying negative things about your business, you could email them, address their complaints, and turn them into positive referrals.

In most cases, Google is at the top of the list of “traffic sources”. It’s common to see more than half of the visitors coming from Google. In GA, you can also see what words they searched on Google to arrive at your site. This too can be surprising and helpful. You want to make sure that people are coming to your site for the right reasons.

You can also see which pages of your site are popular. This too can be surprising. Many people assume that visitors always come into their websites through the home page, but this is not always the case. The search engines send visitors directly to the individual pages of your site, so your home page is not necessarily the most popular page on your site. By looking at the popularity of your pages, you can see what kind of information people are seeking.

You can also see what devices people are using to view your website. If you see a lot of mobile devices (like iPhone/iPad, Blackberry), it would be a good idea to make sure that your site can be viewed properly using these devices.

Beyond these statistics, if you really want to know how your website stacks up against others, you could install Quantcast on your website. You could then see the ranking of your website. (Quantcast provides an estimate even without installing their code on your site.) Here is a Quantcast page for one of my own websites. The traffic data for websites used to be closely guarded secrets but now a lot of websites seem eager to show the data to the world so that they can attract advertisers. You can look up your competitors on Quantcast and see how they stack up.

Unlike printed media, websites give you valuable data about your customers and the effectiveness of your marketing efforts. You can learn from each effort and build on it. So, I would recommend that you start peeking into Google Analytics if you haven’t already.

Hope you are staying cool in this record-breaking heat. As always, if you have any questions or any topic you would like me to cover, please email me.

Best Regards,
Dyske

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