Are you like many mid-size or small business owners I know? Have you spent a ton of money on your website but have a hard time understanding the ROI? Let me guess, you are on your second, third or even fourth version of your website. You have spent countless hours listening to your graphic design company about color combinations and the newest flash animation that is going to engage your customers. You continue to dump cash into your web presence because you know the value is there, but value is similar to radio, print or television advertising. You know that marketing and advertising is a “must do” for your business and that is why you have an annual budget for marketing and advertising investments. But, everything is as vague as it ever was and you are as frustrated as you have always been because just like television advertising, radio advertising or print advertising – your internet investments are tough to truly measure. You think the radio, tv and newspaper ad worked, but you can’t say for sure.

The web is inherently different. Everything is measurable. I know what you are thinking, “Yah, yah … I’ve seen those big reports that get emailed to me every quarter from my web development company that basically show big numbers in an effort to cut them bigger checks.” I understand and appreciate that mentality. Why? Because you are busy selling cars, shoes, clothes, fishing trips, lodging, real estate properties, stuffed animals, bicycles, engineering services, construction services, IT services, software, tutoring services, dog food, etc… You are too busy doing what you do best and it’s easier to do what you do with other advertising and marketing channels – just put a budget aside every year, pay someone to manage it and hope for the best. After all, you don’t have time to understand the difference between hits, visits, page views, keywords, referrer, and all that stuff.

Trust me, you can understand this stuff and as a business owner you need to understand this stuff. Do you need to understand it to the degree that I do? Maybe, maybe not. That’s up to you. But, just like your bank accounts, credit lines or retirement investments – you need to and can easily understand the fundamental measurements. Imagine not knowing your current interest rates on lines of credit, how many employees you have, the current status of your 401k, or how this years sales numbers compared to last years. You can’t imagine that, because you need to and want to understand those things – at least to the degree that you can make wise, well informed, and business critical decisions. Do you have to understand the infinite complexities of the stock market and understand the stock market to the degree that your financial advisor does? No. That is why you pay him/her. Do you want to and need to know how much you are investing, where you are investing it, and your return on investments. Absolutely.

So, let me show you a very base level and simple measurement that you can and need to understand. The goal of this demonstration is to make you say to yourself, “I get it. I wonder what my website ‘pie’ looks like?” If this blog gives you the inertia to want to find the answer to that question and the answer to that question becomes the incentive for you to want to better understand how to value your web assets, then the goal has been achieved. So, ready for how simple this pie chart is to understand? Here it goes:

There are only 3 possible ways people can get to your website. Yup, that’s it.

1. Search Engines: Traffic that comes to your website as a result of a search engine user typing your brand name or key words or phrases that relate to your business products and services into a search engine. This pie chart clearly shows that search engines are the most valuable traffic driver to the xyz.com website. 60.86% (10,616 visits) of the total traffic (17,443 visits) within a 1 month time frame comes to xyz.com from search engines. The name of the actual website has been excluded for anonymity purposes.

2. Direct Traffic: Traffic that comes to your website as a result of users typing your domain name directly into their web browser. This pie chart clearly shows that direct traffic is the second most valuable traffic driver to the xyz.com website. 22.23% (3,877 visits) of the total traffic (17,443 visits) within a 1 month time frame comes to xyz.com from direct traffic. The name of the actual website has been excluded for anonymity purposes.

3. Referring Sites: Traffic that comes to your website via a link from any other website. This is traffic that comes to xyz.com from blogs, forums, or websites where advertising dollars are spent to promote xyz.com.  It is important to note that it is very easy to measure the exact amount of visits that each referrer sent to xyz.com. This pie chart clearly shows that referral traffic is the third most valuable traffic driver to the xyz.com website. 16.91% (2,950 visits) of the total traffic (17,443 visits) within a 1 month time frame comes to xyz.com from referral traffic. The name of the actual website has been excluded for anonymity purposes.