This post was originally written by Tim Trefren on
The Web has hit a point where tracking pageviews is useless for startups.
There was a time when all you needed to succeed on the Internet were lots and
lots of eyeballs, and the best way of measuring those eyeballs was by tracking
pageviews (measuring exactly which pages on a website are viewed by individual
visitors). The dot-com crash showed us that the eyeball-based business model
was a failure.
Since then, startups have moved toward direct monetization strategies such as
subscriptions and virtual goods – and these businesses using these strategies
require very different metrics than an advertising-based business would. Make
no mistake, pageviews were valuable metric once, but their time has passed.
For startups that sell something, metrics like average revenue per user (ARPU)
and customer lifetime value (CLV) are vastly more valuable than detailed
pageview tracking. It doesn’t make any sense to focus on pageviews (an
approximation for value) when you can measure the real thing directly.
There’s also a clear pattern in the direction the Web is heading – toward
interaction and responsiveness, and away from separate pages. If you’re going
for incredible user experience, on-page interactions are your bread and
butter. Can you imagine what a drag it would be if the page reloaded every
time you commented or ‘Liked’ something on Facebook? It would be awful.
This trend further devalues the pageview as a valid metric. If you have a
highly interactive Web application that spans only a few pages, there’s not a
whole lot of value in seeing how many times those pages were loaded. Much more
valuable information can be found by tracking the parts of your application
that your users are interacting with the most. The benefits here are twofold:
You can directly measure the things that are important to you, and you gain
unparalleled insight into how people actually use your application.
If Not Pageviews, Then What?
When you’re deciding how to incorporate analytics into your strategy, the most
important thing is that you are gathering actionable data. By this I mean
that you have to be able to use the information you gather to make a decision
and take action. If you’re not going to use it to make a decision, it’s a
waste of time to even look at it.
With this in mind, there are a few areas we should focus on: split testing,
interaction tracking, conversion funnel analysis, and click tracking. These
methods will give you the information you need to both improve your conversion
rates and your understanding of user behavior.
Just a few years back, your only options were to roll your own analytics or to
pay tons of money to a giant company like Omniture. This left startups in a
tough spot, one many startup founders still encounter today: it’s difficult to
justify putting a lot of development time into analytics when it’s not your
main product, and it’s hard for a small company to work with a large sales
Luckily, the analytics landscape is changing. Many new companies are sprouting
up to handle every aspect of your analytics, freeing you from the need to
develop your own internal tools.
Split testing involves creating different versions of your site and measuring
how the changes affect user behavior. Your changes can be as small as a
different call to action or as large as a complete redesign. With this data in
hand, you can make changes to your website to massively improve your
What companies do it?
- Google Website Optimizer is a free multivariate testing solution. It makes it possible to change a number of different things and determine the optimal combination of changes.
Conversion funnel analysis
Funnel analysis is a way of measuring conversion rates across multiple steps
of user acquisition. For example, you can measure the rate at which visitors
from the front page go to the pricing page, and then how many continue on to
actually create an account. This is an incredibly important concept to
understand, and can be applied to many aspects of your application.
What companies do it?
- Mixpanel (my company) is a freemium service that provides funnel analysis and segmentation.
- Google Analytics has a feature called Funnel Visualization that provides basic pageview-based funnel tracking.
- KISSmetrics is a new company with a funnel analysis product in closed beta.
Click tracking is a great way to measure how effective your website is. Every
click a visitor makes is recorded, so you know which links and buttons are
receiving attention. There are a number of ways to report this data, but the
most popular is to overlay an image of your website with a heatmap of all of
the clicks. If your users aren’t performing as you expect, you can try
changing the page and continuing the test.
What products do it?
- ClickTale is a freemium service that can generate click heatmaps and movies of single visitor sessions.
- CrazyEgg is a paid service that can generate a few different reports for your visitor click activity, including heatmaps.
Event tracking is a way of measuring exactly what users are doing on your
site. Things like invites sent, videos played, and user signups all count as
events. This functionality will grow more and more important as the Web grows
What companies do it?
- Kontagent is a freemium service that is focused on Facebook applications. It can track Facebook-specific events like invites and notifications, among other things.
- Google Analytics recently added basic event tracking to complement its pageview based service.
Measure Relevancy, Not Your Ego
Ultimately, analytics are crucial to online success. If you want to improve
your startup, you’ve got to be measuring it. It’s critical to measure the
right things, though – the things that are actually important to your
business, not things merely appeal to your ego. It can be mesmerizing to watch
the unique visitor count go up day-over-day, but this is a dangerous
diversion. The era of eyeballs equaling success is long past, so you should
instead be measuring the things that are truly relevant to your business.
If you’re not measuring your visitors yet, I urge you to get your toes wet –
track something small. The conversion rates for the buttons on your front page
would be a great place to start.