How do you know you’re doing a good job, and how do you discover which areas need improving?

If you’re an employee, you can learn through performance reviews. If you run a publication, you can evaluate readership surveys or focus group studies. And if you’re a Webmaster, you can study Web analytics.

Web analytics is a way to measure and optimize Web site performance, says Jason Burby, director of Web analytics for ZAAZ, Inc. ZAAZ is a Web design and development firm in Seattle with a client base throughout the country.

Since Burby’s job is all about Web analytics, you would expect him to be gung-ho about it, and he is. On a personal basis, he likens Web analytics to using Evite (http://www.evite.com). This is a useful, free Web service that makes it easy to send out party and other invitations and, interestingly, track and optimize their success.

Along with sending out your invitation via e-mail, Evite lets you see who has viewed the message and who hasn’t, along with how many people have responded with a yes, no, or maybe. It can also prompt you to send a follow-up e-mail to those who haven’t responded by a certain number of days before the event or to phone those who haven’t viewed the invitation or responded to it.

In Web analytics parlance, Evite lets you track the performance of your invitations. It can increase your party’s "conversion rate"—that is, the percentage of people to whom you reach out who consequently show up.

Many Web sites have similar performance goals, particularly those used for business purposes. You may use your site for generating leads, selling products, or reducing costs. Regardless of whether your site is commercial or hobby-oriented, you typically want to encourage visitors to make their way to its various areas.

Web analytics can help you meet these goals by giving you insights on what visitors are doing at your site and whether they’re doing what you want them to do.

Many organizations have Web analytic tools, says Burby, but they may be hidden away in the IT department. Sometimes the tools are used merely to generate statistics, with the data not making it into the hands of those who can use it.

The two best-known commercial Web analytic tools are WebTrends (http://www.webtrends.com) and SiteCatalyst (http://www.omniture.com). Burby uses both.

The cost of using WebTrends or SiteCatalyst depends on the size of your site and how detailed you want the information, with fees ranging from $35 per month for small businesses to $150,000 or more for a Fortune 2000 company site license. Both products offer free trial periods.

Burby related an example of how he uses Web analytics to improve site performance. With a telecommunications company, he identified a key under-performing area of its site. The problem wasn’t getting visitors to the area; it was enticing them to follow through in enough numbers and purchase the service.

"We increased the conversion rate by improving both the description of the service and the call to action," he says.

There are also free Web analytic tools out there, but Burby feels they’re not as useful for optimizing site performance. Still, you can’t beat the price, and they can still be helpful as well as fun, I’ve found.

One such tool is StatCounter (http://www.statcounter.com), which is free provided that your site receives 9,000 page loads or fewer per day. Among other things the tool provides the number of your current unique and repeat visitors; data on your visitors’ browsers, monitor resolution, operating system, and country; and the search engine, keyword, and referring link they used to get to your site.

As beneficial as computerized Web analytic tools are, they’re no panacea. Among other things, they can’t measure ease of use, ability to communicate with the organization, brand awareness or reinforcement, or such bottom-line results as increase in sales, reduction in calls to your customer support center, cost savings, and return on investment.

"In my experience, many companies rely too heavily on tracking data to measure success," said Rick Alcantara, founder of Tara Communications (http://www.tarapr.com), an Internet marketing firm in Turnersville, N.J.

"I equate the over-reliance on tracking data to many firms’ tendencies to measure outputs rather than outcomes in their communication efforts," he says. "They measure how many brochures they distribute, media clips they generate, or registrations they garner. Instead, they should be measuring how well the site improves workflow, increases donations, enhances customer service, and so on."

In short, you shouldn’t neglect either the human factor or the bottom line.