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Traffic Terms 101

Traffic Terms 101

May 3, 2002
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" while raw clicks can provide an indication of ad effectiveness, it's really the unique visitors that are important. "

As an Account Manager for a popular Webmaster affiliate program, one of my responsibilities is to monitor, develop, and trade traffic. As a part of this process, I am frequently confronted by a wide variety of terms, many of which are misused, and misunderstood. This article will try to make sense of the various ways in which traffic can be described.

What is "Traffic?"
Traffic (mistakenly called "hits" by many newbies) is defined as the amount and / or type of surfers that are now visiting your web page. "Hits" are server calls from your browser software requesting a specific file; so if your web page (1 hit to load) has 3 pictures (3 more hits) and 2 banners (2 more hits) a "hit counter" may show "6 hits" for what is really 1 'unique' visitor having 1 page view. If that surfer left your page and then returned, you'd have 1 unique visitor generating 12 hits (2 visits to your page) with 2 page views. Get it?

"Impressions" is another misused term, often referring to "page views" when in fact it should mean the number of times an advertisement was shown. In the example above, if both of the banners were identical, that single page view would have generated 2 banner impressions for a given sponsor. If the banners were different (not promoting the same sponsor), you would have 1 page view generating 1 banner impression for each of two sponsors.

Now let's look at 'raws' versus 'uniques.' If a surfer clicks a banner and visit's the sponsor, that is 1 'raw' click, which at this point equals 1 'unique' click (or visitor). If the surfer then leaves the sponsor's site, but for one reason or another clicks the banner again and returns, then those 2 'raw' clicks now still equal only 1 'unique' click, as they represent the actions of one individual surfer. While that one surfer can click away his to his heart's content, and generate 100 raw clicks (for example), he will still be only 1 'unique' visitor.

Sponsor programs use software that can distinguish between raw and unique clicks based on cookies or on referring IP addresses, among other ways, and while raw clicks can provide an indication of ad effectiveness, it's really the unique visitors that are important. This is why you rarely see 'raw' click programs anymore; besides the relative ease with which they may be cheated, unless you are an ad broker who delivers unique ads in response to clicks, the chances of selling a membership to a surfer decline with every visit.

Quality versus Quantity
When talking about traffic, we usually discuss its quantity, as in "I received 1,000 uniques today" or its quality: "I sent 824 'uniques' to my sponsor — with only 1 signup!" This second statement is an example of a conversion ratio, or the number of sales generated by the amount of traffic sent. The conversion ratio is 1:824 or 1 sale for every 824 unique visitors referred. If 2 sales had been made, this ratio would not be expressed as 2:824, but as 1:412.

First, a few assumptions; while I hesitate to say "on average" because so many factors can affect this ratio, most sponsors that I've talked to feel that converting at anything under 1:500 is "acceptable," with a ~1:350 ratio typical on the better converting site. What this means is that "on average" you should see at least 1 signup for every 500 legitimate surfers you send to your sponsor. If you don't, it's because you're sponsor isn't any good at his job — or you're not any good at yours (and maybe both)!

Is it really that simple; is there a mathematical formula that lets you measure success? While you can easily measure your sponsor's success at converting the prospects you send him into paying customers, predicting it for the future is more difficult, because what works one day may not work another. Sponsor problems, seasonal fluctuations, processing issues, and sunspots — in short, many factors beyond your control — can and will affect your future sales.

You can expect to see your conversion ratio become lower (worse) as the traffic you send to your sponsor increases, and as its quality decreases. But for our purposes, we'll set a "baseline" of >1:500. Compare this figure to your own stats, and see how the traffic you're sending compares to "the average."

When you examine your site's traffic, one of the most revealing statistics is the percentage of your traffic that you send to your sponsors. While many factors influence this, and it is another "average" figure, I like to use 3% as a "baseline" figure. This is the same figure quoted as an "acceptable" response rate for unsolicited direct mail and many other forms of advertising. It is just pure mathematics: on "average" 3 people out of 100 will be interested in your offer. As an aside, most banner ads alone will pull ~1% on a good day. This is why partial and full-page ads, consoles and text links are needed. All together, they will help you hit 3%.

Take a moment and consider all I've just said: if only 3 people out of 100 visit your sponsor, then 97 are sucking your content and burning your bandwidth. Furthermore, if your best sponsor is converting as well as 1:300 on your traffic, it would take ~10,000 unique visitors to your site to generate 1 sale!

I can hear some of you now, saying "She's full of shit! That's *impossible*!" What do YOU think about my statements? Click the link below and let me know! ~ Ayrora


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