I was speaking with a new prospective client a few days ago, and started to describe our new Creative Analytics product. Have way through my monologue, he put up his hand and asked me to define Web Analytics. Whoops ...

Web analytics is the measurement, collection, analysis and reporting of internet data to better understand and optimize web usage.This includes websites, email camapigns, newsletter marketing, etc., so web analytics is not just a tool for measuring web traffic but can be used as a tool for business research and market research, and to assess and improve the effectiveness of a web site.

Web analytics applications can also help measure the results of traditional print advertising campaigns. It helps one to estimate how traffic to a website changes after the launch of a new advertising campaign. Web analytics provides information about the number of visitors to a website and the number of page views. It helps gauge traffic and popularity trends which is useful for market research.

There are two categories of web analytics:

  1. Off-site web analytics refers to web measurement and analysis regardless of whether you own or maintain a website. It includes the measurement of a website's potential audience (opportunity), share of voice (visibility), and buzz (comments) that is happening on the Internet as a whole.
  2. On-site web analytics measure a visitor's journey once on your website. This includes its drivers and conversions; for example, which landing pages encourage people to make a purchase. On-site web analytics measures the performance of your website in a commercial context. This data is typically compared against key performance indicators for performance, and used to improve a web site or marketing campaign's audience response.

Disclosure: This content borrows heavily from wikipedia.