Let us assume for a moment that your web site is a store. Not a piece of virtual property, but a real one. Standing behind counter, you notice where customers flow as they travel around your carefully constructed displays.
Taking note of this behavior, you decide to put latest special offers along most visited path through store. Each offer, of course, placed strategically alongside competing products.
Then, you sit back and watch, as visitors decide to stop and stare at displays, ignore them and walk off, or pick up a product and put it in their basket.
Very quickly, you learn which offers work, which do not, and which never even get seen.
Now translate this into virtual world. Your customers navigate by clicking on links. So, question is, do you know links being clicked? If not, you will miss out on sales, and hence profits.
One of most innovative schemes to date has to be Google AdSense project. It works so well because adverts presented match surrounding content.
Trapping which adverts are clicked, and which are not, will put you in a position to optimize presentation so that you maximize click-through ratio of each AdSense block.
This works in so many different ways that you could be multiplying your sales by simply reusing same techniques and wording presented by AdSense in rest of your site.