Web Analytics Wednesday in San Francisco this week was an amazing success by every conceivable measure. But don’t take my word for it, here are the metrics and key performance indicators:

• Budget for the event: $10,000.00
• Actual amount spent: $14,500.00
• Percent over budget: 31%
• Percent extra expenses graciously covered by ForeSee Results and Tealeaf: 100%
• Planned number of sponsors: 4
• Actual number of sponsors: 5
• Percent sponsors interested in this event: 120%
• Estimated satisfaction of sponsors based on feedback sample: 100%
• Projected number of attendees: 200
• Projected expenditure per attendee: $50.00
• Actual number of attendees: 400
• Actual expenditure per attendee: $36.25
• Percent of actual budget spent on drinks: 50%
• Estimated number of drinks served: 1,450
• Estimated number of drinks consumed per attendee: 3.6
• Number of hours spent serving drinks: 1.5
• Estimated number of drinks consumed per hour:996
• Estimated number of drinks consumed per hour per person: 2.4

I think the key measure of success is really satisfaction but I totally forgot to ask Larry Freed’s folks at ForeSee Results to conduct a survey during the event, we weren’t tagged with Coremetrics tags, and SiteSpect wasn’t able to test due to incredibly cramped conditions so we’ll have to rely on your comments and June’s pictures for the time being to make that determination. Maybe someone will post Tealeaf-esque replay video so we can estimate satisfaction based on qualitative data…

Speaking of the sponsors, I really want to thank all five sponsors of the event for their participation, willingness to help out, and excellent attitude … especially when the crowd volume prevented them from getting a word in edgewise during their 15 seconds of fame.

Suffice to say we could not have thrown a party like this without the help of these fine organizations.

I was also really pleased to see some of our industry thought-leaders out for the event, folks like Gary Angel, Jim Sterne, Larry, Judah Phillips, Brett Crosby, and Avinash Kaushik who has never attended Web Analytics Wednesday as far as I know but who just joined Google full-time, eschewing independent consulting for good old-fashioned job stability — congratulations Avinash and congratulations Google!

I was even more pleased to see many members of the Web Analytics Board of Directors at the show including Jim, June, Avinash, Bryan Induni, April Wilson, Richard Foley and probably a few more I am forgetting. I think this is great since the WAA has what can only be described as an estranged relationship with Web Analytics Wednesday … hopefully we can get that relationship worked out in 2008 so these two great organizations can work together for the benefit of our entire community!

Anyway, thanks to June, David Rogers, and all the volunteers and sponsors who made this great event happen. Mr. Sterne hinted that he’d like Web Analytics Wednesday to happen concurrently with every Emetrics conference around the world so hopefully we can work that out and take this great party on the road.

Because I have finally, after much goading, joined the Twitter generation. It took Aaron Gray from WebTrends and like 11 beers (which I felt this morning, mind you) after a very successful Web Analytics Wednesday event here in Portland to get me to join Twitter. Hell, I didn’t even join after meeting Biz Stone and boating around Rotterdam with him last summer (sorry Biz!) But Aaron made me wonder who Twitter streams might be used in the engagement calculation so like a cat to milk I went running.

Incidentally I did not say “Twitter has no value” or at least I don’t think I said that.  I suspect there was some qualification involved (although see my above comment about 11 beers … sheesh!)

Thanks Aaron. Yet another excuse to play with my iPhone, not my kids. You rule.

Want to follow me? I’m easy to find!

Last Wednesday I had the honor and pleasure of helping break the story about Yahoo’s acquisition of IndexTools. My post was pretty well received, generating over 40 comments and a handful of citations in the popular press. In that post I speculated two things:

1. That Yahoo! would offer IndexTools at no charge by Christmas 2008
2. That this acquisition was potentially a permanent game changer

This morning Dennis Mortensen sent me an email with the following message:

“your predictions was not that far off!
:-)”

At his blog Dennis announced that Yahoo! was now waiving all fees for current clients, essentially making IndexTools free. Dennis also announced that current IndexTools partners would be able to deploy new IndexTools implementations free of charge. Finally, Dennis commented that for the time being IndexTools would be closed to new customers, giving Yahoo! a chance to determine what their next move would be.

Christmas, Tax day, whatever. Free is free.

While I am already on record as believing that Yahoo made an excellent strategic move in acquiring IndexTools, the “make it free now” decision is absolutely freaking brilliant and the guys who pulled the trigger deserve a medal.

In one fell swoop, Yahoo! and IndexTools:

1. Assuage all of the fears of current customers regarding the transition, any hiccups, etc. by offering the best possible olive branch in the world: free stuff! Worried about the transition? Okay, don’t pay us. Concerned about your data? Okay, don’t pay us. Don’t like Yahoo! that much? Okay, don’t pay us.
2. Create instant demand for the product, and an instant revenue stream to the few companies that have been loyal to IndexTools all along. Imagine your glee if you woke up this morning and learned that you’re part of a limited channel able to offer IndexTools at no charge to your clients? I know I’d be pretty happy!
3. Serve notice to your competitors, whoever those competitors are, that you are not messing around and they need to get their act together quick. Regardless of what Google says (or rather, has not said) and what Omniture says, IndexTools directly competes for both of their business (and everyone else in the sector to be sure.)

This third point is important, and it speaks directly to why I think this acquisition changes our market more or less forever. So far the team at Google Analytics has been eerily silent — or if they have spoken I have missed their comments — but I have already talked to multiple people who have basically said, “It’s a no brainer, I’ll deploy IndexTools and either run Google Analytics for validation or drop GA entirely.” More importantly, I’m talking to some pretty bright consultants that are chomping at the bit to get away from having to make excuses and write hacks to make Google Analytics do stuff it is not designed to do (screen scraping, really?!) and use a more full-featured application.

It’s not that Google cares all that much I suspect; rather I think they’re more than happy to have a real competitor in the free market, especially one that offers a logical “step up” from the basic functionality that Google Analytics has to offer. I won’t be surprised at all if Brett Crosby publicly welcomes Yahoo! (back) into the web analytics arena in the same way he welcomed Microsoft to the game last year at Emetrics. I’ll be less surprised if Google’s Analytics Evangelist has a happy post about IndexTools sometime this week, especially given his historical evangelism for IndexTools and professed respect for Mr. Mortensen.

The real challenge I see on the horizon is for the paid service providers, especially those focusing largely on the mid- to higher-end of the market (which is to say everyone.)

Consider the following:

1. Like it or not, IndexTools is pretty much as good as most of the best analytics offerings out there today. It may not be as pretty, it may not be as “AJAX-y”, it may not be as fast, but this is an offering that goes toe-to-toe with the “mass market” analytics offerings from all the major vendors and in my opinion is every bit as good. Why would I say that? Simple, I have been running IndexTools on my web site for the past six months. IndexTools is not easy, but it is no more complicated than anything else out there (IMHO.) If you look around at comments and what some people are saying you’ll head the same thing over and over: Companies of all sizes have been selecting IndexTools for years based on rich, comparative functionality made available at an affordable price point. IndexTools has great filters, great segmentation, great custom report building tools, great extras like color coding, notes, and dashboards. Did I mention it is now all available for free?
2. The complaints about IndexTools are, for the most part, underwhelming. One (nameless) vendor has said that IndexTools is inferior because it wasn’t included in the last Forrester Wave and JupiterResearch constellation. The same vendor said that IndexTools is inferior because someone else said most of their clients are SMBs. The same vendor tries to created FUD around the data center being in Eastern Europe. The same vendor says that IndexTools doesn’t have “deep domain expertise” or “specialized services” The problem is that A) both Forrester and JupiterResearch focused only on U.S.-based vendors and (I believe) excluded IndexTools based on geography, not functionality, B) IndexTools does have some very large clients (Vodafone, PriceRunner, Tesco, ToysRUs — read this interview with Dennis Mortensen for details), C) I suspect Yahoo! will be doing some work on the data collection and reporting architecture over the next few months, and D) IndexTools is very likely to follow Google’s model of relying on external web analytics experts to provide expertise and specialized services (YAAC, right?)
3. The valid complaints about IndexTools are either being addressed currently or are likely to be addressed very shortly. Phil Kemelor from Semphonic who also does some work for CMSWatch has looked at the major analytics applications perhaps more than a normal human being should in the process of writing his really, really big book on web analytics tools. Regarding IndexTools, Phil said the following:

“IndexTools does not offer the functionality that distinguishes it from Omniture and WebTrends — for example the ability to analyze unaggregated data from a graphic UI and to perform repeatable Excel reporting. For now, you must use regular expressions to analyze unaggregated data and do manual updates of Excel…just like Google Analytics.”

Good assessment, Phil, and a reasonable critique of IndexTools except. I would only offer that all the major vendors require add-on applications to analyze truly unaggregated data from a graphic UI (Omniture Discover, WebTrends Visitor Intelligence, etc.) and on this point IndexTools has already showed quite a lot of people “Rubix” which is the inevitable response (and which I sincerely hope that Yahoo! decides to release, even if they make us pay something for it.)

Personally I think that the ability to analyze unaggregated data should be in a separate interface, one designed for expert users working in the web analytics hub, and that IndexTools following the SiteCatalyst/Discover, WebTrends Analytics/Visitor Intelligence, NetTracker/NetInsight, etc. model is the right decision.

Regarding the “repeatable Excel reporting” … in my interface under “Settings” I have something called “Scheduled Email Reports” that seems to work pretty well. I can add a bunch of reports and schedule them for delivery in whatever format I choose; It’s not exactly what I want (having used HBX Report Builder, still the gold standard for Excel integration IMHO) but it certainly fills an important need for web analytics practitioners. This may be an IndexTools 10 feature that I am a BETA tester for, which may explain the confusion …

Finally, I would personally offer that Google Analytics and IndexTools are (in their current state) dramatically different applications targeting very different audiences. I am sure to take endless shit for this but I believe that Google Analytics is a great entry-level tool, something designed to seem “easy” and get folks used to the idea of doing web analytics on a professional level; IndexTools is not a great entry-level tool, rather it is a rich analysis engine that is the next logical “step up” from Google Analytics for practitioners and companies needing robust segmentation, customization, and drill-down capabilities.

Don’t believe me? Go to Google Analytics and create the following segment then apply it to your most commonly used reports:

In the body of the document, which I hope I am okay quoting a little bit from, Phil also says (and I paraphrase) that IndexTools strengths include “on-screen drill down detail in reports; ad-hoc analysis features; dashboard presentation and customization” and that in addition to the weaknesses listed above, that a weakness is that IndexTools requires the “manual entry of distribution list recipients.”

Those of you who have seen Phil’s book know that he has done an absolutely amazing job summarizing the strengths and weaknesses of each tool. In his conclusions, Phil has says the following:

“IndexTools should receive consideration if you want a well-priced, commerce-focused reporting solution and do not want to pay Omniture, WebTrends, or Coremetrics prices. If most of your users are part-time analysts and marketers who basically need reporting, IndexTools may be a reasonable selection. If you require complex slicing and dicing, IndexTools should still be on your list. Automated data integration and multiple sites with huge volumes of traffic and multiple campaigns may present challenges to IndexTools. However, because the company has a history of accommodating custom requirements, you should consider the possibility of IndexTools meeting your needs even though you want something outside of their standard feature set.”

My interpretation of this is more or less “look at IndexTools” as part of your consideration process. There are instances where IndexTools may not be appropriate — absolutely true, no application is all things to all people — but if you compare the assessment above to the conclusions provided for Omniture and others I think you’ll see a favorable recommendation for IndexTools (at least I did.) If you’re interested in reading the rest of what Phil had to say, I strongly recommend buying a copy of The Web Analytics Report 2008 from CMSWatch.

Some things are missing in IndexTools 9, mostly the ability to create custom metrics (something I have become pretty used to in Visual Site), and a couple other minor things I like to see in a mass-market analytics solution but I think there are quite a few people who will be willing to look the other way on small points like this given the price point. My basis for saying this? Simple, a rumored 1.2 million Google Analytics deployments and the army of people willing to look the other way regarding the limitations in GA …

Which brings me to why I believe IndexTools is a permanent game changer:

1. The paradigm shift I cited in my last post on the subject is going to happen a lot sooner than some people thought. Now, if you know an IndexTools partner, or soon if not, companies really don’t have to worry about the vendor selection process. If you’re new to web analytics you can get Google Analytics; if you’ve pushed past the limited functionality in GA, you can get IndexTools. Total cost for tools: nothing. Companies will be able to (finally) focus on how the tools are used and the process of doing web analytics, not haggle with vendors over pricing, fight with IT over implementation, etc., which is exactly where we need to be. Web analytics is not about the tools, web analytics is about how the tools are used to improve the business.
2. The existing for-fee vendors have been served notice and will have to figure out a better sales proposition than “the competition sucks.” I’m willing to be wrong on this point, but I don’t think the current “anti-IndexTools” messaging I’m hearing is likely to hold up under scrutiny. Eventually buyers are going to realize that they’re talking to sales people, some of whom are somewhat integrity-challenged, who will say anything to get them to look away from Yahoo’s offering. This rocks, in my opinion, because it spells the end of the negative selling that has been a hallmark of some vendor’s capabilities. Let’s focus on what makes you truly different, given that I can get something very similar for free, huh? As far as the claim that IndexTools sucks because the analysts don’t cover it? Um, are you sure?
3. For the existing for-fee vendors to continue to thrive, they will need to move quickly up-market and focus on the needs of a very sophisticated audience. This is really very interesting since it highlights a growing schism between vendors trying to own the Enterprise and those trying to play nice with others. Don’t know what I mean? Look around for things like “Closed-loop Marketing” and the implication that you should be bringing all your Enterprise data into your web analytics system; compare that messaging to the idea of open architectures and the notion of integrating appropriate web analytic data back into the rest of the business. In fact, now that the pricing battle is coming to an end, I think that this is the next really interesting conversation we’re going to have …

So we start to focus on the application of the tools, not the tools themselves. Game changing. The vendors are forced to refine both their offering and their sales process. Game changing. Consultants have better free tools to work with. Game changing. Web analytics technology is pushed further along towards being a commodity. Game changing.

I’m not one to make a bunch of predictions, but I would challenge those of you who disagree with my assessment to set an alert in your calendar for twelve months from today. When the alarm goes off, take a look at the adoption rate for IndexTools, the trading price for OMTR, and the ownership status of the remaining privately held web analytics vendors in the marketplace today.  Again, I am perfectly happy to be wrong about how IndexTools might change the market …

I should reiterate that all of this is not without risks: there is still a lot that could go wrong as Yahoo! integrates IndexTools into their larger offering: the team could become de-focused, key people could leave Yahoo, Microsoft could succeed in their take-over efforts, etc. (and yeah I remember Keylime too, but that was a different time, a different technology, and frankly a different group of people managing the process.)  I am very impressed with what I’m hearing so far and look forward to the evolution of the entire web analytics sector, driven in part by Yahoo! and IndexTools.

Again, congratulations to the teams at Yahoo and IndexTools and, um, Merry Christmas to the few IndexTools partners who will have the market cornered on this technology for the time being.

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.