Internet advertising has become the primary tool for business promotion.

Unfortunately, internet advertising becomes more expensive every year. According to research, the cost of online advertising increases by an average of 10–15% annually, especially in highly competitive niches such as e-commerce, finance, and IT.

BUSINESS STE analytics How Google analytics works

Nevertheless, the main advantage of online advertising over offline advertising is that its effectiveness can be measured. You can know exactly how many people saw your ad, how many of them clicked on the ad, and most importantly, how many of them became your customers.

However, to get the most out of your investment in internet advertising, it is necessary to analyze the data correctly.

Google Analytics is one of the best free tools that helps businesses understand what’s happening with their advertising and website. It allows not only collecting data about user behavior but also identifying bottlenecks in advertising campaigns, optimizing conversions, and making informed marketing decisions.

In our practice at BUSINESS SITE, we often encounter clients who lose money due to a lack of analytics. For example, one client spent $800 on Facebook ads, but the site received only three inquiries. After implementing Google Analytics, we discovered that the ads led to the wrong landing page where visitors couldn’t find the necessary information. By fixing this, we increased conversions by 60% in just two weeks.

In this article, I will explain how Google Analytics works, what data it collects, and how this tool can help your business maximize its online promotion efforts.

How Google Analytics Works

Google Analytics is a tool that allows tracking and analyzing user behavior on your website. It operates by collecting data using a special tracking code and cookies. After collecting data, the information is processed, aggregated, and presented in reports. To better understand how this tool works, let’s examine the key elements: the tracking code, the role of cookies, and the concepts of “hits,” “events,” and “sessions.”

Tracking Code

The tracking code is a small piece of JavaScript that is added during the development of a website. This code is automatically generated in your Google Analytics account, and you need to insert it into your website’s HTML code (usually in the section).

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How does it work?

When a user visits your site, the tracking code activates and starts collecting data:

  • which page the user visited;
  • how much time they spent on the site;
  • which channel they used to reach your site (search engine, ads, social media, etc.);
  • which buttons, links, or interface elements they clicked on.

All collected data is sent to Google servers, where it is processed.

Once processed, the information becomes available in your Google Analytics account in the form of ready-made reports, including graphs, tables, and visualizations.

Example: You own an online store and want to understand how many people click on the “Buy” button. To do this, you can set up click tracking through Google Tag Manager (GTM), linked to your Google Analytics account. In GTM, you only need to specify the rule: “Track clicks on the button with ID ‘buy-button’” and send this information as an event to Google Analytics.

Benefits of using the tracking code:

  • Full control over data collection.
  • The ability to precisely track user actions (e.g., clicks on banners or form submissions).
  • Integration with other Google tools, such as Google Ads.

Cookies

Cookies are small text files that are stored in the user’s browser. They are a key element in Google Analytics’ functionality, as they help the tool identify who visited the site and associate all their actions.

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Why are cookies needed?

  • Identifying users. Cookies help determine if a user is a new visitor or a returning one.
  • Storing session data. Cookies save information about the current session, such as which pages the user has already visited.
  • Attributing traffic. Cookies remember where the user came from — through an ad, organic search, or a direct link.

Challenges and limitations of cookies:

  • Blocking third-party cookies. Modern browsers (Safari, Firefox) have started blocking third-party cookies for privacy reasons. This limits the amount of data collected.
  • GDPR and other laws. Data protection regulations require websites to ask users for consent to collect cookies.
How does GA4 address these limitations? GA4 relies less on cookies and works based on an event-driven approach (discussed further in Section 3). This allows the tool to continue tracking user actions even with minimal use of cookies.

Hits, Events, and Sessions

Google Analytics operates with several important concepts to describe user actions on the site.

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Hits

A hit is the basic unit of data in Google Analytics that records a specific user action. Examples of hits include:

  • pageview;
  • clicking a button or banner;
  • completing a transaction.

Every time a specific action occurs, it is recorded as a hit and sent to Google Analytics for processing.

Events

An event is a more detailed type of hit. If a hit records the fact of interaction, an event allows you to dive into the details. For example, instead of just “clicking a button,” you can define:

  • the button’s name (e.g., “Buy Now”);
  • the action’s category (e.g., “CTA Click”);
  • the event label (e.g., “Order Form Completion”).
Example: At BUSINESS SITE, we often set up events for clients to help them track not just the number of page visits but also specific steps leading to a conversion. For instance, for an online store, we set up the following events:
  • adding an item to the cart;
  • viewing the “Delivery” page;
  • completing the checkout process.

Sessions

A session aggregates all hits and events performed by a user during a single website visit. It begins at the moment of the first action (e.g., page load) and ends if the user is inactive for 30 minutes.

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Key points about sessions:

  • If a user leaves the site and returns after 31 minutes, a new session is created.
  • If the user returns to the site through a different source (e.g., first through an ad, then via organic search), it is also considered a new session.
Example of usage: If your website receives a large amount of traffic from contextual advertising, but conversions are low, session analysis can help identify the problem. For example, in one of our client’s campaigns, we discovered that users were leaving the site during the order form completion stage. By shortening the form to three required fields, we increased the number of completed sessions with conversions by 35%.
Google Analytics is built on three main elements: the tracking code, cookies, and data structure (hits, events, and sessions). Together, they provide accurate and detailed information about user behavior on your website. This data becomes the foundation for decision-making, from fixing website errors to optimizing marketing campaigns.

Key Metrics in Google Analytics

Google Analytics provides access to a wealth of data that helps businesses make informed decisions. Don’t get lost in the sea of numbers.

There are several metrics that are particularly important for evaluating the effectiveness of your website and advertising. These indicators allow you to measure campaign success and identify bottlenecks that need optimization.

Users and Sessions

Users are unique visitors to the website. Google Analytics identifies them using cookies stored in the user’s browser.

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A user can make several visits (sessions) but will remain unique as long as they don’t change devices or delete cookies. This helps to understand the actual reach of your website — how many unique people interact with your content.

New user.

If a person visits the site for the first time or from a device without stored cookies, they are identified as a new user.

Returning user.

If the person has visited the site before, Google Analytics recognizes them as a returning user.

The user report helps businesses evaluate how many unique individuals interact with their site.
For example, if you see a lot of new users, it may indicate good traffic acquisition, such as from Google Ads campaigns. If the percentage of returning users is high, it may suggest a loyal audience or active retargeting campaigns on social media.

A session is the sum of all actions a user takes during a single visit to the site. It begins with the first action (e.g., page load) and ends if:

  • The user is inactive for 30 minutes.
  • The user leaves the site.

Each session can include many interactions, such as page views, button clicks, form completions, or purchases.

Example: If a user visits your site in the morning, adds an item to their cart but leaves without completing the purchase, and then returns in the evening to complete the purchase, it is considered two sessions but one user.

Sessions help measure how actively the audience interacts with your site. If the number of sessions is high, but conversions are low, it signals the need to analyze and optimize the sales funnel.

Bounce Rate

The bounce rate indicates how many users leave the site after viewing only one page without performing any additional actions.

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Formula:

Bounce Rate = (Number of bounces / Total visits) × 100%.

If the bounce rate is high (e.g., more than 70%), it may indicate the following issues:

  • The page content does not meet visitor expectations.
  • Unclear or unattractive design.
  • Slow page load time.
  • Complicated navigation structure or lack of a clear call to action (CTA).
Example from practice: In one of our projects, launching ads on TikTok Ads, we noticed that the bounce rate for the landing page with the promotional offer was 85%. After analyzing with Google Analytics, it became clear that visitors couldn’t find the necessary information on the page due to text overload. We redesigned the page and added a clear CTA, reducing the bounce rate to 50%.

The bounce rate helps you understand how well the first point of contact with your site (usually a landing page) meets audience expectations. A high bounce rate is a signal to optimize the content, loading speed, or calls to action.

Key Events (Conversions)

Key events are the target actions a user performs on your site. In earlier versions of Google Analytics, they were called “conversions.” These events depend on your website goals and can vary widely:

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  • Purchasing a product. This is the main conversion for online stores.
  • Form submission. For example, registration, newsletter signup, or inquiry submission.
  • Downloading a file. This could be a PDF presentation, price list, or eBook.

Types of conversions in Google Analytics

  • Macro-conversions. These are the primary actions that bring direct benefit to the business, such as purchasing a product or ordering a service.
  • Micro-conversions. These are intermediate actions that lead the user to a macro-conversion, such as registering on the site, adding a product to the cart, or viewing the “Contact” page.

Setting goals for tracking key events

To track conversions in Google Analytics, you need to set goals. Example of setup:

  • Go to the “Admin” section → “Goals”.
  • Select the goal type, such as “Destination page”.
  • Specify the URL where the user should land to complete the goal (e.g., “Thank you for your order” page).
  • Save the settings and check how conversions are displayed in reports.
Example from practice: One of our clients offering educational courses complained about low sales. We set up conversion tracking and found that most users stopped at the registration stage. The problem was in a complicated form that required too much data. Simplifying the form increased conversions by 40% within a month.

Conversion Rate Metric

The conversion rate (CR) is calculated using the formula:

CR = (Number of conversions / Total number of sessions) × 100%.

Why it matters:

  • It allows you to assess the effectiveness of your website or marketing campaigns.
  • It helps identify weaknesses in the sales funnel.
  • It is a key indicator of profitability for many businesses.

Why are these metrics important for businesses?

  • Users and sessions help understand the audience scale and level of engagement.
  • Bounce rate shows how well your site performs its function.
  • Conversions are the ultimate goal and primary indicator of success.
These metrics work in combination. If the number of sessions is growing, but the conversion rate is falling, this signals problems with traffic quality or stages of the sales funnel. By analyzing this data, you can improve the effectiveness of your site, advertising campaigns, and ultimately increase your business revenue.

Conclusion

Google Analytics is an essential tool for those who want to make data-driven decisions. It provides detailed information about user behavior, allowing you to optimize your website and marketing campaigns.

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  1. Accurate user data

    The tool helps identify how many unique visitors come to your site, from which sources: SEO promotion, contextual advertising, social media, and how they interact with the content.

  2. Eliminating costs for ineffective advertising

    Google Analytics allows you to track ROI for each advertising channel. If you see that one of your campaigns has a high bounce rate (e.g., 70%), you can reallocate the budget to more effective channels.

  3. Website optimization

    Based on data analysis, you can identify problematic pages that lose users. For example, if the bounce rate on a landing page is 65%, this signals that the content or design needs improvement. Fixing such issues helps increase the time spent on the site and conversions.

  4. Tracking key metrics

    Among the most important indicators are sessions, users, conversions, and bounce rate. These metrics provide insight into how the audience interacts with the site.

  5. Flexible goal and event setup

    In Google Analytics, you can track any actions important to your business: button clicks, adding products to the cart, completing orders. This helps you see where issues arise in the sales funnel.

Recommendations from BUSINESS SITE for working with Google Analytics:

  • Regularly check key metrics such as conversions, traffic sources, and bounce rate.
  • Set goals and events that align with your business objectives.
  • Use UTM tags to analyze the effectiveness of advertising campaigns.
  • Switch to GA4 to leverage the advantages of event-driven analytics.
Working with data is a long-term strategy that requires attention and time but delivers measurable results.
Even at the initial stages of implementing analytics, you can identify “bottlenecks” and improve the efficiency of your website and advertising.