Archive for April, 2008

The nice folks at Elastic Path asked me awhile back to give a presentation on web analytics for online retailers.  Their request made me realize I am still sitting on data I collected last Fall — a mistake I know but a function of the velocity at which Web Analytics Demystified, Inc. has grown in the past year.  To make up for this delay in some small way I will be sharing the data I collected from online retailers in a free webcast this coming Thursday.

If you’re an online retailer doing web analytics please consider spending an hour with us Thursday at 9:00 AM Pacific / Noon Eastern.  Among other things I will be covering:

• What the measurement landscape looks like for online retailers
• How satisfied online retailers are with their web analytics vendors
• How web analytics has impacted spend on paid search marketing

This last point I think many of you will find especially interesting.  Given Yahoo’s recent (re)entry into the web analytics market, and the assertion from Google that Google Analytics drives sites to spend more on search marketing, I set out to answer the question “Do you spend more on paid search marketing because of information gained via web analytics?”

Tune in Thursday morning to hear what I found out.

You can register now for free thanks to Elastic Path.  Talk to you Thursday!

Yahoo! just announced that it has acquired IndexTools. When I first heard about this deal I thought “Oh, that’s nice for Dennis and Dennis is a pretty nice guy so that’s nice … and the title of Director, Data Insights at Yahoo! is a pretty nice title.” But then I really stopped to consider what Yahoo! pushing IndexTools out to the world means to web analytics (Disclosure: I have been working on a white paper for IndexTools; unfortunately that work is on hold for the time being.)

While we have seen a lot of deals in the last two years, this one is potentially the permanent game changer.

Depending on the deployment model that Yahoo! uses to bring IndexTools to the masses, this acquisition may spell the beginning of the end for some folks who are pretty invested in the status quo. I was unfortunately forced to write this post well in advance of the announcement because of my travel schedule so I am sure I have missed some details but consider the following:

• Many people consider IndexTools to be every bit as good as far more expensive solutions, offering strong support for visitor segmentation, customization, marketing workflow management, advanced merchandising, and reporting that is far superior to that currently offered by other free and low-cost solutions. In fact, IndexTools is often referred to as “Omniture at a fraction of the cost” and having used both applications I’m hard pressed to disagree — everything you need to do “Enterprise” (sic) analytics is in IndexTools, without exception, and Dennis has shown an uncanny ability to roll new features into the product that directly address emerging market needs at the point they’re needed, not years ahead of time and certainly not years too late. For an excellent review of IndexTools see Eric Enge’s piece at Stone Temple Consulting.
• Prior to the acquisition, IndexTools was poised to release their own ad hoc segmentation and analysis engine, dubbed Rubix, that directly competes with the likes of Omniture Discover and similar high-end offerings. I have seen Rubix and my first reaction was “Oh man am I glad I left Visual Sciences when I did.” Dennis and his team have taken advantage of the work that Visual, Omniture, and others have done and essentially packaged it up in a much more user friendly and approachable way. The result is something that I believe a far greater number of analysts will be able to take advantage of, regardless of the price point, and something that other free and low-cost vendors simply have no response to today. Lars Johanssen of SATAMA and my very good friends Rene and Aurelie from LBi/OX2 have similar summaries of Rubix worth reading.
• Yahoo! will almost certainly be able to take advantage of the good work that Google has done establishing their Google Analytics Authorized Consultant (GAAC) network, giving Yahoo! an immediate deployment network (oh man do I hope they call it the “YAAC” Network!) Having run IndexTools on my own site for some time I very much expect that many GAAC partners will actually prefer IndexTools for most of their deployments given the dramatically improved capabilities of the application. Here is a list of companies I expect to call Dennis and the team at Yahoo! to inquire about how they can be YAAC partner.
• One of the things that people really like about Microsoft Gatineau is the inclusion of a small amount of demographic data available for segmentation. I like what Ian and his team have been doing, but I suspect that A) Yahoo! has access to very much the same data (only a whole lot more of it) and B) the existing segmentation capabilities in IndexTools, not to mention Rubix, will make that data a whole lot more useful to marketers. Imagine if you deployed IndexTools having real-time access to age, gender, income, and behavioral demographic data to apply to all the reports in your system, collected via Yahoo’s huge network, obfuscated, and presented properly showing sample sizes and statistical correlations. That would be cool, huh?

The net effect, again depending on the specific go to market strategy Yahoo! uses, is potentially a profound shift in the nature of the web analytics market today. Consider the following options Yahoo! has:

• Yahoo! can simply slap a big “Y!” on the IndexTools products and continue to sell them, perhaps through IndexTools and Yahoo’s existing partner network. The advantage of this option would be minimal interruption to IndexTools customers and it gives Y! a chance to migrate data collection and reporting technology from Europe to locations around the world. This would also give Y! time to look slowly at adoption and use of the product and think about their long-term strategy towards web analytics.
• Yahoo! can brand IndexTools and give away the E-Business edition while continuing to sell the Enterprise version, Rubix, etc. The advantage of this option would be driving adoption and taking some of the attention away from Google Analytics in a sane and measured way. This would also give Y! better data regarding the amount of effort really required to support a real web analytics application (because let me tell you, for most of us, it ain’t easy!)
• Yahoo! can slap the logo on and say “Come and get it, people!” giving away the whole hog to all comers. The advantage of this option would very likely be a high adoption rate (for IndexTools target audience, which is definitely different than the G.A. audience and more directly competitive with the likes of Omniture.) The disadvantage of this option is it has the potential to break IndexTools current architecture and could cause service interruptions which is something nobody wants, regardless of how much they pay for the service.

If it were up to me, I would select the second option, driving adoption and interest in the application while protecting IndexTools most valuable (Enterprise) customers at the same time. The second option would give Y! the greatest amount of information about the road ahead — to be sure there will be challenges — but would also give the company some much needed love.

Knowing some of the players involved, however, my money is on the first option. Nice and conservative, and basically exactly what Google did when they acquired Urchin. Despite what I’m sure is a strong desire on the part of Dennis and Yahoo! to have a tremendous impact on the marketplace around them, they say that “slow and steady wins the race” and that is probably more true today than ever before.

If Yahoo! chooses the third option immediately, or as Google did, waits six months and then goes to a totally free model, suddenly there are far fewer reasons to pay for web analytics at all. Even if they charge a nominal fee for more advanced functionality like Rubix, or force us to buy ads on Yahoo! a la Gatineau version 1.0 (which Microsoft has since put an end to, for good reason), I suspect there will be a profound disparity between what Yahoo! will charge and the CPM rates that most companies are paying today.

Wait, before you say “Yahoo! will never give IndexTools away for free … it would be too expensive” keep in mind that you said that about Google and Urchin.  My money is on free IndexTools before Christmas 2008.

While it is very easy for the top-tier of vendors to dismiss Google Analytics as “pretty, but basically inadequate” and “little more than an entry-level tool” the same claims cannot be used against IndexTools; consider again that many reviewers have said that IndexTools provides 80 percent of the functionality in Omniture at 20 percent of the price. If Yahoo! begins to provide 80 percent of the functionality in Omniture for NONE of the price, well, you get the gist …

If Yahoo! provides a low/no cost option for IndexTools, suddenly companies wanting to invest in web analytics will be far more likely to take advantage of the 10/20/70 rule for web analytics success I described over a year ago, focusing their efforts on people and process and worrying less about the technology used. Companies will be able to get their feet wet with Google Analytics and then, as the need arises, upgrade to IndexTools when they’ve mastered the basic processes and have hired the right people to move beyond basic reports and start to generate more complex analysis.

Obviously this acquisition is not without risks — Yahoo! could take too long to integrate IndexTools into their arsenal, the Microsoft/Yahoo! drama could play out in an unexpected way, and Google could respond by bringing Google Analytics dramatically up-market to be more competitive with Yahoo’s new position. Mitigating these risks are the fact that the team at Yahoo! is exceptionally bright (Bob Page, Michael Wexler, many others), any MSFT/YHOO drama will inevitably take years to play out, and if Google Analytics comes up market, well, then we have two truly great free or low-cost tools to choose from!

We have long talked about web analytics technology becoming a commodity, forcing a paradigm shift from the vendor-focused world that we live in today to the end-user focused world we truly need. Instead of asking “What tools should we use?” the conversation is now poised to become “How do we best use the data to drive our businesses strongly forward?” In a market where some vendors are still incredulously insisting that “web analytics is easy” I think this shift is long overdue and will be more than welcome by the majority of us practicing today.

Again, congratulations to Dennis, the team at IndexTools, and the acquisition team at Yahoo! I am very much looking forward to seeing how this announcement is received by the marketplace and how this change in the landscape benefits consultants and practitioners alike.

This past week I have been having a glorious time traipsing about Europe talking to some very, very nice people about web analytics. My week started in London at the largest Web Analytics Wednesday in history and progressed to Amsterdam, then Brussels, and now to Helsinki, Finland. As I begin to wind things down, finishing up in Finland tomorrow and heading back to London just prior to going home, I wanted to share some really great news!

It gives me great pleasure to meta-introduce you to the first baby to be born of a true “web analytics couple”: Lucca Dechamps Pols, due in late April to the very wonderful and talented Aurelie Pols and Rene Dechamps Otamendi from Belgium’s LBi/OX2!

Those of you who know Rene and Aurelie surely know how excited, proud, and a little bit stressed out both parents are right now. Since I love being a dad I spent part of my time in Belgium regaling the couple with stories about how much fun it is to be a parent. I’m sure they’d love to hear your encouragement as well, either via comments or directly!

This tremendous event comes hot on the heels of Rene and Aurelie selling OX2 to the well respected interactive agency, LBi. I was honored to meet the CEO and CFO of LBi and happy to hear that they’re both quite excited about the capabilities that Rene, Aurelie, and the entire team at OX2 bring to LBi. It will be quite a year for R/A learning the joys of parenthood amidst their earn-out period but I have great faith in both mom and dad!

Congratulations to you both and I’m excited to meet Lucca when I return to Europe in the Fall.

Matt Belkin of Omniture recently posted on a few of the pitfalls companies fall into when deploying web analytics. I was pretty surprised to see Matt, someone who was worked in this field nearly as long as I have, make the following statement:

“Analytics success is all about building a baseline for performance (your KPI trend), and trying new things to improve on this baseline. That’s it! That’s why I think it’s easy. I know other bloggers have argued that analytics is hard, but I’ve done this for a living and I can tell you that it’s not.”

Ironically enough I have been meeting many of Omniture’s largest customers recently, none of whom seem to think web analytics is easy. They universally have some difficulty associated with technology, people, or process—the triumvirate that is truly “web analytics”—and I suspect many of them had the same response I did when I read Matt’s statement above.

I quickly scribbled out the following response late last night but for some odd reason it has not been approved yet. I figured I’d post my comment here so that Matt and his customers would have a chance to read an opposing point of view.

“Hysterical! I talk to Omniture customers constantly who complain about how hard it is to do the most basic things like calculate bounce rate, integrate data using your Genesis platform, make sense of your reports, and even just get the data they need when they need it.

Perhaps the problem that you and people like Stephane Hammel are having with my statement is something called the echo chamber effect. You say something for so long, and your buddies all repeat it, that eventually you ignore the reality of the situation and begin to believe something that is clearly not true. Seth Godin accused me of doing this once (he was wrong, it turned out, people are deleting cookies … you’ve said so yourself!)

But you’re wrong, Matt. Web analytics is hard. Ask your customers, they’ll tell you.

It’s not just hard to improve your baselines, it’s hard to implement code properly, it’s hard to understand reports and definitions, it’s hard to find qualified staff to run these applications, it’s hard for HR to stomach the salaries we are asking for, it’s hard to train newbies, it’s hard to produce quality analysis based on only quantitative data, it’s hard to get management to listen, it’s hard to make management understand, it’s hard to select a good vendor when so many are failing, it’s hard to know if and when to migrate off of HBX, it’s hard to know which low hanging fruit to pick, …

You get the picture.

You make my point yourself in your post. If there are multiple versions of the truth, it’s hard to know who to trust. If there are multiple systems, it’s hard to know which system’s “click” is the right click to count. If you yourself have had to spend “countless hours trying to reconcile differences” in data, how is that “easy?”

In a way I’m happy you wrote this post because it reinforces everything I say when I travel the globe and meet with your biggest customers. They say “Our vendor says this is easy … there must be something we’re not getting.” I say, “Why would you expect your vendor to tell you that web analytics is hard? Would that make the sales process move forward more quickly? Would that make you more likely to buy their ever-expanding series of offerings? Would it make you think you won’t end up spending more money counting events, creating custom reports, or adding ad hoc segmentation tools?”

No. If you told the truth about web analytics, your prospects and customers would think twice about their investment. But that is exactly what companies need to do to be successful, really successful, with web analytics — take the science of audience measurement seriously!

When I say “web analytics is hard” I’m not saying that it is impossible, I’m not saying it’s not complex, I’m not saying that it is best left to the experts, and I’m not saying that companies should give up and go home. I’m saying that vendors, consultants, and customers should set their expectations regarding web analytics appropriately.

In my humble opinion, your customers need to know that web analytics is hard so they can:

1. Plan to spend a reasonable amount of time determining their needs
2. Allocate resources appropriately for implementation and deployment projects
3. Set expectations with management about when results will begin to appear and what will need to be done with those results
4. Make the case to management when they need additional resources, more software, or more time
5. Have an appropriate relationship with their vendor, based on clear expectations

When people are told that “web analytics is easy” they take their investment for granted. They expect that a “standard implementation” or something that comes from a cut-and-paste template will serve their needs, that a 0.25 FTE will be enough to produce analysis, that results will be available in a matter of days, that the software they have will solve all their problems, and that they won’t need their vendor’s support from time to time.

In a way it’s ironic that you say “web analytics is easy” given Omniture’s obvious commitment to their customer’s satisfaction — Larry Freed of ForeSee Results taught me that satisfaction is a function of expectation; when you say “I’ve done it, it’s easy brah” then as soon as they realize the truth, you’ve failed to set their expectation correctly and thusly they’re unsatisfied.

With the increasing numbers of your customers experimenting with less costly tools, I would think that customer satisfaction would be your #1 priority.

I doubt you’ll publish this comment and I suspect you’ll be pissed off at me (again) for voicing an alternative viewpoint but consider this: I’m not saying anything bad about Omniture or any of the companies you guys are buying. I think Omniture is a great organization full of incredible talent. I think the market position you’ve carved out is enviable. I think you guys have tremendous potential to advance the market, driving adoption of Web Analytics 2.0, Web Analytics 3.0, and beyond.

“Web analytics is hard” isn’t about any vendor technology or any one person. “Web analytics is hard” is about your customers and their ability to use your technology and your guidance to their greatest advantage.

When you say “web analytics is easy” you’re oversimplifying what is involved in being successful with web analytics. When you say “I’ve done [web analytics] for a living and I can tell you it’s not [hard]” you’re not paying attention to what your customers are going through. When you say “from your perspective, it’s just not that hard” you’re demonstrating your intelligence but not your wisdom. In fact, your statement “Analytics success is all about building a baseline for performance (your KPI trend), and trying new things to improve on this baseline. That’s it! That’s why I think it’s easy” really says it all.

Suffice to say I was bummed to see this hyperbole and tired rhetoric in an otherwise insightful post.

Sincerely,”

I think it’s one thing when people evangelize for free products as an easy-to-learn entry point into the market, and another entirely when one of the market leading vendors makes such bold and (in my opinion) unfortunately misleading statements.

Our collective ability to be successful depends on having clear expectations, not false ones, and our satisfaction is a function of our expectations. I think Matt is setting the wrong expectation with his comments. What do you think?

I’m happy to say that my full-length white paper on the Web Site Optimization Ecosystem is now available from the fine folks at ForeSee Results (registration required for download.) I’ve been talking about the Ecosystem as a component of Web Analytics 2.0 for quite some time now and I believe this white paper does a good job of outlining:

• The relationship between purely quantitative web analytics systems and more qualitative inputs such as those available via Voice of Customer (VOC) and Customer Experience Management (CEM) systems.
• The necessity for all three measurement systems to create a truly robust visitor analysis environment.
• The relationship between these measurement technologies and the “action” systems designed to support multivariate testing, behavioral targeting, and ultimately personalization.

Lee, Larry, and the entire team at ForeSee were great to work with on this document and I think some of the customer examples I discuss in the white paper are testament to the great work that companies are doing when combining web analytic and VOC data.

I hope you’ll take the time to register with ForeSee and read my work.