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JupiterResearch Web Analytics Buyer’s Guide

Published by Eric T. Peterson on July 17, 2008 All posts from Eric T. Peterson

Many of you have probably already noticed this but John Lovett at JupiterResearch just released his “Web Analytics Buyer’s Guide: Assessing Vendors’ Competencies and Value” (requires registration.)  Having done one of these reports myself back in the day I want to congratulate John on publishing an amazingly detailed and insightful piece of work.  John has a blog post on the report that is worth reading titled “It’s not the Tools, It’s the Craftsman” which reminded me lyrics from the Phish song Bittersweet Motel:

“When the only tool you have is a hammer, everything looks like a nail, and your living at the bittersweet motel.”

Bittersweet is an apt assessment when it comes to producing this type of research as an analyst: non-vendor clients love the insights, vendors hate the comparisons, and all-in-all the results often fail to shed any truly new light on the market.  John should be complimented because despite publishing two somewhat poorly-resolved constellations, his work makes a few incredibly important points about the state of the market today.

I know that Stephane and Anil have already discussed the report, and nobody really asked me, but here are a few of my thoughts on John’s work.

If I’m Omniture, I’m not very happy about this constellation

Despite hundreds of millions of dollars of investment — including the acquisition of three of the company’s former rivals (WebSideStory, Visual Sciences, Instadia) and the roll up of Offermatica and TouchClarity — in the large Enterprise John’s assessment has Omniture in a three-way tie for “first” with Unica and Coremetrics.  Compared to my assessment in 2004 and Greg Dowling’s work in 2006 (published by David Daniels in February ’07), John’s work shows that Coremetrics and Unica are actually gaining ground on Omniture from a business value and market suitability perspective.

This is important because it reinforces both John’s central thesis and one of the most important caveats in all of web analytics: it’s not the tool that matters, it’s how you use it!  Omniture’s own consultants make this point when they remind us that we need to work hard to take advantage of the systems we already have in place, and the reality of the situation is that you’re not going to be any more successful with Omniture than any other application until you invest in people, process, and technology with a realistic and well-considered business strategy.

Don’t get me wrong, I think that Omniture has brilliant technology and are in a great position in the market today — if they manage to actually integrate analytics, testing, targeting, and bid management in a truly meaningful way they will solve a bunch of real-world problems.  But despite the hyperbole, hype, and braggidacio, Omniture’s competitors near universally have a similar opportunity and thusly I agree with Lovett’s asessment that there is no single market leader in web analytics today, Omniture or otherwise.

If I’m Coremetrics, I am pleased as punch!

Coremetrics is in a funny position in the web analytics market.  Despite all of their competitors declaring them “done” and “yesterday’s news” they continue to rank well in both the JupiterResearch ranking and the Forrester Wave.  Maybe the reason is that Coremetrics is actually still very competitive and able to provide the level of functionality and service that their clients are looking for at a competitive price.  Could that be it?

In fair disclosure, I do some work from time to time for Coremetrics and I really like their team, but given their recent deployment of Coremetrics Explore and the expansion of Coremetrics Connect, I think Lovett’s work validates the observation that the only real difference between Omniture and Coremetrics is their general approach towards marketing and sales, not their technology.

Furthermore, despite having been long considered a high-end solution with a substantial price tag, Coremetrics actually takes first place for overall business value in the SMB sector beating not only Omniture but also Google Analytics and IndexTools which are free!  I commented as much in the press release Coremetrics issued for this report, mostly because this type of market expansion is no mean feat given the quality of the competition.  And to be fair, Lovett’s business value dimension encompasses more than just cost and includes flexibility, scalability, usability, and feature sets.

If I’m WebTrends, I’m bummed out!

Living here in Portland, Oregon I am perhaps more acutely aware of the challenges facing WebTrends.  Last week they lost their CFO to another local firm, they already had to part ways with their VP of Client Services, Kory Kimball, who was only appointed in January of this year, and they are still looking for a replacement for Kathleen Brush who was brought in by Francisco Partners as an interim CMO.  Now, to be fair, these staffing issues are offset by the fact that they still have some pretty bright folks on the team, guys like Barry Parshall and Aaron Gray, but leadership in this marketplace has to come from the top and right now, the top is looking kind of thin.

My advice to Dan and the Board at WebTrends is basically this: get someone who knows web analytics inside and out in a senior position ASAP and get them out there talking about the company, products, and market in general.  On this point I disagree with my good friend Jeff who says that “business is business” and executives don’t necessarily have to be domain experts.  When I look at the market I see folks like John Pestana from Omniture, John Squire and John Payne at Coremetrics, Akin Arikan at Unica, Dennis Mortensen at IndexTools, Brett Crosby and even the great Avinash at Google out there evangelizing for both their products and the entire field of web analytics.

Call me old school, but I think the same key insight that it’s not the technology, it’s how you use it applies everywhere.  WebTrends is not going to be able to compete on a feature/function level because, according to John, the feature/function war is over and done.  The competitive differentiation is going to have to come from somewhere else … and historically that “somewhere else” has been guys like John Squire, Akin, Dennis, and Brett working their butts off to help people understand that despite web analytics being hard, great gains are possible when everyone is invested in being successful.

Surprise, surprise, I was right about IndexTools

When I broke the story about Yahoo! acquiring IndexTools and pointed out that most people who have seen both applications consider IndexTools to be every bit as good as Omniture, Omniture complained.  Brent Higgleke, their VP of Strategic Marketing, commented on Julien Coquet’s post about IndexTools:

“This move by Yahoo! was done to compete with Google. IndexTools does not compete “toe to toe” with Omniture. The majority of their customers are small businesses (80% of IndexTools customers are SMB according to CMS Watch.) This is great news for small businesses that use Yahoo advertising. However, mid-market and enterprise customers demand advanced functionality, deep domain expertise and specialized services.”

Sounds good Brent, except you’re basically wrong.  Don’t hate me, but I’m gonna recommend that people go with Lovett’s assessment instead:

“[IndexTools] provides a profoundly capable framework for advanced analysis and offers flexible segmentation built on the premise that segment creation is best facilitated through exploration of data.  Although currently available only through certified partners, the new free pricing model of IndexTools (a Yahoo! Service) makes it suitable for businesses of all sizes that seek a flexible interface and possess in-house staff looking for insights within data.”

The notion that IndexTools is somehow inappropriate for the large Enterprise, is feature poor, or is otherwise unworthy of consideration in an RFP process when available is just plain silly. John said as much in his blog post, commenting:

“It turns out that IndexTools does have nearly 80 percent of Omniture’s standard off-the-shelf functionality (77 percent to be exact).”

Now, I think we all wish that John would have published his list of “basic” and “advanced” features so we could better quantify the “missing 23%” in IndexTools.  My suspicion is that the gang at Yahoo! are pretty conscious of John’s assessment and working diligently on the next generation of IndexTools, much like the gang at Google did with Google Analytics.

So I will state again, Yahoo’s acquisition of IndexTools is a long-term game changer.  Yahoo! has still not given a time-line for making the application freely available to all, but an entire network of partners is already out there ramping companies up at a rumored rate of over 200 accounts per week!  Obviously if Yahoo! becomes so distracted with their current business problems and never releases IndexTools then my assessment will change, but everything I hear is that my Christmas 2008 prediction is more or less correct.

Despite proclamations otherwise, people still care about data accuracy

Avinash Kaushik is perhaps most loved for his exclamation, “The data quality sucks, get over it!” which to those of us tasked with explaining the unexplainable resonates like crazy.  The problem with “getting over it” is that those crazy wonks over in the business, and especially the gang in the corner offices, still want us to produce accurate reports that can be trusted over time.  If you’re not sure about this, go down the hall and tell your VP that the unique visitor counts you have been reporting all year may be off by as much as 30% in either direction, you’re not sure, and see what he or she says …

Uh huh.

Lovett’s report seems to validate that nobody is getting over it and that accuracy is still important, especially in the vendor selection process (number three factor, following “flexibity of reporting options” and “ability to service business needs”.)  I do disagree somewhat with John’s assessment regarding what to do about the problem, he seems to focus on the need for annotation capabilities in the product, but at the end of the day companies deploying web analytics solutions need to have defined business processes to account for tag coverage, data filtering, cookie deletion as well as a data collection validation process that is actually followed on an ongoing basis.

The next big battle will be about data integration

This is something that John and I have discussed on-and-off for some time, the idea that data integration capabilities are key as increasingly “internet marketing” is giving way to capital M “Marketing” (and, because of this, “web analytics” is likely to give way to capital A “Analytics.”)  In light of this observation, John seems to be predicting that web analytics vendors will continue to build out functionality to allow them to be more deeply integrated into the business, while at the same time the existing Enterprise analytics vendors will enter the digital market via acquisition.

Hmm.

I think the problem with this is that these strategies have largely been tried and, for the most part, have failed to produce expected results.  John predicts that web analytics vendors will build or acquire content management and relevance engines, which we have already seen with WebSideStory’s original acquisition of Atomz which included the Atomz Publish platform (among other examples, mostly CMS vendors building out analytics capabilities but Interwoven’s acquisition of Optimost is tangentially relevant I suppose.)  Same for Omniture’s acquisition of Offermatica and TouchClarity.

Now I suppose it’s too soon to say if Omniture will succeed with “Test and Target” but there is no case to be made for WebSideStory + Atomz Publish being successful.  Perhaps this was a problem of execution, but I rather believe that most true Enterprise shops either A) already have CMS in place or B) are unlikely to purchase CMS from a web analytics vendor given the otherwise complicated-but-entrenched landscape.  It does look like Omniture is still supporting Publish so perhaps they will get traction that WebSideStory did not.  Still, I’m not going to hold my breath, especially given the recent upgrades that Lyris has launched around their Lyris HQ product and the integration of ClickTracks, mostly targeted at the same SMB market and available at a tiny fraction of the Omniture’s price.

Similarly, the big Enterprise software players have all had the opportunity to invest in web analytics for years now and none have taken the plunge.  Oracle and others were widely known to be looking at the sector but the only thing that came of all that was A) Microsoft buying DeepMetrix (nee Gatineau nee AdCenter Analytics) and B) Oracle buying Moniforce which I’m not sure really counts.  In the meantime, SPSS has stopped supporting NetGenesis as of February 28th of this year and only SAS and Unica are still out there looking at deeper Enterprise integrations as far as I can tell.

Now, I have my own thoughts about the future of data integration and how web analytics will be levearged in business, but hopefully you’ll come see me talk at IMC 2008 in Vancouver when I talk about “Competing on Web Analytics” and hear what I have to say in person.

What, are you still reading this post?

In summary, for the three of you still reading this exceptionally long post, I think John has written a great report on the state of the industry and the vendor landscape.  Every JupiterResearch client reading this blog should read it and give John a call to discuss.  Or, you could come to the X Change conference in San Francisco and talk to John in person, or you could come see both of us at Shop.ORG in September and watch us fight like cats and dogs about which one of us is right about data integration.  Up to you.

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Categorized under General Web Analytics, Research, Vendors

  • http://blog.immeria.net Stéphane Hamel

    Great post Eric, and I agree with your assessment. The market continue to grow, but the pie slices are getting very different in size but also thicker. At least, that’s what I see from the market data I’m getting through WASP. I haven’t had the chance to read John’s full study, but if the focus was on web analytics in the traditional sense, I agree that the playing field is leveled. However, if we look at the whole suite of tools (and as you say, it’s about integration), then I see the opportunity shifting toward Omniture. But at least in region where I am, very few companies (none?!) are in a position to make good use of the whole suite anyway!

    Regarding staffing: In a mature market, you look for great CEOs and CFOs. In a evolving market, you look for visionaries and evangelists. I guess some companies get it better than others!

    Next battle about data integration? I thought you said it was about mobile? :)

    Or maybe it’s about integrating several sources of data, including mobile, voice of customer, performance and transactional data to get a handle on business analytics and business optimization. Break the “web” barrier and “compete on analytics”! But we’re going to walk on the turf of much bigger and tougher players that have been playing “business intelligence” for decades…

  • http://www.webanalyticsdemystified.com eric

    Stephane: Nice to hear from you! I’d love to see the data you have about “the opportunity shifting towards Omniture” and don’t doubt that WASP gives you interesting information!

    Data integration = the whole ball of wax, including the mobile opportunity. But I think, and I’m sure you’ll agree, that mobile is more of a skirmish in the measurement context given that the data is really not that different … data integration is the next big battle.

    I’m not sure if you’ve read my white paper on The Web Site Optimization Ecosystem but that is the precursor to all kinds of interesting possibilities for how we use the data (and the data we use.)

    I look forward to IMC where we can have the whole conversation (and again, I’m bummed you cannot join us at X Change.)

    Thanks for the comment!

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  • http://www.waomarketing.com/blog Jacques Warren

    The real gang to watch here is Unica. Remember if anyone was talking about them 12 months ago? With their awesome capacity in providing the almost whole picture of the multi-channel relationships companies are discovering they in fact have with their customers, they will kick the bejesus out of the big players in WA (and yes, WebTrends is still one of them).

    If you’re looking for me at X Change, I’ll be the one constantly pulling Akin Arikan’s sleeve.

  • http://www.analyticsevolution.com John Lovett

    Hi Eric, thanks for the thoughtful review of my report. Clearly your analytical chops developed during your time at JupiterResearch have been honed and sharpened…although your word count would never pass editorial review ;)

    The data integration/ownership battle, which I describe as something that’s brewing on the horizon, is a topic worth exploring. I think it’s interesting because everyone’s got an opinion but so few are diving in with executable tactics and strategies. One tangent this discussion usually takes is the suite vs. best-of-breed point solution argument, which you touched on briefly. While Jupiter data has yet to prove out that an integrated suite of products works across all organizations, it has merits for some. Yet, with many applications (e.g., email, site search), point solutions will win out the majority of the time and a data integration strategy is the best option to obtain a holistic view of performance. The bigger question in my mind is; Where does Web analytics begin and end in its ability to feed the needs of an enterprise? When integration enters the mix, I feel that the opportunity expands dramatically. I’m looking forward to investigating this topic further at X Change, where I will be leading a huddle on data integration.

    Thanks again for the review and praise and I encourage your readers to contact me to learn more.

    Cheers,
    John

  • http://www.whencanistop.com Alec Cochrane

    Data integration and Business Intelligence do seem to be the way that we are going forward. I have to say that whilst I see that we’d definitely want to do this, there are still two pools of thought on the best way to do it and nobody seems to have resolved it yet:

    1) You have an existing web analytics solution which you pull in all your other data

    2) You have an existing backend sytem that you try and pull your web analytics data into

    The issue seems to be whilst option 1 is becoming easier as we improve our WA tools, option 2 doesn’t seem to be evolving at all. Currently many companies will have big data resources in the background (CMS systems, data storage, customer details, price drivers, etc) and they want to be able to pull in the web analytics data into those systems rather than vice versa. There is too much information to put into the web analytics database from these big databases and too many privacy concerns.

    I suppose this comes back down to the accuracy thing again – until WA solutions become accurate enough it’ll never happen because the in house database people will want definite 1:1 matches (that may or may not exist).

    Then again, you need the staff to be able to analyse the data afterwards and maybe we’re not there yet either.

    Anyone have any insights into what is happening with Gatineau? It’s quite long in the tooth now and I haven’t seen any improvements for a while.

  • http://www.waomarketing.com/blog Jacques Warren

    John,

    There’s an excellent article about the suite vs best-of-breed discussion in the current issue of Journal of Business Intelligence (members only unfortunately). This is not a simple one indeed.

    Alec, I quite agree with you on the accuracy thing. In BI a client is a person (whereas in WA the equivalence is more often wishful thinking), but then again you often have primary key problems as for what is a customer throughout the various databases. Although BI is a more accurate world, it has its own accuracy problems. However, I find that that world has addressed, and is always very focused on the data quality questions. We can learn of lot from them, and maybe get to a point where Web data (or data from the Web) will have the necessary quality.

    We should not regard Avinash’s “The data quality sucks, get over it!” as a definitve judgement on the possibility to ever get to excellent Web data.

  • http://judah.webanalyticsdemystified.com Judah

    Jacques: Agreed about Unica. That’s why I’ve been using their solution across a large number of websites for the last 18 months, and why I agreed to help Akin with his excellent book (of course I like Akin enough to have helped him if he was a writing a cookbook).

    So who was talking about Unica 12 months ago? Moi! LOL!

    UNCA has a rather powerful WA solution that comes, for the most part, fully loaded and is deeply customizable with an extensible schema. Of course, like all the products, it has its warts. The company’s origin in marketing analytics (specifically, campaign segmentation and targeting and event/rule based detection and interaction) is pretty much unparalleled, especially when compared to the limited offerings for true marketing analytics integration across online/offline offered by either Omniture, Coremetrics, or Webtrends. Though from a perspective of “open” data integration at the visitor level, WebTrends has made strides (thanks to Greg Drew’s leadership), but the product suite is still too heavily focused on Microsoft, imho.

    Alec: You have to do both. And the model for doing option 2 should be based around an enterprise data warehouse and master data management. Option 1 requires, imho, an open relational db in the backend. The idea floating around about unifying a data model from email, ad serving, web analytics, behavioral targeting, multivariate testing, bid management, offline, and web interaction optimization, looks great on paper, but I remain unconvinced that outsourcing all that to a SaaS makes sense (privacy concerns, cost, risk), and I remained unconvinced most companies could pull it off internally (lack of resources, sr mgmt that gets this stuff, or ability to justify the ROI for doing so).

    John: Good job on the report! I plan to digest it this weekend. Nice seeing you on Wednesday.

    Eric: Good post, dude!

    Judah

  • http://www.lyrishq.com Blaine Mathieu, CMO, Lyris Inc.

    Great analysis! I definitely believe that analytics companies with old-fashioned volume-based business models will find themselves under incredible pressure in the next 12 months. That pressure will come from both the “actually free” solutions (Yahoo, Google) as well as the “effectively free” solutions (Lyris HQ) where analytics is included at no extra cost in a wider solution. Hang on – the engines of disruption are revving and it’s going to be a wild ride!

    Blaine Mathieu
    CMO, Lyris Inc.

  • http://www.webanalyticsdemystified.com eric

    Jacques and Judah: This is a story I keep hearing again and again, about Unica. And yeah Judah, I know … I know. When I heard that Unica displaced Omniture at a ** major ** account I had to ask myself “what is going on here?” So yeah, I think Unica is a sleeper to watch in 2008 and 2009 to be sure.

    Alas, Akin pulled “booth duty” at SES, something I totally do not understand, and cannot join us at X Change. Fortunately he will be in town for the Web Analytics Wednesday right after X Change on August 19th and we can pester him with questions then.

    And Jacques, yeah, that whole “data quality sucks” got filed away with “web analytics is easy” and “the Earth is flat” in my book. Sounds good enough until you actually test the idea, and then you realize something is pretty wrong. Oh well.

    John: You made me blush, thanks, and yeah not having a word count limitation is pretty nice. LOL! Re: data integration — why do you think I asked you to lead a huddle on the topic at the X Change? I think that will be a great huddle and I’m personally looking forward to it!

    Again, great work on the report. It is making a lot of folks question their assumptions which is fantastic!

    Alec: While I’m not able to discuss specifics, I think there are some back-end data integration offerings in the works that are pretty impressive. And while I do agree that accuracy is more important than some people clearly believe, I’m not sure 1:1 accuracy is the mandate outside of sales reconciliation given the sample data that marketers have been working from for so long.

    Suffice to say, changes are coming.

    Blaine: Thanks for the comment! I agree with you that the winds of change are blowing but at the same time, given John’s finding that nearly 70% of companies report being satisfied with their solution bodes well for the market leaders, at least for the time being. One clear disadvantage that free or nearly free solutions have is that nobody really follows Kaushik’s 10/90 rule — most companies I find un- or under-investing in web analytics technology basically staff at $0 or nearly so as well. As long as staffing and process remain an issue, the current solution is likely the best solution.

    Conversely, a good analyst dedicated to the project can do an awful lot with Google Analytics and will be able to do even more with IndexTools (and perhaps ClickTrack as well!) Again, as John said, it’s not the tool, it’s how you use it.

    Thanks to everyone who has commented, emailed, and Twittered me about this post. Since I don’t spend as much time blogging as some of my peers it’s nice to know that a few of you are still out there listening when I do pipe up.

  • http://UnicaWebAnalytics.com Akin Arikan / Unica

    Hi Eric, Jacques, and Judah,

    Unica and I are much honered for the kind words. Needless to say we are extremely excited about both the most recent Jupiter constellation and the Forrester Wave that came out a year ago. This kind of progress hasn’t been coming easy. A ton of colleagues are working hard behind the scenes. And our web analytics customers have been generous with feedback, support, and guidance.

    Re Alec’s comment about integrating Web analytics data into other (BI / CRM / Marketing) systems. I don’t want to make this a commercial, but that has been a sweet spot for Unica’s offering in the past and we are working to make that more plug & play all the time.

    As you know, we have our own angle on where web analytics should be going over the coming years. Namely, it shouldn’t confine itself to aggregate level insights for improving web site and online ads. But it is the most awesome pool of behavioral data on customer preferences on Earth. How to put that data to use for better customer service and more relevant marketing communications across multiple channels, is top of our minds.

    Thanks too for challenging me in regards to Xchange. Without wanting to go into details, the stars seem to be aligning such that I will after all have the great honor of attending part of the time. Very excited to meet this crowd there and share your view points.

    Akin

  • http://www.hurolinan.com Hurol Inan

    Hi Eric,

    Thanks for sharing your thoughts. I can report from the fields that it is spot on!

    For the last 12 months or so, the conversations we have been having with our clients is mostly about integration. To achieve this you need a solution that is open at the data layer and you can easily append data from other sources.

    Within the context of multi-channel marketing which is what the large end of the town is rightfully aspiring to do, this also presents interesting challenges such as where the data should be housed as the behavioural data captured by WA solutions is only one aspect of the full solution. There is also campaign history, product holdings & purchasing history, demographics data, etc.

    This obviously plays to the favour of the vendors such as SAS CXA and Unica NetInsights.

    I also agree with your comment that this is not about a solution. It is about what you can do with the behavioural data. A sensible starting point for many could be developing a series of scenarious how the behavioural data could be used and then technology enabling these initiatives as opposed to comparing the vendor products based on function points.

    Cheers

    Hurol

  • http://www.webanalyticsdemystified.com eric

    Akin: It is excellent to hear you’ll be able to join us at the X Change, even if only for a single day! I look forward to catching up with you!

    Hurol: Great to hear from you! Thanks for your feedback and further validation of John’s work and my commentary. It will certainly be interesting to see how all of this plays out through the balance of the decade.

    Thanks to both of you distinguished gentlemen for your comments!

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