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Installed software or hosted service
Most of the small business owners and have thought that, only the Web Analytics software can be used to install over their local machines. However, there are Web Analytics tools as well so that it can be directly placed on the tools and Web servers that are hosted outside the site. Most of the high-end vendors will offer both the hosted and server solutions.
Before buying any software, always try it.

Batched or real-time logos
Most of the marketing people tell that, closer to the real-time statistics that they will be able to get, the better will be their campaigns. However, in practice it has been found that the real-time stats will offer too much of variability in order to get more than that of general picture on how the things are doing. .

Standard Analytics
Whatever tool you would like to choose, include standard reports such as
Referrers
Pageviews
Unique visitors and/or visits
Authenticated users
Operating systems
Web browsers
Countries
Domains
Robots
HTTP errors
Entry and exit pages
You can also create the custom reports in order to get the analytics of some specific areas of your website or other customizations.

Tagging Web Pages
For the Web Analytics package, the common way to track put the page is to tag each page with unique identifier. The tag will enable the tool to have accurate information about every page, which is requested and displayed as well.

Tracking via Cookies
Setting a cookie on each customer coming to the site is another common tool for getting the good analytics. This will let the analytical tool to have accurate info regarding the browsers, which are visiting the website.
Scalability and flexibility
In web analytics tool, flexibility or customization is important. The more custom reports are generated, the more you will get out. However, keep in mind that, if you are able to create more reports from the raw logos, then they are harder to build in first place.

Support
If you want to get most out from the tool, you will have to find the tool that gives lots of support. This will be free as the paid or user groups or thought forums support is provided by the respective company.
It might be very much tempting to skip of the paying for initial support plans or installation, especially if have paid lot of solution already. Keep in mind that, the difficult period of adjustment of a new tool is during its installation.

Cost
It will be very much tempting to put up the cost initially in the list of criteria. However, if the business needs are defined from the analytic solution, then you might be able to find that the paid solution meets all of your needs and it is worth its value. Most of the solution available for free come with drawbacks around the scalability, support, flexibility or functionality. Whatever decision you take, remember to include the recurring costs as well.

If your business is totally dependent on the websites for generating revenues or more business, then it becomes extremely important for you to know exactly how everything is working and what your websites are doing. This means that you not only need to track your website but also measure the total effectiveness of your website. You can make use of either the spreadsheets or the log files for measuring the success of your website. There are software solutions available that integrate perfectly with your servers or some of the log analysis tool that come with the hosting packages.

It is a common thought by almost all the small business owners that the software installed on their local machines is the only solution they have for web analytics. But the fact is that there are tools which are hosted at the outside site and web analytics tool that are placed directly on your web servers. There are both the hosted as well as the server solutions available with each one having their own advantages. The main advantage of the server solutions being that they offer a greater flexibility and the hosted solutions are maintained outside or by someone else. You will need a solution on your web servers or for that matter hard drive if your main intention is to keep all your statistics a secret.

Whenever you select any web analytics tools it is very important that it should incorporate certain standard reports such as referrers, pageviews, visits and unique visits, HTTP errors, robots, entry as well as exit pages, countries, domains, operating systems, web browsers and authenticated users. Besides these standard reports there should also be an option wherein you can create your customised reports for getting the analytics of any specific area.

One of the most common methods adopted by any web analytics package to tack any web pages is to tag each and every page with a unique identifier. This way with the help of these tags the tools will have more accurate information about the pages that are being displayed and requested for. But for ensuring this you would need a tag assigned to each page. Another method of achieving good analytics would be by setting cookies for each customer that visits the site. This would enable the tools to have much better vision and information about the browsers that visit the site which would also include the unique visitors along with the information about the session lengths.

The two most important aspects of web analytics are flexibility and scalability. The more custom reports generated by you, the better for you as you will be able to generate and get more information out of it. In order to get maximum out of your tool, you should be able to find the one that is able to provide maximum support. The next important thing to be considered is the total cost that would be involved. To avoid any kind of problems later always remember to include recurring costs into your decision.