Analytics is about garnering useful information from the raw statistics that can be gathered about visitors and traffic. Like most data, the information it contains must be correctly interpreted in context to be of value and analytics is one way of doing that. While most webservers will come with some form of rudimentary analytics packages (webalog, analog etc) the server log files are mainly intended to be used by server administrators and provide information about performance and don’t provide much useful info for marketers.
Google Analytics, on the other hand, is a free-to-use and very powerful tool for understanding how visitors use your site, the most popular pages, bounce rates, entry & exit pages, keywords and what devices people use to access your site. When combined with Google Webmaster tools and an adwords account, Google Analytics can provide valuable insight about your site’s visitors.
Analytics are essential in setting benchmarks & evaluating the success of your online strategies. The measurements provided by analytics can be used to gain valuable insight into how your audience is responding to your PPC advertising, social marketing or content marketing strategies, helping inform your tactical decisions for the future.
Other, enterprise-level analytics tools are available for a price but these are only useful if you really know how to use them.