People tend to say that in the web business traffic is the king. I always add, that if traffic is the king, so ROI is god.
People sometime looks at advertising as a way to drive millions of users to your web site. True, brand awareness is very important, but I will argue that in today competitive market, what you actually want is not just a lot of traffic but the right traffic.
I’ll give you an example from our life as a company. In the recent week we got great press coverage. From famous tech blogs such as Techcrunch and Read/Write web to the mainstream news sites like cnn, forbes and others. We got huge amount of traffic and more than 4000 beta requests in less than two days.
We use our own platform, NuConomy Studio, to track the different activities on our site. One of my favorites reports in the system is the one that shows you not just how much traffic you got from any referrer to your site, but which referrer contributes the most value to you.
In our case, we actually saw that the users that comes from Techcrunch were almost 5 times more value to us than the users that got to our site from the traditional media sites (which is fascinating fact when you consider that most people who register to our beta are in CXX or VP position in their companies).
Of course the big question is how do you define value?
In our case it was the combination of number of registration, request for information and actual acceptance into our beta program.
But every business has a very different kind of definition for value. If you are a blogging platform the most valuable users are probably the ones that wrote the posts that generated the highest number of views, comments, rating, shared and clicks on ads.
If you are an e-commerce site, value is probably the users that bought the most items, spend the most money, reviewed the most products, etc…
If you an advertiser, would you rather get (and pay) a million users click on your ad, or just two hundred thousands - but the right two hundred thousands?
If you are bidding for keywords on Google ads do you want to buy the ones that generated the most clicks or the ones that brought you the most valuable users?
I personally believe that the measurement of mare traffic is something that will slowly die. Advertisers will not be satisfied with the numbers of how much hits and uniques you have. They will want to know exactly what kind of audience are engaged in your site. They will want to know exactly what kind of ROI to expect when advertising in your site.