Web analytics software helps ecommerce operators understand what their online visitors are up to. Which search engine did the visitors come from? How long did they remain on the site? Which web pages did they exit the site from? And so forth.
Utilizing the data that web analytics packages provide can help an ecommerce operator improve his business. Understanding how the data is collected can help an operator understand web analytics.
“There are two ways in which web analytics packages collect data,” says John Marshall, President of ClickTracks, a web analytics provider. “Each method has its advantages and disadvantages. An ecommerce operator needs to understand each of them to follow how his particular analytics package works.”
The first approach, according to Marshall and other experts, is known as the “log file” method. This process refers to the trackingfiles that are routinely stored on a web host’s server. These files automatically record visitor behavior (such as time on site, pages visited, exit pages and much more). Hosting companies and webmasters use these files to manage storage and bandwidth issues. But, as Marshall points out, the log files can also be parsed and analyzed by software and the data produced by that software could help web site owners improve their businesses.
Kauffold agrees, however, that the log file method has its place and that some of the logfile data, such as exit pages and conversion percentages, is very reliable.
Complicating these privacy concerns is the use of “first party” cookies and “third party” cookies. First party cookies are set directly by the website itself. For example, if, say, MySite.com directly provides a cookie for, say, Bob’s web browser when Bob visits MySite.com, that cookie is a “first party” cookie. If, however, MySite.com hires an independent company who itself provides a cookie for Bob’s browser when Bob visits MySite.com, that cookie is called a “third party” cookie. In that instance, the independent company presumably saves the data collected by the cookie and, presumably, MySite.com has less control over that data. Third-party cookies, many experts conclude, protect visitors’ privacy less than first party cookies.
In any case, Marshall suggests that ecommerce firms at least understand some of the privacy questions.