Perhaps the only thing hotter than social media right now is mobile. And with good reason — smartphones like the iPhone and Palm Pre are taking our ability to get information to entirely new levels and ushering in an era of “digital ubiquity” that is clearly without precedent. Unsurprisingly business is responding by actively exploring how they can participate in the mobile opportunity, either by optimizing their site for small screens or going so far as to build cool, new iPhone applications to support long-standing offline initiatives.

Fortunately most business owners have learned from past mistakes and are showing interest in measuring the effect of their investment into mobile. But measuring mobile isn’t easy — the sheer diversity of technologies involved and the rapid evolution of the industry has created a monsterous landscape of devices, communication protocols, and requirements.

As a result dozens of companies have sprung up, all making claim to a unique ability to measure the mobile opportunity. Unfortunately some of these companies have decided that relying on hype, hyperbole, and sometimes outright lies are a better sales strategy than building a great product with a unique value proposition. We have seen CEOs bash other CEOs, sales people obfuscate their identity and try and provide “objective” answers, and antics that can only be described as “juvenile.”

Because the mobile opportunity is so great Analytics Demystified started taking a closer look at measurement earlier this year. I was fortunate enough to be able to rely on the expertise of folks like Michiel Berger and Thomas Pottjegort at Nedstat, the mobile team at NBC, dozens of analytics end-users, and some of the brightest product managers in the analytics sector tasked with integrating mobile into existing digital measurement offerings.

What I found was a series of surprising truths about how mobile analytics is evolving. Nedstat was kind enough to sponsor this research — and clear disclosure: Nedstat has been measuring and integrating mobile data into their web analytics offerings for years — and I am happy to announce the availablity of this research in a new white paper titled “The Truth about Mobile Analytics.”

You can download this paper from the Nedstat web site for free (but they do ask your name, email, and company name):

DOWNLOAD THE TRUTH ABOUT MOBILE ANALYTICS

We are also holding a special webcast on the subject on June 23rd at 10 AM Central European Time (CET) which is unfortunately quite late in the evening for those of us in the U.S. but quite well timed for Nedstat’s customers. I suspect the webcast will either be repeated or rebroadcast at a later date and time.

SIGN UP TO JOIN THE MOBILE ANALYTICS WEBCAST ON JUNE 23

Also, if you’re really into mobile and mobile analytics please consider joining us at the X Change Conference September 9, 10, and 11 in San Francisco. More details will be out next week but our mobile sessions will be led by Greg Dowling from Nokia (a company with some knowledge of mobile I am told.)

I encourage everyone to download the paper and give it a read, regardless of your position on mobile and mobile analytics today. As always I welcome your feedback and commentary.

When I quit my job at Visual Sciences back in May 2007 to form Analytics Demystified I did so because I had a vision of a new type of web analytics consulting group. I very much wanted to build a small practice made up of very senior people capable of solving the really hard problems most companies have after they’ve made the investment in web analytic technology. I wanted to establish a firm that would compliment the highly tactical firms that I respected so much — companies like Semphonic, Stratigent, and Europe’s OX2.

After two years I am very proud of the work I’ve done and the clients I’ve worked with. I have had the opportunity to work with some of the best brands, the best companies, and the most visionary management teams who are actively wokring to do more than simply “run reports” and instead want to actively compete on web analytics. That said, I have come to the realization that there is no way I could satisfy the global need on my own … so I did what every good business owner should do: I went out and got someone smarter, more eloquent, and better looking to be my business partner!

At Emetrics last week in San Jose I was incredibly excited to announce that Aurélie Pols, Europe’s most widely known and well respected web analytics consultant, has joined Analytics Demystified as a Principal Consultant.  Aurélie brings depth and experience in web analytics that is rare anywhere in the world and exceedingly rare in Europe, she was the first consultant to break the “one vendor” stranglehold in Europe that forced firms to work exclusively with a single technology, and she brings a brilliance to the explanation and use of these tools that amazes even me.

Now Aurelie and I will be working together in Europe to “demystify web analytics” and help companies make significantly better use of their technology investment. Between the two of us and our contacts across Europe Analytics Demystified will now be providing a far greater level of service than was previously possible.

I highly recommend that you read Aurélie‘s “Hello, World” blog post and start following her at aurelie.analyticsdemystified.com. If you have any questions about Aurélie’s practice or how Analytics Demystified can help you regardless of where you’re located, please don’t hesitate to contact us directly.

I hope you will welcome me in welcoming Aurélie to the Analytics Demystified team.

Recently I have spent an awful lot of time thinking about and talking about data accuracy issues in the field of web analytics. The widespread use of cookies as a tracking mechanism and the underlying assumption that “one cookie = one visitor” is a big part of the problem, but cookies are not the only problem. Another problem, one that I actually believe to be more substantial than cookies and visitors, is  the challenge of campaign attribution.

Challenge? What’s hard about campaign attribution? You tag campaigns and web analytics tells you what works, right? You get pretty ROI graphs and click-reports and all that fun stuff? Campaign analytics is easy!

Wrong.

One of the best-kept secrets in online marketing is that most campaign attribution data is completely wrong and the models used to evaluate campaign performance are wholly inappropriate.  The relative nascence of digital marketing practices, combined with conflicting measurement systems and poorly understood interaction between online marketing channels, likely means that hundreds of millions of dollars are wasted annually on marketing efforts that don’t produce their intended results.

Companies are increasingly responding to this observation by re-examining their marketing measurement systems.  Even the most cursory analysis yields a great deal of information about the “campaign attribution problem.”  Popularized recently by Microsoft with their “Engagement Mapping” efforts as well as analysis published by Forrester Research and others, it is clear that the most widely used online campaign attribution model is inherently flawed.

To correct these flaws and begin to improve both the accuracy of measurement and the general understanding of how marketing really works online, Analytics Demystified recommends a new approach to campaign analysis.  Dubbed “Appropriate Attribution”, the approach leverages widely available but infrequently used data to triangulate towards the true value of online marketing efforts.

Given that the majority of online advertisers have direct response goals, and that most marketers are still generally unsatisfied with the campaign measurement tools at their disposal, Analytics Demystified believes that Appropriate Attribution is the first step towards improving companies’ collective understanding of their digital marketing efforts.

Eventually marketers will have access to robust warehouses of data detailing consumer interaction with online media and advertising, but the adage “you must walk before you can run” is as true in digital marketing as it is in life.  Before business owners and marketers become fully equipped to benefit from complex marketing mix analysis of online and offline channels, they are well advised to address the campaign attribution problem to increase the return on their valuable dollars spent for online marketing efforts.

Thanks to the fine folks at Coremetrics you can read all about Appropriate Attribution and learn how you can start to get a better understanding of your online marketing efforts today.

Download your copy of the Appropriate Attribution paper from Coremetrics today.

For the past few weeks I have been thinking about the economy and trying to reconcile two seemingly contradictory observations:

1. The economy sucks, and it doesn’t seem likely to improve anytime very soon
2. The web analytics sector is reportedly recession-proof and, in fact, predicted to grow in 2009

While I hardly need to provide any proof of the first observation, evidence for the latter has been emerging from a variety of voices in our community for the past few months.  Case in point:

• In January, the Web Analytics Association reported that nearly 70% of companies planned to continue to invest in new tools and staff throughout 2008
• Back in July, Corry Prohens from IQ Workforce wrote in a guest post in this blog that “74% of practitioners expect that spending on web analytics will increase at their company during the recession”
• In September, my good friend Jim Sterne surveyed the web analytics crowd and found that 87% of practitioners plan to maintain or increase their budgets for web analytics tools and services in  the face of the current economy, and that nearly twice as many respondents indicated they planned to increase budgets for web analytics (21%) as planned to decrease same (13%)
• Last week, the fine folks at E-consultancy splashed all across the news with the headline “Web Analytics: A Silver Lining in the Recession Cloud” by reporting that web analytics was poised to grow in 2008 by 12%

In the E-consultancy report, the organization’s head of research Linus Gregoriadis was quoted as saying: “The profile of Web analytics continues to grow as it becomes more integral to business decision-making and organisational strategy. The credit crunch is putting the spotlight on analytics as organisations work harder to understand where they are getting the best return on investment and where real value is being added.”

Recently, Josh James, the CEO of Omniture said something similar during the Q&A portion of the company’s Q3 earnings call in response to a question about whether businesses saw web analytics as discretionary:

“Every dollar that a marketer has, I think everyone has in every organization is under pressure right now and certainly marketing spend is where CFOs like to look and see if they can cut. But, what we’ve seen with our customers is their online channels are the ones that are performing the best. Their online channels are the ones that are giving the most direct impact within that quarter that spend is also taking place.

In terms of the way that they think about Omniture, even if they cut let’s say 10% of their marketing spend, they’re going to use us to a) identify the 10% they’re going to cut and b) use us to optimize the other 90% to try to get back up to the same results as they had with the 100% the year before. These kinds of times actually drive usage of our product.

When things are good it’s a lot easier when you want more sales just to throw more money at the top of funnel and to generate more leads and go through the process. When things get bad people try to focus on of everyone that’s already coming to our store, what can we do to keep them more attracted? What can we do to get them to look at other things? What can we do to get them to read additional articles? All of those behaviors drive uses of our product.”

All of this sounds absolutely spectacular. Except for one thing …

I’m not sure I believe any of it.

I think that we are collectively starting to suffer from the echo chamber effect, essentially reiterating that web analytics will be fine in this lousy economy because, unsurprisingly, we are all making money off of web analytics and we would very much like to continue doing so. The WAA, IQ Workforce, my friend Jim, E-consultancy, Omniture, me … our collective businesses are all more or less explicitly tied to continued investment in the sector. So why wouldn’t we look for data that suggests that the picture continues to be rosy and the future bright?

Why indeed.

In terms of the data presented above, as a former researcher I would offer this assessment: many of these surveys appear to suffer from sample bias. Asking the Yahoo! group, members of the Web Analytics Association, or the audience attending Emetrics about their interest, investment, or organizational focus on web analytics is kind of like asking your average Democrat in Portland, Oregon how they feel about Barack Obama.  The problem is not the audience, the problem is the interpretation: I think it is misleading to extrapolate the responses from a non-random sample of businesses and business people to the larger audience.

This kind of sampling leads to claims like “52% of online marketing managers are currently engaged in A/B or multivariate testing …” Fifty-two percent implies that tens of thousands of online marketing managers are testing. Which sounds great, except that when Offermatica and Optimost were acquired by Omniture and Interwoven they had a few hundred customers between them, and Stephane Hamel’s WASP tool reports that 0.4% (zero point four percent) of the Top 500 online retailers are using easily detected A/B or multivariate testing tools.

Don’t get me wrong, I too have been guilty of sampling biased audiences, although in the past year I have stopped conducting primary research due to both the sampling issue and the plethora of free research that suddenly appeared in the marketplace.

Ultimately I’m suspicious of this optimistic data that we’re seeing, especially in the context of statements like this one made by Mr. James made on the earnings call referenced above about the effect the economy is having on Omniture’s ability to forecast Q4 and 2009:

“Towards the end of September however, it became apparent that the challenging macroeconomic and financial environment may have some impact on our business going forward although it remains difficult to quantify the uncertainties specifically.”

Mr. James and his CFO specifically don’t want to talk about 2009 on the call. Which makes sense to me, since here are some other data points:

• The economy sucks, and without belaboring the obvious, it appears that this suckiness will stay with us for quite some time;
• While I don’t question Mr. James assertion that his best customers make excellent use of web analytics, in my personal experience this is not universally true;
• Some of the largest consumers of web analytics products are starting to struggle;
• Despite the conventional wisdom that dictates that brilliant analysts are safe when times are tough, I am getting more and more calls from brilliant analysts who are being laid off or being offered severance packages to walk away.

It is this last point coupled with something I learned at Emetrics that has me the most concerned.  In D.C. at Emetrics I heard Liz Miller from the CMO Council say that most CMO’s are a few years away from fully understanding the value of web analytics. If Liz is right, and her credentials are impeccible when it comes to the CMO’s office, then given the anecdotal evidence that continues to come in I wonder if web analytics is slightly more discretionary than we’d like to believe.

Don’t get me wrong, I sincerely hope to be wrong in this assessment. As an author, public speaker, evangelist, consultant, and conference co-producer focusing on web analytics I honestly hope to be able to write a follow-up post in six month saying, “Wow, I was really super-wrong about where the web analytics industry was going …”

But what can you do if I’m more right than not? What if you work in an affected sector or work for a company known for their web analytics acumen that is suddenly faced with bankruptcy or worse? What if the folks you work for who profess a great love for data-driven decision making are really HIPPOs in their heart and when the real bloodletting begins are just as likely to look for savings in areas that can be easily cut (human resources, for example) as opposed to those that would require breaking contracts?

What indeed.

If you’re in any way concerned about the current economy and your personal employment situation, here are five tips that I would offer to help you best prepare for the worst.

Tip #1: Focus on Increasing Profits, Not Minimizing Spend

My friend W. David Rhee just published a great response about the relationship between web analytics, sales, and marketing in a down economy.  To paraphrase Dave, if the bosses begin to panic, you don’t want to be in a situation where you appear to be an expendable marketing cost that can be cut.  It is far better to be focusing your analytical efforts on how the organization can be increasing profits, even if you have to fight to spend more time conducting analysis and less time generating reports.

Essentially you want to take Mr. James statement above to heart and work your butt off to optimize the lower-levels in your conversion funnel, working with what you already have, not what you might be able to attract.  The good news is that the technology supports this analysis; the bad news is that more often than not, the deeper you get in the funnel, the more difficult optimization becomes for a variety of reasons, not limited to the business, IT, and “the way we’ve always done it!”

Be a profit center, be big picture, become truly invaluable.

Tip #2: Don’t Be a Report Monkey

The unfortunate reality about web analytics work is that far too many smart people spend far too much time generating far too many reports that far too people actually read and even fewer actually derive real value from.  Sound familiar?  When I started the conversation about process in web analytics in 2006 at Emetrics, over 80% of the audience said they spent too much time on “reports” and not nearly enough on “analysis” … sadly I’m not confident that things have changed much in the past two years, especially on a percent-of-practitioners basis.

There are any number of great posts about why reporting is over-rated and how the real value in web analytics comes from careful, business-focused analysis of the data, there are still too few companies that have put the hub-and-spoke model into practice and are able to effectively leverage web analytical resources.

My advice to to step-up and find the real value in your data, even if you have to conduct the analysis on your own in the wee hours.  It’s not as if you can just stop generating reports (tempting as that may sound) but if you’re a good analyst, taking the time to figure out where the real opportunities to increase revenue are is the work you want to be doing anyway.  Taking the initiative to make data-powered recommendations and presenting them is a good way to demonstrate your skills and commitment to the business (but don’t stop doing the job you’re being paid to do!)

Analysts conduct analysis and make recommendations. Be an analyst.

Tip #3: Start Watching the Job Boards

Even if you feel pretty good about the situation you’re in you have to admit that the most accurate term to describe the current economy is “dynamic.”  In situations like this the worst thing you can do is be caught off guard and so I would offer that spending a little time surfing the Analytics Demystified Web Analytics Job Board (also see the WAA’s version) would be time well spent.

According to the nice folks at SimplyHired the number of job postings looking for “web analytics” experience of some kind continues to increase:

Assuming these postings are all accurate and still open, this is fantastic news since it contradicts my thesis that our sector is at risk.  The only thing that concerns me is that when I add a major market to the search, the trend graph starts to look substantially different. Here is the trend of jobs in SimplyHired for “web analytics” jobs in San Francisco:

Not quite as encouraging, huh? Now I might be using SimplyHired incorrectly but the general trend observed in the Bay Area makes me wonder if job growth in the sector is as strong as the first graph shows. Plus, anecdotal evidence suggests that an increasing number of companies are imposing hiring restrictions and outright freezes, meaning that many of these postings are effectively “inactive.”

By no means am I suggesting that any gainfully employed web analytics practitioner should jump ship in this economy unless you are absolutely confident about the situation you’ll be moving into.  But keeping your eyes, and your options, open makes increasingly good sense in my opinion.

Be smart about your current employment situation.

Tip #4: Think About Your Skill Set

I recently interviewed Corry Prohens from IQ Workforce and asked Corry about requirements for web analysts and what he looks for when trying to place folks. I recommend you read the entire interview, but here is what Corry had to say about what IQ Workforce looks for:

“In general we look for someone that has tool expertise, communication / interpersonal skills (these jobs are increasingly front-office), analysis & presentation skills and some complimentary kicker (testing, SAS, SQL, search marketing, development skills, search marketing skills, etc.) based on what our clients need at the moment.”

I went on to ask Corry about what two criteria he believed would help practitioners land a great job in this economy:

“If I were a web analyst I would learn how to use SAS to manipulate data & models.  I would also try to pick up experience in  testing/optimization.  Having one (or both) of these would open a lot more doors than a straight WA skill set.”

Real analytics experience and a focus on testing and optimization.  Great advice, even if the former is somewhat non-obvious (perhaps that’s why it’s such great advice!)  And while you may not be able to implement testing technology on the job, Google Analytics and Google Web Site Optimizer are free and easily implemented on a personal blog.

Push yourself and expand your skill set. Move ahead of the market.

Tip #5: Network, Network, Network

In my experience one of the most valuable things you can be doing during uncertain times is expanding your network of contacts.  Fortunately the web analytics industry is pretty well set in terms of opportunities to meet other practitioners, both locally and globally.  Here are a few networking opportunities that I highly recommend:

• Attend or host a Web Analytics Wednesday event.  Web Analytics Wednesday is the world’s only local social networking event for web analytics professionals and it has helped dozens of folks find their next new job.  Take advantage of the many events happening before the end of the year or, if you don’t see an event in your town, contact me directly about getting a chapter started where you live!
• Join the Analytics Demystified group at LinkedIn.  A few years ago I started a LinkedIn group for web analytics professionals.  Now the group has nearly 1,300 members worldwide and is open to anyone interested in getting connected via LinkedIn.
• Join the Web Analytics Association.  The WAA is the only association we have and is actively working to create great value for their members around the world.  Joining the WAA gets you discounts to great conferences, access to their job board, and plugs you in to an increasingly vibrant community.

At the end of the day, despite the great demand for our skills and long-term opportunity afforded to all of us, a web analytics job is like any other job.  Your professional growth and development is as much a function of the people you know and your relationship to the community as your native analysis skills.

Get to know your peers. Have fun while you do it!

What Do You Think?

This has become a ridiculously long post considering that I could have just said, “I think there is more risk than we realize.  Be prepared.”  Most of us working in the web analytics arena have become quite used to the good times rolling and have every faith that they will continue to roll.  Only now, budgets are shrinking, jobs are being lost, and the general fear is that the President-Elect will create a business climate that is somewhat less friendly than most would like.

Still, my firm belief is that if you’re great at what you do and if you’re working for folks who clearly “get” the web analytics value proposition you have nothing to worry about.  All I would caution is that you not assume the latter is true, again especially in the context of the conversations I have constantly about senior-management not really understanding the art and science of digital measurement and analysis.

So now it’s your turn.  Do you think I’m way off base?  Do you believe the data I was somewhat critical of earlier in this post?  Does your boss “get” web analytics?  Are you optimistic like Mr. James that your company will be able to leverage your investment in Omniture (or whatever) to optimize your marketing spend?  Or are you worried about your job, or worse, have you been laid off?

I normally don’t allow anonymous comments but given the somewhat sensitive nature of this post and the feedback I’d love to hear, as long as the comments are appropriate I’ll approve them.

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.

This is a guest post from Corry Prohens of IQ Workforce.  Corry is a sponsor of the Analytics Demystified Job Board and one of the most plugged-in folks I know in our industry.  He’s helped some great companies find talent, and some amazing talent find great companies which is, as we all know, one of the hardest things of all about web analytics.  Thanks to Corry and IQ Workforce for sponsorsing the job board and I hope all of you have either a safe and relaxing 4th of July or a nice respite from U.S.-based email, depending on where you live in the world!

Without further comment, Corry Prohens:

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This past spring I was growing concerned with the condition of the economy.  Skyrocketing oil and food prices, plummeting real estate values, an unprecedented credit crunch, investment banks folding and teetering…

The lead question for business publications and programs shifted from “Will there be a recession” to “How long and how awful will the recession be?”

In a previous life I lived through the dot com surge and bust as a technology recruiter.  I did NOT want to go there again. The last few years have been very kind to our community / career landscape and my paranoia was growing that the good times were going to end.

As a coping device and because I assumed that my colleagues shared my interest/concern, I decided to poll the community on the issue in our Summer 2008 industry survey.

It turns out that while most economists say that the United States is either experiencing or entering a recession, web analytics practitioners in the US are overwhelmingly optimistic about their career prospects in the short and intermediate-term future.

A sneak preview into the survey results shows that individuals and departments around the country are downright bullish:

• 74% of practitioners expect that spending on web analytics will increase at their company during the recession (40% said it would increase a bit / 34% said it would increase significantly)
• 60% of practitioners said that the recession would either increase the likelihood of hiring additional web analytics resources or have no impact
• 17% said that their company was either somewhat or very likely to reduce web analytics headcount during the recession
• 2% thought that the recession would have a major negative impact on their career

Thank goodness! And just to prove that these folks are answering with their heads and not their hearts, my team is literally busier right now than we have ever been.  Entering the short July 4th holiday week, we have been absolutely inundated with new requests from clients for permanent and contract web analytics resources.

As a longtime LinkedIn fan, I decided to throw the question up there last week to see what kind of response I would get.  Eight people – all web analytics practitioners – answered in a single voice:  “What recession?”

The only concrete difference / pattern that we have seen in our business over the past several months has been the exploding demand for web analytics contractors.  A year ago we were working on one contract position for every eight permanent positions.  Now contractor requests make up over a third of all new requests for resources.  I am not sure if I am ready to draw a direct correlation between the economy and the rising demand for contractors since there are several other viable explanations.

Here is the link to participate in the current survey (or to view results of previous surveys):

http://www.iqworkforce.com/survey.asp

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Thanks again to Corry for his support of Analytics Demystified!

Those of you who have been following the Web Analytics Forum at Yahoo! groups will no doubt be as excited about this announcement as I am: I am delighted to let you know that Paul Holstein, co-founder, Vice President, and COO at CableOrganizer.com will be taking over for Daniel Shields here at the Analytics Demystified weblogs.  Paul has been a long-time contributor to the Forum, both in the conversation and behind the scenes, and despite the fact that he once told me that “web analytics was just a hobby” he has demonstrated his expertise time and time again.

What happened to Daniel?  Dan has taken a big step forward in his career, co-founding Wicked Business Sciences with Paul, and Nicolas Dubus and getting into the consulting game.  Given the list of service offerings these guys have already I have little doubt they’ll be hugely successful.

I will keep Dan’s posts up for the time being but they’ll be in Paul’s blog (although their original URLs should work just fine.)

Paul has indicated that his style will be short-and-sweet, touching on a relevant subjects as they creep up in his business, in the Forum, and at great conferences like the X Change (where you can meet Paul in person!)

Paul’s “welcome, Demystified” post is up and I would encourage you to check it out if for no other reason to add Paul’s blog to your RSS feeds.  (I have already added Paul to the “All Analytics Demystified Weblogs” super-feed, just in case you want to subscribe to our writing en masse … http://feeds.feedburner.com/AllWebAnalyticsDemystifiedBlogs)

No, it’s really not, sorry.  But as long as I have your attention I wanted to talk about a thread developing at the Web Analytics Forum about IndexTools not yet being freely available to all that I think is pretty interesting.

Does anyone remember how long Google had Urchin before they gave away Google Analytics for free?  Eight months.  And everyone spent the entire time saying, “Naw, they’ll never give it away … it would be way too expensive!”  Then, remember when they did give Google Analytics away, they immediately had to stop.

So why would anyone expect Yahoo! to be giving IndexTools away for free to everyone barely two months after the acquisition?  Impatience?  Internet time?  An intense and building desire for really good tools for the best of all prices?!?

Eh?

I am very much in the “I bet it will be free” camp, but I suspect that in the midst of everything else Yahoo! has been dealing with lately that the acquisition and roll-out team will take a measured, thoughtful approach towards the next phase of IndexTools.

Based on the letter recently sent to existing partners, it kind of sounds like they want to build a few new data centers and make sure they can handle the needs of their existing customers and partners — nothing really wrong with that, is there?  I bet they’ll also take some time and think about how to avoid some of the problems the other guys had (rollout issues, service outages, extended betas, etc.)

I’ll go ahead and reiterate (and clarify) my original prediction: I think we’ll see free IndexTools for anyone and everyone sometime around Christmas 2008.  I know people around the world are still getting new IndexTools accounts through the partners — you can see that in my Vendor Discovery Tool — but Yahoo! has a lot to consider before they roll IndexTools out to the masses.  I mean, if you think web analytics is hard, you should try developing, maintaining, selling (or not selling), and supporting a web analytics application in this market …

I’ll also bet Yahoo is going to ask for something in return for the accounts as well: Agreeing to run ads on their sites, signing up for a developer account, allowing them use your data to improve their search engine, … something that justifies or offsets some of the cost associated with giving this fairly robust web analytics application away.

Finally, I suspect that Yahoo! will soft-peddle IndexTools when it is widely available.  What I’m hearing is that despite what a lot of people think, Yahoo! doesn’t really want to piss off Google, Omniture, WebTrends, or any of the existing web analytics providers.  But hey, why should they?  Why scream “AWESOME FREE WEB ANALYTICS SOLUTION!” when they can quietly release it and know that word will eventually get out?

Anyway, IndexTools is not free for all, at least not yet.  As Julien Coquet would likely say, c’est la vie!

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!

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 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!

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?

What does the future hold for web analytics, indeed? During my tenure at JupiterResearch I was more-or-less paid to predict the future, but at best I was right maybe 50% of the time. I think I predicted (correctly) that Google would give Urchin away, but I probably also predicted that Microsoft would acquire WebTrends (incorrectly) as a result. Such is life.

Fortunately I am smart enough to surround myself with really smart people, which is what I have done at the newest Analytics Demystified weblog: The Future of Web Analytics, Demystified.

What Joseph Carrabis (my partner) and I are doing at “The Future of” blog is creating an opportunity for some of the brightest voices in our community to wax philosophical about where we’re all going and what things will look like when we get there. In the last two months we’ve had excellent conversations started by the likes of Joseph Carrabis (NextStageEvolution), Rene Dechamps Otamendi (OX2), and most recently Mr. Ian Thomas of Microsoft fame.

The unique thing about this web analytics blog is that posts and comments are basically peer; we’re looking for long, well thought out comments that add something to the conversation. And as odd as it sounds we’re not approving navel gazing, fawning, and trackback/ping so that we can keep the conversation moving!

If you’re a long-time reader of my personal weblog I would strongly encourage you to subscribe to The Future of Web Analytics, Demystified. More importantly, if you’ve got a big brain and want to help us work collectively in an effort to figure the future out before we get there, we welcome your comments. Alternatively, if you have a prediction, see a problem, or want help resolving a problem that you struggle with, I’d love to hear from you about being an author in the Future Collective.

All of you who attended my American Marketing Association webcast titled “Web Analytics: A Day a Month” earlier this month, and any of you who missed it, who would like something you can share with others in your organization can now download a (mostly) free white paper on the same subject from Tableau Software. I say mostly free because you have to give some information, and I suspect that when you do, a sales-person may call.

You can request the paper from this URL:

http://www.tableausoftware.com/web_analytics_wp_peterson

Thanks a ton to the nice folks from Tableau for sponsoring the webcast and this short white paper.  If, after you download the document, you have any questions, I’m more than happy to hear from you either through my blog or directly via email.