How much do you pay for web analytics?

I was just cruising through the just published WebTrends 9 update and thinking about how the web analytics vendor market is evolving. “9” looks neat and I’m sure glad to see some really important metrics like bounce rate appear in the UI. Still, I always scratch my head when I see vendors make statements like “[the] data visualization tool in Webtrends Analytics 9 lets anyone – even analytics novices – quickly and easily understand changes in key metrics” and then put up a feature list like this one.

Still, it’s nice to see WebTrends making some moves so congratulations to Jascha, Casey and the entire Portland crew for getting the update out the door!

Anyway …

I said I had been thinking about the evolution of the web analytics vendor market. A lot of my thinking this past week has been colored, well, purple, thanks to the announcement of Yahoo’s Web Analytics Consulting Network (the YWACN or, as I think about it “the Yack’n!”.)  On July 30th Yahoo announced that they were making Yahoo! Web Analytics much easier to get through 48 partners around the globe.

Now, when you look at the partner list you might not recognize a lot of the names — I sure don’t — but a few should stand out. Specifically Stratigent, Semphonic, Sapient, and my own company Analytics Demystified. While I can’t speak directly for any of these companies, all are run by very smart people, and I have to wonder if they’re not thinking about YWA much the same way I have been.

I mean, if you think about it, Yahoo! has basically come to us and said “Go sell excellent implementations of YWA and provide awesome ongoing support” for an application that, according to Forrester Reseach, has 77% of the core functionality of Omniture SiteCatalyst. Or, put another way, “Find companies that are struggling to get value from their existing investment in {pick a vendor}, kick that vendor out, and then make money helping them be successful for less then they spend today.”

Sweet, thanks Yahoo!

Not to brag (since it was pretty obvious) but I did say this would happen back in April 2008 given the hard work Google Analytics (who is ironically NOT a YWA competitor) had done with their similarly badly acronym’d GAAC. Yahoo wisely avoids having to support customers directly, leverages some incredibly smart folks, and lets companies reduce their annual analytics spend without having to forgo core functionality like multiple custom variables and visitor-level segmentation.

Hell, we’re not even talking about real-time updates and demographic reporting and segmentation, which while the former often has more value ascribed than necessary the latter, if I can say so based on my own usage, is pretty fantastic and not available in any other web analytics application in the market today. I mean, who would have guessed that so many mature, responsible adults love to Twitalyze themselves!

Now I sincerely doubt that any of the YWACN members are going to suddenly stop supporting the big for-fee applications out there … I know I’m not! And I fully expect the adoption of YWA to be slow and methodical (mostly because of existing contracts, Yahoo’s terms of service, and the fact that Yahoo is somewhat limiting YWACN access to new accounts although I think their strategy is fair and makes perfect sense.) But at the end of the day Yahoo has made quite possible the single best move they could have if their goal was to provide an awesome service with excellent third-party support at the best possible price.

Now if you were paying attention you may have noticed I commented that Google Analytics and Yahoo Web Analytics are not competitive. Crazy, huh? But they’re not. Google Analytics (as it exists today) and Yahoo Web Analytics (as it exists today) serve two near completely distinct target markets.

Now I know I’ll get heat for saying this (again) but I just don’t think Google Analytics is appropriate for “free standing” use within the true Enterprise. I’ll point again to Bill Gassman’s recent note on the service (which I thought was excellent) and will obviously concede that it is well within Google’s power to make GA the “bestest, most Enterprisey” web analytics application the world has ever seen … but it isn’t today. More importantly when I go looking for companies mature in their use of web analytics who rely exclusively on Google Analytics and have chosen to do so explicitly, I simply don’t find them.

I could be wrong — if you’re an analytics samurai using nothing but GA please let me know —  but what I see a lot of is mature businesses using Google Analytics to back-fill some limitation in their for-fee vendor’s service. For example, up until today it was amazingly difficult to get WebTrends to calculate a bounce rate and some people think setting up visitor segments in SiteCatalyst is a lot of work. More importantly, while lots and lots of people complain about how difficult their analytics application is to use, the team at Google has done a freaking brilliant job with the GA user interface and in my humble opinion it sets the bar for ease-of-use in web analytics.

Yahoo Web Analytics in an Enterprise context, and hopefully Dennis will forgive me this since he’s tanned and rested after a week or two in the islands, is not really that easy to use, not that easy to set up, and not that easy to configure — remember it’s 77% of Omniture SiteCatalyst which nobody ever describes as “easy to implement and easy to use” (except for Adam Greco, but he’s clearly an exception!)

But here’s the secret: Yahoo Web Analytics is not supposed to be easy to use, it’s supposed to be really, really powerful! Yahoo Web Analytics is an Enterprise-class web analytics application out of the box designed to support businesses with custom data collection needs, custom reporting needs, custom segmentation needs, and the challenges typically found within any company of size.

More importantly, because of this functionality I believe that Yahoo Web Analytics will be a gateway to a much deeper relationship between the YWACN and their customers than the GAAC have found for the most part.

Yes, Yahoo’s APIs are tightly held and thusly YWA is not as “open” as WebTrends or as “integrated” as Omniture. Yes, Yahoo is keeping Rubix under wraps so it is not as flexible as Affinium NetInsight or Coremetrics Explore. Yes the interface is kinda clunky and the terms of use were written by lawyers … I get the complaints and hear the FUD loud and clear. But given the massive adoption of Google Analytics I think that coupling exceptional services and support with a free Enterprise-class application has a lot of potential to be the permanent game changer that I first described last year.

What do you think? Is purple the new green? Is “9” too little, too late? Does Yahoo! have a chance to focus now that they have outsourced their search business? Or am I missing the point and despite two great free solutions will the world continue to pay for web analytics the same way we always have? I’m totally willing to be wrong about this one … but if you don’t believe me about how powerful Yahoo Web Analytics is either read this book or contact me directly and I’ll see about getting you your own YWA account.

As always your comments are welcome.