The Fatal Flaw Of Internet Business: Traffic -- Why We Need to Adjust What Constitutes Size And Value On The Web

There's something that needs to be made blatantly clear regarding the internet: One million unique visitors that spend less than one minute on a website and do not return is not really "traffic."

I hear so many companies (and you know who you are) that throw out these lofty, excitable "numbers," as if they're pulling in a large, coveted audience, but that is the equivalent of a million people driving by McDonald's every thirty days, taking a look, and not one going in to order a sandwich.

Just ask about session times and repeat visitors and the tune quickly shifts. It's one of the giant fallacies of "Web 2.0." Not only is it time that executives become aware of it, but for internet business overall to do something about it.

It starts with analytics. Numerous articles have been published stating that there is no one truly accurate analytics source online, and that common tools like Alexa and Compete are widely said to be flawed. Yet, somehow, we still hear countless executives, journalists, and especially bloggers cite them when making analysis. Worse, I can not recall a single article to date that has included a site's session times and repeat visitors though it's very important. It's not just about how many users, but what the they're doing, too.

On top of this, traffic can be, and is, engineered. Things like slideshows and other "strategies" can falsely increase numbers. Want to know how a site has a million unique visitors with less than a minute session time and no repeat returns? Here's your answer.

Technologies like video, RSS and Ajax can skew numbers even further.

But, perhaps far greater of a problem are our expectations. Advertisers, M&A, investors, etc., falsely believe that all sites should perform at MySpace levels, which is ludicrous. Not just because of the numerous flaws in current site analysis, but also because it is unrealistic. In the print media world, Time Magazine may have a million subscribers per month, but the top performer in the telecom niche is just 50,000. I don't believe it'll be any different with the web.

Niches online need to have their own benchmarks and be compared to them, not the big, general appeal sites that nab larger audiences. It puts unrealistic pressure on site owners, makes it difficult to attract revenue and drives the business of faking traffic.

The sooner we, as a whole, begin to understand this, the easier it will be to make money and do business online. It's already been reported by many sources that a number one hindrance to advertising dollars online are these kinds of flaws in the system, but few seem to talk or do anything about it.

The first step to fixing the problem? Awareness.

Comments

[dadw5boys]

You can lead a horse to water but you can't make him drink!!!!!

[Al4Music]

Very good point but things are looking up. There are other metrics that are currently measured and could be used but most choose not to. Companies that do tracking can tell a website owner where visitors came from (down to the zip code), how long they stayed, what pages they hit and how often they return. The problem is that websites would rather have potential advertisers see one big number rather than many smaller but more accurate numbers.

[doublebind]

Dear Al4...,
Would you mind revealing the names of some of these companies?

[Patricia Handschiegel - Huffpost Blogger]

Yes, I know. It's that most of the information sources (media, blogs), executives, etc. aren't aware of what constitutes traffic beyond the "hit," so many are falsely led to believe sites are performing better than they are.

I believe it's not just the fault of website owners but of the expectation of advertisers, lack of understanding, etc. in the industry as well. In my opinion, this all makes it harder to make money online, and not doing so hurts jobs, etc.

[Sundialsvc4]

Or to put it more simply: how much B-U-S-I-N-E-S-S are you doing? How many sales? What's the cost of goods sold? What's the overhead? Fixed and variable costs? Net profit? You know... all that "Business 1.0" boring stuff.

The web has some incredible characteristics: cost of distribution for product-information (and information-based product) is ... a big flat zero. But that's it. It doesn't change customer behavior, nor how they WANT TO behave.

It was an eye-opener to one of my early clients when she published a phone-number on the web site. Suddenly, it started getting called! A lot! Switched it to a fat toll-free number... more calls!! Was that, like, y'know, "a cost that ought to be curtailed 'cuz the Internet can do it 'better?'" Hell, no. It translated to "orders," and paying folks to answer that phone on the first ring was "more orders." The change was that customer agents spent much less time explaining and a lot more time taking orders.

So, real customer-behavior had not changed much: people wanted to browse on-line and then buy when talking to a real, live human being who answered on the first ring.

Did the Internet revolutionize that business, then? Absolutely yes.

[PurplePhase]

Kudos to Patricia Handschiegel for raising this salient and significant point.

I suspected long ago many sites are designed to force more clicks AND a longer session. One example is sites that divide their content into a large number of small pages. When I want to get to page 39 for instance, I can't type "39" anywhere, I have to click every 5 or 10 pages. Lo and behold, each page has a different ad. Imagine that. I learned one trick a long time ago, to change the page number in the address bar. This works for practically most sites. Another example is the increasing number of news sites that spread reports over 2 or 3 or more pages. One site had a story on Al Gore spread over 10 pages. Very little scrolling involved there but lots of clicking.

Forcing viewers and readers to navigate through more pages and be exposed to more ads is a double edged sword. The number of clicks is skewed and exaggerated but sponsors are more willing to accept the greater probability of exposure.

All in all, I agree that the advertising methods in conjunction with web design need serious overhauling.

If step 1 is awareness then the awareness would be most valuable among the sponsors because only they can force the changes by holding back their money.

[doublebind]

GREAT analysis!
QUESTION TO PATRICIA - Is anyone doing the kind of metrics you suggest? (Seems to me a several millions of dollars proposition, done or undone - if undone, patented/c­opywrited.­.."whateve­r.")

[Patricia Handschiegel - Huffpost Blogger]

Thank you! No, not that I know of but it's possible that it's a service with some larger analytics tracking company, like Comscore. It'd be a great start up if somebody did that by category and reported on it though! :)