There is no single image format that is best for every situation. Photographs, screenshots, logos and transparent graphics have different requirements. Good web image optimization combines format selection, sensible dimensions and appropriate compression.
JPEG remains useful
JPEG is well suited to photographs and complex images. It uses lossy compression, so some information is discarded to reduce file size. At sensible quality settings, photographs can become much smaller while remaining visually good.
PNG has a specific strength
PNG is useful when lossless compression or transparency is important. Screenshots, simple graphics and images with sharp edges can benefit from it. A photographic PNG, however, may be unnecessarily large.
Why WebP is useful
WebP supports lossy and lossless compression and can handle transparency. It often produces compact web images, making it a practical choice for many sites. Conversion is not magic, though: starting from an already compressed file can introduce additional quality loss.
Dimensions matter
If an image is displayed at 900 pixels wide, shipping a 5000-pixel source is usually wasteful. Resize to a sensible display dimension first, then choose the quality setting. This often produces a bigger performance improvement than changing formats alone.
The Image Compressor & WebP Converter lets users compare original and output sizes while processing the selected image in the browser.
Inspect at real size
Do not judge an optimized image only at extreme zoom. Check it at approximately the size visitors will see. Look for blurred text, halos, blocky areas and damaged fine details.
Keep original sources
Never overwrite the only high-quality source of an important image with a compressed web copy. Store originals separately and regenerate optimized versions when needed.
Conclusion
Choose the format according to the image, resize it to a sensible dimension, compare quality at the final display size and keep the original. A smaller file is useful only when it still serves the visitor well.