Not all traffic is created equal – a guide to ecommerce

By Conrad Owens


While recently preparing a report on the annual traffic to a large corporate website, I had many opportunities to pause and reflect on the nature of Internet traffic and the difficult job businesses have in procuring this traffic, holding on to it, channelling it in the right ways, and turning browsing into the business that will help the company increase profits and improve its bottom line.


A successful online business transaction has so many variables — some technological, but most human, that make the process of conversion less than an exact science. Web metrics have gone some way towards providing answers for measurables like click-through rates, attrition rates, cost per acquisition and return-on-investment (ROI), but they tend to address the what of browsing behaviour, and not the why.

The understanding of real user behaviour on websites is often based on broad assumptions made from analytics and user feedback, or information from small usability testing groups that could never hope to replicate the nature and complexity of traffic coming to the site.

I often draw the analogy of trying to understand the myriad of ways that shoppers interact with a bricks and mortar shopping mall. Could one possibly track in which entrance they came, the paths they followed from store to store, where they window shopped, paused to interact with promotional material, looked at products they didn’t buy, the time they spent on each activity, money spent or frequency of return visits? It’s virtually impossible. The reality is that the number of permutations are endless, and this reality also applies to web shoppers in many instances.

We also need to understand that the more sophisticated and intangible your product and brand experience is, the more ways people will find to interact with it online. Fast moving consumer goods have simpler paths to conversion and higher conversion rates than products like training courses, retirement annuities or online legal advice. Your job as an online business architect is to understand the ways that your products, the interface and your audience work together most effectively, and optimise the entire experience to take advantage of that.

So what should you be thinking about when trying to understand your traffic and the way it converts online?

Measure with analytics

If you can’t measure it, you can’t manage it. Although many webmasters have analytics solutions in place, it’s often the reporting and interpretation of these analytics that don’t go far enough in adding any real business value. It is no longer enough to be looking at the number of visits, unique visitors, page impressions or form submissions.

With a little learning, Google Analytic’s (free) Advanced Segmentation tools allow you to dig deeper into user behaviour by segmenting user types based on diverse variables ranging from geographic location to entrance page. It’s easy to build up multiple segments and test these against your conversion events to see which user groups are your most profitable. Thinking about these groups allows you to take programmatic steps to recognise users from those groups when they enter your site, and direct them more swiftly to conversion scenarios.

Analytics can also tell you about bounce rates, page depth, time on the site and entrance and exit pages, all of which provide important clues to how users are engaging, or not engaging, with your content and products.

Another useful tool in Google Analytics is the Goals and Funnels feature. This allows you to configure up to ten pages in a defined conversion path through the site, as well as to assign a monetary value to the completion of each goal. The interface provides clear representations of attrition rates through page sequences and can assist greatly in optimising pages and also your calculations of cost per acquisition or ROI.

If you are running paid display or search campaigns, event and campaign tracking will give valuable insights into the performance of particular ads or creative executions and how they convert. You should be making retention decisions about these ads as your campaigns progress, but even if your team is not agile enough to juggle creative material quickly during shorter campaigns, the data can be analysed afterwards to optimise your next one.

Using and understanding analytics can be time consuming and resource intensive, but there is no doubt about the value these metrics can bring if they are used consistently in providing ongoing feedback into design and execution.[...]

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Dave Sifry’s success secrets

By Mandy de Waal


When it comes to Silicon Valley start-ups, Dave Sifry has been there, done that, and gotten quite a few T-shirts. He founded Technorati as a little science project in his basement, is the creator of Offbeat Guides, and was the brains behind Linuxcare.


A software entrepreneur who has spent over twenty years starting up Open Source and Web businesses, Sifry has built, managed, got funding and enjoyed huge success. He’s also experienced the lessons failure can bring. He spoke to Memeburn.com from San Francisco.

What’s the secret to raising VC funding?

Step 1: Build something fantastically great.

Step 2: Know how to explain it really easily. Practice. Practice. Practice.

Step 3: Build a great team, or have a great team ready to go.

Step 4: Get introduced to investors through trusted intermediaries if possible. If you don’t know any investors, try to get someone who does, get them excited and then let them introduce you.

How do you speak to potential investors?

This is counter-intuitive. When you are talking to a VC, if you are looking for money ask for advice, and if you are looking for advice ask for money. VCs are risk players. You are going for the big win, but you need to present a pretty clear understanding that the money part of it is secondary to the goal, and that you are teachable and are ready to listen to what the market has to say. I don’t think I have seen a successful business that hasn’t pivoted in the products they build, or the customers they have.

What do you ascribe success to? Luck? Competence? Skill?

Yes to all three. I think you have to start out by having a reasonable head on your shoulders. I’m living proof that you don’t have to be the smartest person in the world to be successful. But you do have to have an enormous amount of dedication and gumption. I love the word gumption, because it’s the get up and go that you need every day even when you don’t want to get up.

Success is the ability as well to successfully hold two contradictory ideas without going crazy. This first is that you are going to build something great that people will really love. The second is that you hold the idea your product is terrible, it never works the way it should, and that you have to listen to your customers and users how to fix it. This can drive an ordinary person crazy very quickly.

Then you need a humungous dollop of luck. This helps you get that big deal when you don’t have enough money to make payroll. If you have the gumption to face good and bad, and have a good head on your shoulders, you’ll be prepared when luck arrives.

Lastly, make integrity your golden rule. The core of this is to do what you say and say what you do.

Have you ever failed and what did you learn?

I fail at far more things than I succeed at. I have a litany of mistakes where I have banged my head against things. Mostly these are my own stupid mistakes. However I see failure as nature’s way of teaching you that you must move in a different direction.

What’s your advice to South African start-ups?

Ask your friends, colleagues and family for their advice before you start. This will help you to explain effectively what you do. If they tell you not to go for it, still go for it. Don’t let them hold you back. Take the risk. But listen to what they say, because they could give you valuable feedback on how you can improve things.

If you’re building an online business there are so many free tools and ways to effectively measure what you are going to do. If you don’t build effective measurements into your business you are really holding yourself back. From Google analytics to customer analytics that can continually test and iterate your ideas, there are a host of free or reasonably priced applications that could radically improve your business.

Start with yourself as the product manager and product user – it will give you a clear north star as to what you want to build the business around if you are the customer. If you are not building it with you as a customer make sure you know that business really, really well.

From the outside looking in, you may think the business or industry looks easy, but you may not know enough about the business, ecosystem or economics to build a successful business out of it. If you build a product and you are the customer, at least you’ve built something you really like and can use in the event that it is not successful.