Chitika has long been a fan of Dave Taylor, the tech guru behind AskDaveTaylor.com (among other sites). We’re very proud to introduce him as our first guest writer of the summer on the Chitika blog, answering the question “What numbers should I be tracking on my website?” Enjoy!
“There are two types of people in the online world, the 72.5345% of people who are convinced that the world is a measureable place, and the other bunch of folk who don’t try to add things up. If you’re reading the Chitika blog, you likely have at least a passing desire to keep track of how your advertising efforts are doing, so odds are good (so to speak!) that you are a quant. That’s a good thing.
If you’re not tracking statistics about your site, then you have no idea whether it has more readers than it did last month, what topics are most interesting to your reader community, and whether any of those people are actually clicking on your ads and generating some revenue for you. Yeah, you could just look at your Chitika report at the end of each month and see if it’s non-zero, but hopefully you’re a bit more involved than that.
The problem is that there are so many different numbers to track that it can be completely bewildering. I mean, what’s the difference between an “impression” and a “page view”? Are “unique IP addresses” the same as “unique visitors”? Even the Chitika reports have impressions, clicks, CTR, Avg CPC and eCPM. What is all this stuff?
Let’s start by talking about how a Web page is put together: it’s discrete files. The HTML text is one file, and each graphical element is another. A typical page probably has 15-30 graphical elements nowadays, so for purposes of discussion, let’s settle on 20. When you go to that page, you’re requesting 21 files: the HTML file and the 20 graphical files. Those 21 requests are called “hits”, and the HTML request is typically called either an “impression” or a “page view”. If you get 300 visitors to a specific page on your site, that’d mean you would have seen 6,300 (300*21) hits versus 300 page views. A popular site can easily deliver up millions — or tens of millions — of hits per month!
Now let’s say that on average, everyone who visits your site actually looks at 3.5 pages. Some people, of course, dig in and read 25 pages, while others see one and immediately pop away. Now those 300 visitors are actually accounting for 1,050 (300*3.5) page views or 22,050 (300*21*3.5) hits. Make sense? If you were to just count page views, you could fall into the trap of saying you had 1,050 readers, but that’s wrong. That’s how many pages you served up, but in fact you had 300 visitors. Since each computer on the Internet has a unique Internet Protocol (IP) address, if you were to look in your log files you would see that the people who read multiple pages are recorded as coming from the same IP again and again. Ergo, when you want to talk about the number of unique visitors to your site, you look at “unique IP addresses”, and generally it is the same as talking about unique visitors.
Advertisements like Chitika ads are a special situation because not only do you want to keep track of how often the ad is shown, but you also want to keep track of how often the viewer does the desired behavior (click on it). So the number of times it’s shown are the “impressions” in the Chitika report. How many times does the ad actually get clicked on? That’s “clicks” and the ratio of one to the other is the “click thru rate” or CTR. For example, let’s say that our site served up 1,050 ad impressions (since a user going from page to page will keep having the ads presented to them) and racked up 37 clicks. That means that it had a CTR of 0.035 (37/1050) or 3.5%. Pretty darn good, actually.
Now let’s further postulate that these 37 clicks earned you $6.39. That means that each click was worth $0.17 (6.39/37). That’s your average cost-per-click (“Avg CPC”, though it should really be called your value per click, but that’s another story). Many big advertisers like to sell ads on a cost-per-thousand-impressions basis (CPM, with the M standing for “mil”, Latin for thousand). In this scenario this is $6.08 eCPM (follow me here, that’s 6.39/1050*1000).
On my busy AskDaveTaylor.com site, I pay a lot of attention to my advertising performance. Truth be told, though, all I really look at is the CTR and the revenue figures. The CTR tells me how well the ads are performing, while the revenue tells me if I’ll be eating Top Ramen or a cedar-plank salmon filet for dinner. I hope this all help you make sense of the complicated world of Web and advertising traffic numbers!”
Dave Taylor has been online for 29 years now, and has been blogging since 2003. In addition to his Ask Dave Taylor tech support blog, Dave also writes film reviews at DaveOnFilm.com and explores parenting issues at AP Parenting.com. You can find him on Twitter, Facebook, MySpace, Friendfeed, etc etc, by starting at DaveTaylorOnline.com