Say you are getting 1000 visitors a day to your site, but don’t know where it’s coming from. You will spend time doing very general updates to your website, or nothing at all. If you knew that 800 of those visitors were coming to the section about widgets, you might spend the bulk of your time finding partners that sell those widgets.

You then look at how people are getting there. Is it from a search engine? Is it from some article you wrote. Maybe the traffic is because you had a few people Digg your article, and then a few more did. This traffic isn’t going to last forever. You need to repeat what you did in that scenario, and do it again and again.

If it’s all coming from one search term at google, you have to figure out where you’re ranking at, and what’s your next step. Say you are ranking number 1 for blue widgets, and that is sending you 100 visitors a month. You need to make sure you stay in that position by doing some SEO. If you are ranking number 3 for red widgets, and getting 120 visitors a month, figure out if you can move up in rank. That is a bigger opportunity than optimizing for blue widgets.

This is a very basic example of Analytics usage, for a very small website. There are a number of tools that help in all different sorts of ways. With all the opportunity for traffic optimization on your website, the good webmaster utilizes the tools available to focus on the best return on their valuable time.