How Much Is Your Web Site Worth?

By Kelly Kubrick

Best practices in Internet marketing assume that Web analytics - the analysis of traffic to and through your Web site - is a core part of your decision-making process. At one time, companies felt compelled to have a Web site - good, bad or ugly; nowadays, companies also need to know how much value their Web sites actually generate.
As with any asset, value is a function of performance. Was it worth the dollars spent? Will it continue to generate a return? In the case of the Internet, this is all the more important as the Web site may now represent an opportunity cost: dollars you might have otherwise spent elsewhere. Increasingly, companies are pondering the question of marketing budget allocation. Typically, marketers debate how many dollars should be spent on outdoor signage versus print literature, print and broadcast advertising vs. direct mail. Ideally, the allocation is based on the most efficient spend: the one that brought the highest return for the dollars invested.
What happens when you throw the Internet into that mix? The first issue that crops up is that, unless the marketing budget is on the rise, spending on the Web generally assumes a reduction in spend in other channels. So, what gives and by how much?

To facilitate that discussion, you need to clearly understand the value of your Web site relative to other channels. To do that, let's return to Web analytics. Officially, Web analytics refers to "the objective tracking, collection, measurement, reporting, and analysis of quantitative Internet data to optimize Web sites and Web marketing initiatives."
Sounds great, but where is that data? And how can you get your hands on it?
By virtue of having a Web site, the computer that hosts your site (the Web server) generates the data. This is what makes the Internet unique from other channels: it's highly measurable. When a visitor requests to see one of your Web pages, a stack of data is generated to record that transaction. It's like visiting the bank; your teller will ensure you have a record of all information relating to each transaction, such as the date and time, the source or location where money was withdrawn from or deposited to, etc. The Web offers the same kind of data and, in fact, so much data that the bigger problem is acting on it.
There are a variety of Web analytics tools available to see the data your Web server generates. As always with marketing tools, they can be found for very little cost (if any, in some cases) to thousands of dollars per month. Ask your Webmaster which tool you use and how you can access the reports. If there is no such tool, you have a bigger concern to address first: You need to investigate why the Web server data is not being captured and processed for your use. As some old wise sage said, you can't manage what you can't measure.
Assuming that all is well, however, the metrics you should focus on at first are visitors, visits (sometimes called sessions), sources of visitor traffic, and content consumed during visit. Each one of those metrics will tell you something about the value your site is generating. For example, how much use the site is getting, by how many people? You can also learn how those visitors found you. With that information, you can begin to compare the Internet to your other marketing channels: Is the Web generating more prospects than print? Or of a different quality? For more or less cost per lead? What does that imply about future marketing efforts?
As a final comment, notice that the list of metrics does not include "hits". This is of critical. Hits are not included because they are not an accurate measure of demand. It bears repeating: Hits are not an accurate measure of demand! Unfortunately, many Web site owners talk about "hits to my Web site" as if that represented the number of visitors arriving at their site. Instead, hits refer to the weight of a given Web page. That's like measuring how many kilograms of prospects came to your sales centre instead of the number and value of prospects who visited. Not particularly useful… and neither are hits.
Instead, think about value: What is my Web site doing for me today? Could it be doing more? The likely answer is "yes", but you won't know until you take a look at that data.
Next issue, we'll look at what the numbers mean and what you should do about them. HB