By: AllBusiness.com

Understanding your Web site traffic will help you improve your site's usability. More important, traffic data can improve your site's revenue-generating potential by telling you what kind of ads will work best on your site.

If you have ads on your site that are under your control (in other words, not Google Adsense, AdBrite, or other off-server ads), you can set pricing and content requirements as you see fit. Crunching the numbers on your traffic data will increase your understanding of how your users interact with your site, where they're coming from, and what search terms they're using to find you.

Potential advertisers will want to see traffic data. If your traffic data is telling you that 34 percent of your users are coming from a specific region, you can use that information to focus your ad sales efforts on businesses in that region. Understanding your search terms not only gives you a sense of how well your search engine optimization (SEO) efforts are working, it's further proof to advertisers that you're getting what amounts to prequalified sales leads.

Most advertising deals are dependent upon being able to guarantee a given amount of exposure, so knowing your traffic numbers can give you an advantage in negotiating advertising rates. Most traffic monitoring software tells you which URLs and IPs are sending you traffic. You can take that information to sites you want to link with and point out to them how an arrangement would be to your mutual benefit.

One note of caution in all of this: be careful who you give traffic data to and how much you give them. You don't want to compromise your users' privacy by selling their e-mail addresses unless they provide their explicit consent. Likewise, don't give away any information that might be of value to a competitor. That means knowing who you're talking to when you disclose traffic data. Similarly, don't undermine your position by giving traffic data that speaks of any weaknesses in your site. For example, you don't want to brag that you get 30 visitors a day if you're trying to establish a deal, even if those 30 people spend an average of 40 minutes on your site and each generates 300 clicks (not likely, but possible). Always look for the best reflection of your site.

Whatever you end up doing with your traffic data, keep an eye on it and learn the patterns so that you can pick up on anomalies, both good and bad. Traffic data is a goldmine of insight. Use it to your advantage at every opportunity.

Google offers a site analytics tool that is available for free to publishers, advertisers, and site owners. Visit the Google Analytics site for more information. Also check out Use Ads to Monetize Your Web Site for some good advice.

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