How To Calculate My Website Value?

How do you calculate the value of increased website performance?

  • For a pure media website, such as http://cnn.com or http://huffingtonpost.com, how do you place a quantitative value on increased website performance? For example, if a site initially has a load time of 11 seconds per page and has the opportunity to pay an CDN a X amount of dollars that guarantees the load time will drop to 5 seconds, what decrease in bounce rate/increase in traffic/change in some other quantifiable metric can be expected to justify the dollar investment?

  • Answer:

    If understand your question question right, you want a Cost Benefit Analysis for a web performance optimization project. I do not have any public real examples for this, but I am not even sure they would matter as they will vary by site and also by what the project entails! Two sites are not the same, even if they are in the same business. To run such analysis you need to look at what is impacting your revenues, current costs, costs associated with implementing the project, and any on-going costs (like CDN fees). Going from serving static content in house to serving from a CDN will be pretty straight forward, I am sure any CDN can share information with you on how similar sites calculate theirs. In this case you are just outsourcing part of the infrastructure, so you can analyze what your current cost for serving such content is (servers, datacenter, bandwidth, operators) and just compare the cost of serving from the CDN, plus the one-time cost of implementing it (this could be 0 depending on the platform you are using or built). You might see right there a benefit, without even looking at the revenue improvement. In the case the project is more complicated, than you would need to gather more data. Starting with revenue, and moving to cost. The primary source for any media business is Advertising. Therefore their major goal is to increase the number unique viewers and pageviews (media consumption). The larger the number of unique viewers (or reach) on the site, the wider variety of advertisements they can sell and the more campaigns they can accept. That said media sites might have secondary sources paid subscription models. This case is no different than selling products or lead generation site, you care about conversions. It is key that you build a baseline of metrics before the web performance optimization happens. It is also important to take in account any other activities in the company that could impact the numbers (advertising campaigns, partnerships, etc). The web analytics metrics to consider are: • Unique Visitors • Pageviews • Conversions (for paid subscriptions, email subscriptions, etc) • #pageviews/visit or Page/Visits - Happy visitors should consume more media, therefore this number needs to go up. • Time on Site - This metric is a little tricky, slow performance is included in this measurement - however if media consumption increases - you will see this number go up. • Time on Page -Important for embedded video content, as the more time spent on the screen the more ads can be displayed. In traditional web content this does not matter as the number of ads delivered does not increase as viewers spends more time on page. Of course for video content you would need to look at other metrics in addition to this one. • Bounce Rate • Exit Rate - Most people look at Bounces, but that is half the story. Visitors will be more likely to exit a site on a slow page - this will not count as a bounce, unless it was the first pageview. You can use this metric if you implement changes to only webpage (ideally the one that is the slowest and has the highest exit rate). • New Visits by Google - Search engines are a major contributor to website traffic. Since Google takes in account web performance in their ranking, you should see benefits (in theory) in your ranking. You should also consider looking at any SEO and or Adwords spend numbers to see if there was an impact. The cost calculations will be a little more tricky. As mentioned earlier an optimization activity could lower or increase the cost depending on what is being implemented. There will be fixed onetime costs, and variable costs that will be impacted. The major ones to look at: • Lower bandwidth utilization( keep in mind that as media consumptions increases, this increases). Moving to a CDN will lower bandwidth utilization tremendously! Implement GZIP will also improve it.  A lot of the techniques dealing with merging (sprites) or minifying will also decrease this cost. • Number of Servers. Depending on what optimizations are done there will be impact of the amount of servers required to serve content. Less requests to a server for a page, the more pages the server can server - the more users it can handle. However, more processing at the server would mean lower throughput. • Less Servers, means less datacenter space, etc. • There will be other things impacted and someone on the IT side will need to look carefully and list out these impacts and costs associated with them.   Hope this helps...

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Other answers

You want to look at the benefits from a top line perspective as well as a bottom line perspective.   Top line - How does site performance impact your business metrics such as: 1. bounce rate 2. Pages/visit 3. Time on site 4. Conversion rate 5. Finally, revenue? (or funnel value)   Bottom line - how does site performance impact your operations costs: 1. data center metrics (number of requests, number of bytes...) 2. Any impact on failover and load balancing? 3. Any help on making it easier for operations (automating or simplifying manual tasks)   FIguring out all the above is not easy. There are some good  writeups in the blogsphere on this topic such as Steve Souders(http://www.stevesouders.com/blog/2010/05/07/wpo-web-performance-optimization/). I also wrote on this a while ago at http://blog.yottaa.com/2010/11/secret-sauce-for-successful-web-site-web-performance-optimization-wpo/. But lots of these are anecdotes from other companies, and there aren't any good tools to help you do so. You very much have to do this on your own for your site.   On the other side, if you have done this study for your site, please do share your study results!

Coach Wei

A couple of months ago, I wrote a blog post describing how to use Google Analytics (or whatever analytics package you already use) and WebPagetest (http://www.webpagetest.org/) to perform a quick speed/revenue analysis of your current site, in order to get a sense of whether faster pages correlate to greater order value/revenue. The steps I outlined could easily be applied to your case, to measure page views, exits, and bounce rate. I recommend reading the post first to get the full rationale and to see the kinds of graphs you can generate: http://www.webperformancetoday.com/2011/02/02/speed-revenue-analysis-ecommerce-website/ Here are the steps:  1. Using Webpagetest, test your site’s speed on IE7 and IE8. Calculate the difference as a percentage. 2. Test your site (http://www.strangeloopnetworks.com/test-your-website) to see what performance gains you could gain from front-end performance enhancements. 3. Look into Google Analytics (or whatever analytics package you use) to find out your current page views, etc. for IE7 and IE8. 4. Use your analytics to find out your page views, etc. by connection speed. 5. Correlate the results in simple graphs, as demonstrated in my post. 6. Look at the performance gains from front end performance enhancements and determine what lift you anticipate in page views, etc. per visit. If you decide to do this, I'd love to find out the results, if you're willing to share them.

Joshua Bixby

We have a site where we ran a simple split test to find out. We ran 1/2 the traffic's images through an unreliable 3rd party host, and the other half we resized the images, optimized them, and served them through more reliable servers. As a result, we saw an increase of about 10% in our conversion rate.

Avishai Weiss

Two things come to mind for me: 1) abandonment - whatever the purpose of the website or app, humans will abort their attention and leave any latent experience.  Measuring session abandonment will give you an indicator of the cost and/or benefit of the optimizations you make. 2) guarantee - don't make one.  The value of performance optimization cannot be measured against a linear, objective scale for product quality (e.g. a toaster).  Instead, the value of performance optimization is derived from the impact on the subjective human experience.  Making a commitment to continually optimize the customer experience over-time (as the end-user population changes) is more meaningful than a hard-set guarantee. Good luck! -mt

Mark Tomlinson

I'm not sure i completely follow your example, but off the top of my head i'd think for a pure media website performance indicators could include: Time spent on site - benchmark against previous time periods Pages per visit Conversion rate based on content viewed - articles read Loyalty - repeat visit % Hope this helps.

Jay Patel

I don't know how conversion makes any sense unless its: 1) email subscriptions or downloads for email address 2) calls 3) purchases 4) sign ups I don't see how "articles viewed" is conversion--that seems like engagement at best.  I guess you could add "shares" or press coverage to the list--if those are micro-goal for a particular piece of content.

Nathan Ketsdever

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