Web site performance is a critical and underappreciated component of Web marketing and e-commerce.
It doesn't matter how well you design and market your site unless it delivers. An analysis of performance data from Keynote Systems and Symphoniq Corporation showed that performance problems could be costing almost $1 billion in lost e-commerce revenues.
Furthermore, a comparison of the statistics from these two companies reveals that the current standard of performance measurement, "synthetic" transaction monitoring, may be understating the impact of performance issues.
Synthetic transaction monitoring—the process of using scripted transactions to periodically simulate end-users performing business transactions, such as logging in, searching and purchasing—creates a false sense of security for leading online merchants.
The Magnitude of Soft Downtime
Downtime gets a lot of attention. As one of my clients commented, "My job is to keep our company's name out of the papers. When we go down, we make the front page of the Wall Street Journal."
Yet, despite the publicity that "hard" downtime receives, its impact may be dwarfed by the "soft" downtime of poor performance. Who hasn't abandoned a Web site because of slow page loads? Yet, according to standard measures of availability, those incidents don't count.
In 2001, Zona Research reported that 30% of surfers would abandon a Web site if it took more than eight seconds to load, creating the widely quoted "eight-second" standard.
Four years have cut that safety margin in half.
"The wait becomes frustrating for most Internet users after about four seconds," said Mark Ehr, an analyst with Enterprise Management Associates, according to an article in Internet Retailer. "Patience is waning as more shoppers become accustomed to quicker broadband connections."
Let's assume that 30% of surfers abandon a site that takes more than four seconds to load. This gives the following formula for the impact of site performance problems on revenues:
Impact = [(%Downtime) + 0.3*(%Page Load Times >4 seconds)] * Sales
To calculate the impact of performance problems, I turned to the abovementioned two companies that provide Web performance reports:
- Keynote Systems publishes weekly performance indices for various sectors, ranging from travel and hospitality to financial services. I looked at the following sectors, totaling 63 Web sites: travel and hospitality, broker, e-commerce, and news media.
- I also looked at site performance data collected by Symphoniq Corporation during the 2004 holiday shopping season. From Thanksgiving through December 26, Symphoniq audited the performance of 60 e-commerce Web sites, ranging from Alaska Airlines to Walmart.com.
I cross-referenced the two lists to generate a list of 25 common sites.
I began by looking at Keynote's measure of availability, which is considered the industry standard. Keynote uses a global network of reference sites that monitor Web sites using simulated user transactions. The performance indices studied measure availability from the 10 largest metropolitan areas in the United States. The average success rate for completing transactions across all those sectors was 98.59%, which means that the percent downtime was 1.41%.
