Web Analytics is not the sexiest topic in the Search Engine world today, but is nonetheless very practical in measuring the performance of your website. So many people I come across have absolutely no idea what the traffic patterns are like on their website, much less their return on investment (ROI) or how much it costs to acquire a customer.

Mind you, many of these companies are giving thousands of dollars a month to SEM firms, PPC budgets, email campaigns, viral marketing and more, having no idea of what this investment really means, where the money goes, and if the company they're with is charging a fair price.

Taking a page from the direct marketing world, agencies are paid based on their performance and this performance is measured by certain key metrics that measure progress towards certain goals (leads, subscriptions, downloads, sales, etc.). If we look at all of the targeted marketing that can be done online vs. via list brokers (even in-house lists) and traditional direct marketing (DM), internet marketing seems like direct marketing on steroids.

Additionally, the same metrics that add to the success of a DM campaign can be applied to all of your internet marketing objectives, and much like direct marketing, there are tools that can sort through tons of data to provide information that can validate your online goals.

These include sophisticated web analytic services that provide information which can actually help convert browsers to buyers on your website. A good web analytics program should offer all of the services below; each one performs a specific function that is necessary to tracking the success of your website, such as:

* Scenario Analysis. This examines the actions of visitors through the steps they take from initial visit to check-out. This allows a business to identify which paths lead to sales and modify the navigation accordingly;

* ROI Analysis. To justify the dollars spent on links, PPC, or other CPM, CPA, or other ongoing SEO campaigns, you need to know which tactics are producing a positive ROI and which tactics need to be re-evaluated or eliminated. Usually, you're able to drill down into this data to see more details such as which PPC keywords drive the most traffic, or more importantly, sales:

* Sales Summary Reports. These should offer a 'big picture' look at numerous variables, including seasonal trends, peak buying hours, revenue earned per unique time frame (quarterly) and average order size. This report should generally be graphical or presented in an easily understandable;

* Advanced Merchandise Reporting. This helps merchants identify specific items a customer adds/deletes/buys from their shopping cart, to tap into trends for specific products and help optimize the timing of promotions and other marketing messages;

* Organic Search Report. This gives you an ROI figure for all of your organic search terms. This is what you should get monthly if you are hiring a professional SEO firm or consultant;

Although plenty of other reports can be generated to validate your marketing dollars, good analytics can mean squeezing more dollars out of your website turnip.