Traffic analysis–why you should analyze traffic of your website?
 You can decide what you need to change in your site.
 You will able to know how visitors coming on your site
 You will Calculate your ROI if you are advertising with any PPC sites
 You will be able to know Path of visitors and most preferred path of visitors.
 You will decide which Keywords can work better for you and drive more targeted traffic for your site
 You will be able to know Percentage of visitors country wise
 You will be able to know top referral links
 You will know page load per visitors and Visitor to sales ratio and may improve it by changing appropriate changes in your site. changes in Title, Description etc..
 According to feature of every tools you will analyze like Size of file loaded in a day, no of Error pages etc..
There are various tools available for traffic analysis. various services like Stacounter,google-analytics,webstats4u,ritecounter etc…available for free to analyze your traffic
Stacounter:-http://www.statcounter.com/ Stacounter is one of the most popular counter. it is invisible! its alexa traffic rank is 122 this itself shows how popular it is. the service is totally free if your page load per month is 3,00,000 other vise you have to improve log size, initially its log size is 100 and you can upgrade your logsize..
Webstats4u:- http://www.webstats4u.com/ webstats4u is another popular counter but it is not invisible. everyone can view your stats. however they have added some nice features recently.
Google-analytics:-www.google.com/analytics/ recently Google launched its site tracking service named google-analytics.it is really nice service and free. I have no more experience but people says it is really nice accept its low speed! you have to first register your site with them using your Google account. then you have to paste a code on pages you want to alalyze.there are certain limitation for placing codes like you have to place the code immediately after the metatags and before Body!.
Then it will analyze your traffic. it is in Beta(Launched in Last December)
Rite counter:-ritecounter.com/ i have little experience with ritecounter.but I sometime shows weird results. Some visits can’t track.however they provide large log size.this is biggest binifit for this site There are other lots of Site tracking services. you can choose.
Webalizer:- you can Download it from-http://www.mrunix.net/webalizer/ you will be able to analyze your log file i am Happy with Their analysis. they says that “over 10,000 records can be processed in one second, through webalizer Please visit their page as i shown above. you Have to create a directory and install this program(source code). Installation Guide is written on their home page.
Awstats:- Like webalizer awstats is also a log file analyzer which you can install for your traffic analysis,There are some unique features are available which you will find only on Awstats. you can Download it from here>http://awstats.sourceforge.net/ its latest version released just on December 2005.with lots of improved features