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.

A lot has been written recently on the hot job market for web analytics positions. Perhaps because there is such a profound gap between the number of open positions and the number of experienced practitioners looking for jobs, web analytics salaries run pretty high. We collected a bunch of data on salaries earlier this year and our report on the subject is available now.

Some of the key insights:

• The average U.S. web analytics practitioner, across all job types (end-users, vendors, consultants, agencies) is reported to be earning $86,883 annually in salary and bonus
• Those of us working for vendors are the best paid, with the average vendor practitioner earning $105,192 in salary and bonus
• Unless you’re working for a very large company (5000+ employees), the difference in average salary is negligable
• There appear to be three “tenure groups” for salary, which may be as much a function that people get raises by switching jobs as they do waiting patiently for a substantial salary increase
• As we’ve published previously, companies relying on defined business processes are paying far better than those relying on employees or those lacking any formal approach towards web analytics
• There may be hope on the horizon for those companies actively seeking experienced practitioners

Because I’m trying to write shorter reports, I’ve also created a companion web page that will allow readers to examine all of the salary data we used to produce this report, segmented over 30 different ways. Hopefully everyone will find this data interesting, regardless of whether you’re looking to hire or looking for a raise. The report and companion data are available here:

• Web Analytics Salaries 2007: Insights and Observations (PDF format)
• Web Analytics Salary Data

I welcome your feedback on this research — your reaction to the data as well as your opinion about the value of our publishing this research on an annual basis. I have to admit I rather enjoy being able to publish this research so hopefully everyone out there is finding it valuable.

UPDATE: I am lame for forgetting to thank June Dershewitz, James Gardner, and Dylan Lewis for spending the time to review this report prior to its publication.  Thanks June, James, and Dylan!

Thanks to Tealeaf I’m excited to be able to present a free webinar on December 11th titled “Who, What, Where, When, and Why: Understanding Visitor Interactions on the Internet.” I’ll be presenting my thoughts on Web Analytics 2.0 and discussing the Web Site Optimization Ecosystem fundamental to helping companies effectively measure and manage visitor and customer experiences in a Web 2.0 world. Plus, everyone who registers will get copy of a whitepaper I recently published sponsored by Tealeaf titled Customer Experience Management and Web Analytics: From KPIs to Customer Transactions.

When: December 11th at 9 AM Pacific / Noon Eastern
Register at: The Tealeaf web site

If you’ve ever wondered about Tealeaf and how their technology is best integrated with your existing web analytics practice I’d encourage you to attend this free seminar.

Apparently statements made earlier this month after the ouster of senior management at WebTrends were not entirely true and the management shakeup is continuing. The latest casualty is the company’s Chief Marketing Officer, Tim Kopp, who according to very reliable sources has “decided to move on” from WebTrends as well, as well as several of Tim’s senior lieutenants.

Having met Tim on a few occasions I have to say this is a huge loss for a company that just sustained (or perhaps inflicted) huge losses. Having been on the company’s board of directors, Tim had an understanding of the space that was rare in this industry. His hand in the MarketingLab 2 release was apparent, and his enthusiasm for the sector will surely be missed.

Perhaps living here in Portland and knowing some of these folks personally I’m too close to the situation but I just don’t understand the logic behind getting rid of this much senior management and talent all at once. This is a tough market and starting over from scratch will be painful for WebTrends.

Regardless, it will be interesting to see what all the anonymous commenter’s who didn’t like Greg, Jason, Tore, and Hamid have to say about Tim’s departure. And perhaps more interesting to see how WebTrends spins this news for the rest of the world …

A number of you have commented that I have been oddly quiet on the subject of Omniture planning to acquire Visual Sciences and then the news that four senior-most managers at WebTrends were let go. It’s not that I don’t have an opinion — I can assure you that I do — but I wanted to take a little time to clarify my thoughts on these subjects before blogging about it.

On the Omniture/Visual Sciences deal, I sincerely do congratulate Josh James and the entire team at Omniture on building a company capable of completely taking out their biggest competitor. Over the years I have found myself having a somewhat topsy-turvy relationship with Mr. James and his organization: First I had to compete with them while at WebSideStory, winning some deals and losing others. Then I worked directly with them while at JupiterResearch, spending time both in their offices and also on their behalf through online seminars and client events. Finally I spent a little over a year competing with them again, this time at Visual Sciences, again winning some deals and losing others.

Regardless of where I worked, it was impossible to not develop a healthy respect for Omniture and their success. It pained me to watch deals like HP, AOL, CBS Sportsline, USAtoday, Overstock.com and others go their way, despite hard work from a talented group of individuals, and I absolutely hated going up against their particular version of salesmanship. But as an analyst it was encouraging to see Josh and John Pestana build a company that understood the underlying technology but also how that technology could make their customers more successful.

Their customers responded to this, and still do. It is not uncommon to meet Omniture customers who have “drank the kool aid” and for whom their customer status is very much a badge of honor. Hopefully Mr. James et al. will deliver the same Omniture experience for the 1,500-odd companies they’re purchasing from Visual Sciences/WebSideStory, because that is where I see the inherent risk in this deal.

All week last week people with a lot of money under their management asked me “what is the upside and what is the risk in this acquisition?” I’m not a financial analyst (disclosure: I don’t have any holdings in OMTR or VSCN) so all I could comment on was what I hoped the combined company would do and not do. And while nobody from Omniture has asked me — not that it would be particularly appropriate anyway — here are a few thoughts on what the new company needs to do to make this acquisition successful:

1. Suck it up and start the migration from HBX to SiteCatalyst immediately. I haven’t read all of the various transcripts on this deal, but nobody I am talking to expects HBX to survive the balance of 2008 if the deal is approved (which I sincerely believe it will be.) Omniture should smooth the transition path by splitting data collection at the gateways now and simultaneously loading whatever HBX-collected data into the SiteCatalyst data collectors, thusly giving HBX customers the easiest possible transition from one technology to the other. And while if I were on HBX I would be aggressively thinking about migrating to the SiteCatalyst code base, this transition is far from a slam-dunk at the customer-level. Splitting the data will give marketing something to show I.T. if they complain about needing to replace the JavaScript (again), and getting started on data collection now will potentially ease some of the pain associated with not being able to migrate years of HBX data that some customers might not want to lose (if that is the final assessment.)
2. Admit that Visual Workstation is the right interface for serious analysts. Again, I have not read the transcripts, but comments I have read are unclear about whether Discover 2 or Visual Workstation will live past the acquisition point. And while I have spent much time looking at Discover 2, I can assure you that of the two, Visual Workstation is the technology to keep (disclosure: I recently entered into a licensing agreement with Visual Sciences to use Visual Workstation at Analytics Demystified.) No disrespect to Omniture’s fine product team, but Visual Workstation is unparalleled for sheer analyst-class power, and I’m fairly sure that without modification Visual Workstaion can leverage whatever format Omniture stores visitor-level data to get up and running quickly. This may cause problems from a pure SaaS-perspective, and I could be wrong, but I suspect that most analysts wouldn’t actually mind having to run the software locally in exchange for having the robust data manipulation capabilities that Workstation provides.
3. As painful as it will be, resolve the internal stuff quickly. A huge potential pitfall in this deal is that it has tremendous potential to create confusion regarding who is managing what, when, where, and how all of these technologies are presented in sales and support situations. Not that this will be easy, any M&A transaction has the potential to be messy, but Josh and Jim MacIntyre won’t be doing anyone favors by sugarcoating what this deal is or being vague about who might be reassigned and who might be let go (keep in mind that these companies that were bitter enemies in the marketplace up until two weeks ago.) Any internal confusion about the transition will inevitably impact customers in the form of unclear deadlines, changing account managers, and other miscommunication that will only open the door for other vendors …

Which brings me to the other change in the web analytics market last week: WebTrends announcing that Greg Drew, Jason Palmer, Tore Steen, and Hamid Bahadori had all been asked to leave the company. I have to admit, I was more-or-less shocked by this announcement, specially given that I have been saying to folks since mid-July that I believe, at least from a software perspective, that WebTrends is finally getting back on track. I really do believe that WebTrends Score is one of the few true innovations we’ve seen in the web analytics marketplace recently, and learned WebTrends users far and wide have commented that they really like the stuff in the MarketingLab2 release.

I should also say that I personally really like Greg Drew and Jason Palmer. Now, I say that not having worked with or for them in any role other than that of an industry analyst, and anecdotally some of the recent flight from the company can be tied back to their leadership. But Greg has always struck me as one of the nicest guys in the entire industry and someone who was willing to do what it took to get the job done.

Regardless of Greg’s personal disposition, I again find myself nearly flabbergasted that the folks at Francisco Partners who are calling the shots would give up Greg and Jason’s experience in the field and knowledge about web analytics in general. I mean, it’s not like Eli Shapira is going to come back and run the company, or that it will be easy to find someone else to run the ship as experienced with web analytics as Josh James from Omniture, Joe Davis at Coremetrics, or Dennis Mortensen at IndexTools. Especially on the heels of the Omniture/Visual Sciences announcement, this whole thing sounds so fishy it’s almost unbelievable, but I have to believe that these four guys will be harder to replace than people think.

Case-in-point: when Jeff Lunsford showed up at WebSideStory sans web analytics experience, some of us were worried. But Jeff was a natural born-leader, and given time it was clear that Jeff had what it took to get the job done. Unfortunately, in retrospect, it is no longer clear exactly what that job was aside from making a small number of people a huge sum of money, and Jeff has moved on to even bigger deals. I liked working for Jeff tremendously, but I’m not 100 percent sure he left WebSideStory in better shape than he found it.

I’ll admit, I don’t have the experience that these guys have … I’ve been running a company of two people for seven months. But just as I felt like WebTrends was well positioned (along with Coremetrics) to be a strong solution with a great customer base, a good set of features, that was incidentally “not Omniture”, I now find myself questioning how strong the organization will really be when run by folks largely new to web analytics. No disrespect to Tim, John, Leo or Bruce, but web analytics is hard, the competition is big and about to get bigger, and sophisticated web analytics buyers will easily differentiate between passion and experience.

Trust me, I want to be wrong about this. I would like nothing more than to have someone clarify what happened at WebTrends and detail how the company is going to accelerate growth against Omniture given their recent momentum. I think despite Omniture’s strength and Google Analytics widespread deployment that the “web analytics wars” are far from over. Like others, I worry that a two horse race isn’t very exciting to watch, and despite believing that “it’s not the technology, it’s how you use it” that it’s nice to see innovation from time to time. For this to happen, I believe we need a strong WebTrends, a strong Coremetrics, and at least a small handful of smaller innovators out there in the world (Nedstat, IndexTools, Clicktracks, etc.) nipping at everyone else’s heels.

What do you think? Am I crazy? Am I just missing the most obvious thing? Am I too close to the situation, having worked with or for all of the companies involved in the past few weeks insanity? Or do you share some of the same concerns I do? Either way, I’d love to hear what you have to say.

I am hugely excited to be able to announce the addition of Daniel Shields from CableOrganizer.com to the Analytics Demystified weblogs. Daniel works for Paul Holstein at Cable Organizer and is an exceptionally bright analytics practitioner, something he has demonstrated time-and-time again in the Web Analytics Forum.

Daniel joins Judah Phillips and I here in the Analytics Demystified weblogs. You can read Daniel’s introductory post and I encourage all of you to subscribe to Daniel’s feed today.

Welcome Daniel!

Gary Angel and the folks at SEMphonic have just launched five more must read web analytics blogs. Check out Gary’s post and subscribe to new web analytics blogs from great people like Joel Hadary, Paul Legutko, Phil Kemelor, June Dershewitz and Jesse Gross. While it’s no secret I am a huge fan of June Dershewitz, I’m very excited after the recent X Change conference to read Joel, Paul, Phil, and Jesse’s work as well.

Props to Gary for getting this uniquely talented crew to share their ideas and experiences. Even if he did call me a monolith, I still appreciate what Gary and Joel are trying to do for the entire web analytics community.

Stephane at immeria has a blurb about Avinash Kaushik’s video on Web Analytics 2.0 and my post this week on Web Analytics 3.0 that I started responding to in a comment. But as typical of me the comment got really long so I will just publish it here and link it to Hamel’s blog.

Stephane, good point that I didn’t explicitly define Web Analytics 3.0 … something for a follow-up post to be sure.

To your point:

“The Web and Internet ecosystem encompass quantitative and qualitative elements, physical and virtual organisms, online and offline interactions that are functioning together within legal, ethical and technological constraints. From that angle, things like a website, competition or location can’t, by themselves, explain the complexity of what’s going on. They can merely improve the science of analysis that will eventually lead to better insight.”

While it is difficult to disagree with you, I think you’re making the same argument that Charlene Li of Forrester made regarding her definition of engagement — she commented that engagement can be indicated at a minute level, such as when a flashy print ad catches your eye. Sure, but how the hell do you MEASURE someone noticing Charlene’s flashy print ad? And how do you MEASURE your legal, ethical, and technological constraints?

Kaushik and I are in near complete agreement about Web Analytics 2.0, and I thought he did a pretty good job explaining it. A lot of people have been saying the same thing as Avinash and I for over a year (Larry Freed pops to mind). An important distinction is that both the Web Analytics 2.0 and Web Analytics 3.0 paradigms are focused on tangible, measurable aspects of our (online) lives. And, in my humble opinion, the measures we take should be practical to make.
So I agree with you, it’s not about “e” business but rather about simply doing business, you’re spot on there. But here is the problem:

Web Analytics 1.0 was a full-on after-thought … not just for companies like yours but for the entire Internet. First we had web sites then later (more or less in 1995 if you believe most time-lines) we had measurement tools built to hack web server log files (poorly) and to try and cobble together some semblance of visitor behavior. A ton of R&D and money has gone into refining Web Analytics 1.0 and today we have JavaScript page tags and sophisticated applications that are basically still an after-thought for most companies.

Web Analytics 2.0 is also an after-thought, at least for the most part. I mean, we’ve had the qualitative data in systems like ForeSee Results and Tealeaf for years, so why is it only now that we’re actively talking about combining these data into a more holistic view of the visitor? We’ve had multivariate testing systems like Offermatica and SiteSpect for years, so why is it only now that we’re actively talking about using the combination of qualitative and quantitative data to drive action? (FYI, you can download my Web Analytics 2.0 presentation from my web site if you’re interested in more of my views on the subject …)

So I guess what I’m getting at by talking about Web Analytics 3.0 at this early stage is this:

Wouldn’t it be nice if the global solution to measuring the inevitable state of “digital ubiquity” wasn’t another after-thought?

Wouldn’t it be sweet if the platform providers and device manufacturers, the standards bodies and the compliance police, all came together now instead of 10 years from now and asked “How in the world will we measure all of this?” Personally, I think so, that’s why I’m starting the conversation more-or-less five years ahead of time, so that this time we’re not all standing around trying to figure out how to answer good business questions using incomplete and inaccurate data.

Call me crazy …

So yeah, I am probably still right and wrong. And yes, you make a good point — Kaushik and I were both caught navel-gazing (again!) But if in 5 years you and I are banging around in the Yahoo! group asking people whether the “Nokia X5150J Revolution” accepts cookies and JavaScript I am going to be awfully put out, aren’t you?

Thanks very much Stephane for offering up an opinion other than “Eric and Avinash are both brilliant!” The ego stroking is great but this kind of stuff needs to be debated, openly and honestly in my humble opinion. Beers are on me in D.C.

If you’re reading the web analytics blogs, you’ve probably already heard about the recent presentations I’ve given on the subject of “Web Analytics 2.0”. The future of web analytics and the relationship between Web 2.0 technology and measurement is something I’ve been talking about for over six months — I actually have a Web Analytics 2.0 workshop that I regularly give that you can read about under Analytics Consulting on my site — but given that it is “conference season” it is no wonder that this subject is getting attention from other folks in the industry. I have given my presentation at Web Analytics Day in Brussels, SEMphonic X Change in Napa, and will be giving a variation on same at Jim Sterne’s Marketing Optimization Summit in October.

Due to demand, you can download a PDF of the presentation from the white papers section of my site. If you’re interested in learning more about Web Analytics 2.0, please give me a call and I’d be happy to discuss it with you.

Strangely enough, the slides that are generating the most interest and commentary are not those about the Web Site Optimization Ecosystem, the integration of quantitative and qualitative data, or the Analytics Demystified RAMP, but rather the few slides I included outlining my thoughts about Web 3.0 and what I am calling Web Analytics 3.0.

What the heck is Web Analytics 3.0?!

Before I can tell you what Web Analytics 3.0 is, I need to tell you what I think Web 3.0 is going to be. The good old Wikipedia basically dodges this by saying:

Web 3.0 is a term that has been coined with different meanings to describe the evolution of Web usage and interaction along several separate paths. These include transforming the Web into a database, a move towards making content accessible by multiple non-browser applications, the leveraging of artificial intelligence technologies, the Semantic web, the Geospatial Web, or the 3D web.

While I know that Judah is all hopped up on the notion of the semantic web, after having traveled to Tokyo and Europe in the past month, I find myself absolutely convinced that the next technology era will be characterized by our collective ability to access the Internet anyplace, anytime, using so many devices we begin to look back on computers much the same way young people do television today — as something nice to use when YouTube is unavailable. Rolf Skyberg, a disruptive innovator from eBay who I met in Rotterdam a few weeks back, called it “digital ubiquity” — the point where we forget that the Internet actually exists and take our ability to access information completely for granted.

Given so many sexy alternatives — 3D web, transforming the Internet into a database, artificial intelligence, and the such — why am I so convinced that in the next three years we’ll be talking about Web 3.0 when we talk about mobile phones and non-traditional browsers?

Easy. The financial opportunity available via the mobile Internet makes the billions transacted today look like pocket change.

Think about it:

• Most people in the U.S. haven’t seen QR codes in advertising yet, but they will.
• Most mobile users around the globe don’t have access to a brilliant browsing experience through their phones, but they will.
• Most marketers aren’t advertising on mobile platforms yet, but they will.
• The most-loved company in the world isn’t in the mobile market yet, but they will be.
• Most mobile platforms aren’t passing the phone number (or a derivative) along with HTTP requests, but they certainly could.
• Most mobile platforms aren’t passing along GPS coordinates along with HTTP requests, but they certainly could.

Just think for a minute about how your browsing experience might change if the web sites you visited remembered you and delivered a tailored experience based on your demographic profile (theoretically available via your phone number), your browsing history (accurate because you’re not deleting your phone number) and your specific geographic location when you make the request?

Now think about how the advertising buying experience would change if the same were true, not to mention behavioral targeting. I mean, given GPS and demographic data, the behavior being tracked could be “works downtown during the day, checks Facebook on his phone often, lives in the suburbs, surfs sports scores from his neighborhood bar.” The Starbucks web site could have a link at the top with a coupon to save $1 on my double-tall non-fat latte in stores 1 block, 2 blocks, and 5 blocks from my current location; the Best Buy web site could have an in-store promotion for the store I am standing in, targeted to my age and gender; and my search engine could disambiguate my searches based on my demographic profile, my geographic location, and my recent search history to serve me paid search ads designed to influence my geo-spatial movement, not just my likelihood to click.

Jeepers, huh?

Sure there are privacy issues, but given the intensely personal relationship most people have with their cell phones, and the fact that far more people in the world have mobile phones than computers (Gartner estimates 271 million units sold to end-users by Q2 2007) it is easy to make a convincing case for mobile computing and digital ubiquity defining the next technology era, much like social networking, AJAX, XML, and mashed-up business models define the current Web 2.0 era we’re living in today.

Okay, mobile is the future. So what the heck is Web Analytics 3.0?

If Web Analytics 1.0 was all about measuring page views to generate reports and define key performance indicators, and if Web Analytics 2.0 is about measuring events and integrating qualitative and quantitative data, then Web Analytics 3.0 is about measuring real people and optimizing the flow of information to individuals as they interact with the world around them.

Your log file analyzer can do that, right?

The current state of mobile measurement isn’t about Omniture and Visual Sciences, it isn’t about JavaScript and cookies, and it isn’t about page views, visits, and visitors. Web Analytics 3.0 is going to be something completely different, and it will depend on completely new technology. Anil Batra and I talked about a project he did a few years back while he was at digiMine — he hacked together WAP gateway logs into a pseduo-log file, using the phone number in place of a cookie. Brilliant, and the fact that Anil has this experience propels him to very near the head of the class for Web Analytics 3.0 analysts.

In theory, the mobile Internet has many of the same measurements as the hard-wired Internet. But as the information the platform and device providers make available changes, something I very much believe will happen, the quality and volume of information at our disposal will increase and improve. The W3C document on “Mobile Best Practices 1.0” already exists but surprisingly enough don’t have a section about logging requests or measuring user interaction. M:Metrics is out there providing analyst reports, but the service is more similar to comScore and Nielsen than WebTrends and ClickTracks.

This post is already extremely long but I wanted to start the conversation. In future posts, as time allows, I’ll expand on some of what I believe is possible and how. In the interim, let me know what you think! Am I wrong? Is Web 3.0 bigger than mobile? Or do you already have a handle on measuring your mobile content, even without GPS and phone numbers as unique IDs? Do you personally have experience doing analysis on mobile content? If so, I’d love to hear about your experience.

As usual, I very much welcome your comments but am happy to receive your comments directly via email. Also, if you’re a mobile service provider or device manufacturer concerned with how advertisers and marketers will measure their success through your platform, application, or device, I would love to talk to you about the Analytics Demystified vision for Web Analytics 3.0.

UPDATED: Apologies to Ian Thomas but I forgot to indicate where BETA 1 screen shots stopped and where future releases began as he related this information during his presentation. Please see the note inline below and again, apologies to Ian!

Ian Thomas from Microsoft was in Brussels, Belgium today showing off some screen shots of the upcoming Microsoft Gatineau product. The following are exclusive screen shots of the product, sans commentary per my agreement with the ever-so-nice Mr. Thomas. If you’d like to be considered for the Gatineau BETA, please either visit Ian’s blog at http://www.liesdamnedlies.com or fill out the form at http://advertising.microsoft.com/gatineau

Thanks again to Ian for letting me bring these to light and best of luck with the BETA launch!

UPDATED: The following screen shots include visualizations that Mr. Thomas indicated would be in future Gatineau releases.

Again, if you’re interested in signing up for the Gatineau BETA, please go to http://advertising.microsoft.com/gatineau. Any questions about these screen shots or the product images should be addressed to Ian Thomas via his weblog (http://www.liesdamnedlies.com)

(I wrote this post a week or two ago and had WordPress issues so am re-posting it.  Sorry about that Judah!!!)

One of the smartest things I did in 2007 so far was not quitting my job (although I do very much enjoy the independent life and my clients are all great!) but rather asking Judah Phillips of Reed Business Interactive to blog here at Analytics Demystified.

I met Judah just after I left JupiterResearch in Boston and was immediately impressed with his expansive knowledge of the web analytics sector, his candor, and his communication skills.  We didn’t talk for awhile but reconnected while I was at Visual Sciences, picking up the conversation and getting to know each other better.  This time he blew me away with his ability to sift through the noise and make an incredibly complicated software buying decision, all while being exceptionally honest and candid about his process.
After his selection was made, he and I kept up the conversation and were talking with some regularity at the same time I was thinking about expanding on Analytics Demystified’s blogs and adding other voices to my site.  I was especially looking for practitioner voices.  Judah was perfect, and he was open to the idea.

The rest, they say, is history!

Judah is a big thinker and a ton of fun to spend time with (alas, he lives in Boston, although Alaska Airlines is starting to fly direct to/from Boston later this month!)  If you’re like me and not lucky enough to be part of his Boston Web Analytics Wednesday group, I strongly recommend that you start reading and subscribe to Judah Phillips today!

I just wanted to publicly say “thanks” to Judah for exceeding any expectations I had about his writing and his commitment to sharing his knowledge and experience with his readers and mine.  Now if only all the decisions I had to make as a small business owner were that easy!

Last night in Tokyo I was griping about how there is very little open debate and disagreement in the web analytics blogging community and how interesting I found the response to my post about Technorati being a poor source of data for any blog ranking methodology.

Then I read Gary Angel’s post “Never Send a Machine to do a Man’s Job” …

I fully retract any complaint about a lack of debate and disagreement, especially the disagreement part.  And while I appreciate Gary’s sentiment a great deal, I’m almost more interested in seeing what everyone else thinks about his post.  Gary doesn’t pull any punches.
Anyway, thanks again to everyone who commented on the Technorati study.  It was a nice reminder about how many great, bright, and thoughtful people read this blog all around the world!

A few days ago my friend Avinash Kaushik wrote and asked me for my Feedburner subscriber numbers as an input into his very popular ranking of web analytics blogs. It gave me an opportunity to do something I’d meant to do for awhile — request that Avinash drop my site from his ranking system (which he agreed to do, thanks Avinash!)

I asked Avinash to drop me from the rankings for two reasons:

1. I’m pretty well established as a web analytics blogger, having done this for a pretty long time. I started blogging about the topic while I was at JupiterResearch back in 2004 and have been writing basically the same blog at a variety of URLs continually since that time. I figure it’s far better for Avinash’s list to highlight some newer folks in the web analytics blogosphere — great writers like Ian Thomas, Gary Angel, Judah Phillips, and Aurelie Pols!
2. Technorati, which Avinash uses as the basis for his ranking system, is an extremely poor data source for ranking weblogs.

While it may be a unique source of this type of data, Technorati provides a lousy basis for accurately ranking blogs and appears to be very easily fooled by anyone actively working to increase their Technorati ranking.

Why would I say such a thing, you ask? An excellent question, but I have what I think is a pretty good answer (especially if you’ve ever had any concerns about the quality of data you use in your analysis …)

First, and maybe this is something I’m just being dumb about and is easily corrected, if you’ve had a blog for any amount of time and have moved URLs for any reason, Technorati seems incapable of re-grouping URLs for a single blog. Have a look at the following:

As you can see here, based on a search for “web analytics” grouped using the “Blogs” tab in Technorati, my blog shows up as two distinct entries from two slightly different URLs. Both have slightly different levels of authority. When you drill down into “authority” which seems to provide at least partial basis for the ranking system Technorati uses, you’ll see slightly different results for each of these URLs:

The first blog URL lists “437 blog reactions to Analytics Demystified”

The second blog URL lists “461 blog reactions to Analytics Demystified”

What’s worse is that the exact same blog and the exact same content appear further down the same page of results:

Here the blog URL is http://www.analyticsdemystified.com/weblog which was the original blog URL back when I was on the Blogger platform. Perhaps because this is the oldest URL Technorati has in the system, this URL has the greatest reaction:

Now, I wondered if perhaps each of these listings were de-duplicated and could perhaps be added up or something — no such luck it appears. There is a ton of duplication and thusly my blog is pretty much just broken up into three pieces which certainly must make it hard for anyone trying to assess the overall reaction to my writing over the past 3.5 years.

I asked around a bit to see if anyone knew why this happens, and Judah Phillips (who admits he’s been watching his Technorati ranking lately given his relative newness to the blogosphere) pointed me to this entry in the Technotati FAQ:

http://support.technorati.com/faq/topic/56

Just in case you don’t want to read the FAQ entry, I will summarize: You are more or less out of luck. According to the FAQ “we are unable transfer or combine links from different URLs at this time.” I suppose their answer makes sense, but it doesn’t make how Technorati treats blogs that have moved any more useful or appropriate.

Oh well.

The second problem I have with Technorati is that it is either not paying very close attention to where these “blog reactions” are coming from or the system is very easily gamed. Consider the blogs in the number 2, 4, and 5 slots when you search for “web analytics” blogs at Technorati:

There is my friend Avinash, Mr. Marshall Sponder from the Web Analytics Association and KnowMoreMedia, and the entire team at FutureNow, Inc. This is what you expect to see based on Avinash’s ranking system (although I think he might be excluding the guys from FutureNow, I’m not sure …) given that, according to Avinash:

“The evolution of the ranking system continues with a couple of tweaks to the ranking this time around. The primary determinant of the rank in the list below is still Technorati (click here).”

The problem arises when you start to examine the sites that make up the Authority calculation:

Here you can see that Avinash (who is widely loved, I love Avinash too!) has done a great job at generating reaction to his blog, getting 6,013 sites to link back to his content and having a Techorati “authority score” of 948. Very cool … that is until you start to examine the actual sites and blogs linking back to Avinash, at which point you notice something like this entry (#10 on the first page of results when I snapped this screenshot):

Hmmm, that is from Avinash’s own site. That’s odd, isn’t it, that Avinash’s own site would be included in his authority calculation? I thought so, so I quickly looked at the first ten pages of results:

What I found was that 44 percent of the top 50 sites listed as providing “blog reaction” to Occam’s Razor were Avinash’s own (albeit slightly different) URLs.

I’m not sure why that is, do you know?

I figured this might just be some strange anomaly so I took a look at the same thing for Marshall Sponder’s blog, WebMetricsGuru. Marshall didn’t seem to have the same problem, fortunately, but of the 52,152 reactions to Marshall’s blog contained in Technorati, it appears that the dramatic majority come from un-targeted links to his site from other KnowMoreMedia properties:

Similar to the problem with Avinash’s listing, 80 percent of the top 50 sites listed as providing blog reaction to WebMetricsGuru were from KnowMoreMedia. When I continued looking at the results, this percentage actually went up to 83 percent of the top 100 sites “reacting” to Marshall.

I might be thinking about this the wrong way, but that hardly seems like the kind of “reaction” most bloggers are looking for.

Well, at this point I had to look at the Eisenberg’s blog which is a little newer in the blogosphere. Here I saw the exact same problem I found in Avinash’s listing, 34% of the top 50 sites listed as providing blog reaction to GrokDotCom are from, yep, you guessed it, GrokDotCom.

I also noticed that in the GrokDotCom authority listings that some sites appeared again and again and again:

Again, I don’t know what’s going on here but as the basis of “blog popularity” this data seems pretty suspect to me.

Perhaps I’m naive, or perhaps I’m just plain confused here, but the Technorati ranking system doesn’t seem to provide very useful results based on the inconsistency I am describing. Maybe I just happened to stumble on three anomalies — other blogs listed in Avinash’s ranking don’t seem to have the same problems but some surely do. For what it’s worth, none of my three blogs (?!?) listed in Technorati appear to have the problem described above — maybe that’s what I’m doing wrong!

Now perhaps I am thinking about the authority calculation incorrectly. According to Technorati:

“Technorati Authority is the number of blogs linking to a website in the last six months. The higher the number, the more Technorati Authority the blog has.

It is important to note that we measure the number of blogs, rather than the number of links. So, if a blog links to your blog many times, it still only count as +1 toward your authority. Of course, new links mean the +1 will last another 180 days.”

This sounds good and kind of makes sense, except that you can see where KnowMoreMedia is kind of cheating Marshall by having all those completely irrelevant links back to his blog that artificially run up the number of “blog reactions” and likely his authority score.

Also, I kept finding examples of blogs that when I looked at the blogs linking to them, I kept finding the same problem described above — the blog being assessed linking back to itself. Here’s an example from one of the posts/pages on Avinash’s site that has an authority ranking of “12”:

You can’t see all of it but there are 13 reactions to Avinash’s post, and given Technorati’s ranking you would expect 12 different blogs, one of which would have two posts linking to the page, right? Wrong. What you get is five different blogs, two of which are Avinash’s own work (albeit in two different domains) and three of which (the “SEO, SEM, Social Media, web analytics” listings in the image above) appear to be the exact same content in different domains.

If you examine the URLs in the authority listings that come from Avinash’s site, you’ll see that they all have slightly different URLs. But clearly they are all from the exact same blog. If, based on the FAQ answer I gave above about why my blog is listed three times, this is how Technorati is calculating authority … essentially Technorati is saying that every distinct URL is a distinct blog.

Huh?

Seems like a pretty easy system to “game” to me, or one that is easily fooled and mostly useless. At this point I’m even more confused about Technorati’s ability to de-duplicate blogs as an input to their authority ranking.

Please don’t get me wrong, I think Avinash is brilliant for publishing a list of popular blogs (especially one that ranks his own site as #1, how amazing and magnificent is that!) I have learned to respect Marshall Sponder’s ability to write (and write, and write, and write) and I obviously get on well with Bryan and Jeffery Eisenberg (Bryan is one of Analytics Demystified, Inc.’s trusted advisors.) And I sincerely, sincerely hope that each of these fine gentlemen will see that this blog post is far from a criticism of their talents and passions.

But given that I’ve always worked with my clients to make sure they had the best data possible to serve as inputs for their analysis, something about the data reported by Technorati just doesn’t pass the “old smell test”.

Honestly, if anyone out there can help me understand what Technorati is doing and why a ranking system that is apparently so easily corrupted by self-reference and link farming is useful, I’m more than happy to hear from you! Feel free to email me directly or simply comment on this post. Until that time, I will view any ranking system based on Technorati data as quite suspect.

Perhaps you will as well …

I welcome your comments, criticisms, insights and feedback. If someone from Technorati wants to email or call me and explain what the heck I’m doing wrong and why everything I’ve written in this post is incorrect, I’ll gladly listen. And if the answer makes sense to me, I’ll even more gladly apologize for being so confused! If you think I’m carping, whining, or just being critical of Technorati’s data for no good reason, let me hear it! Frankly I sometimes worry that we don’t have enough engaged, thoughtful debate in the web analytics blogosphere …

Five little words: Rand don’t pull no punches.

Don’t believe me? Check out some of the commentary Rand offers up about his former employer (and mine, Visual Sciences/WebSideStory) in an interview just published with Eric Enge of Stone Temple Consulting. I only wish Eric would have conducted the interview in the last few days following Visual Sciences announcement that they are going to miss Q2 earnings by a few million dollars (OUCH!) and they’ve retained Goldman Sachs to help them shop the company, just to see what Rand would say.

Rand and Eric even discussed me of all people, with Rand offering up:

“Eric Peterson and I have been in two companies together. WebTrends, and WebSideStory, and we certainly worked together very closely when he was an analyst at Jupiter. We know each other pretty well. Eric and I don’t always agree on everything. I come from a pure solutions point of view, because my DNA is in marketing. I know what I want to achieve with these applicaitons, and Eric has an approach to these things more from a technology point of view. But, more and more, his point of view and mine are becoming very similar. I respect him, because he will tell you what he thinks. We’ve had our differences, but he and I are good friends, and I think it’s good to have differences. It makes the world go round. I think he is going to do really well as an independent by the way.”

While our time together at WebTrends was non-overlapping, and I would more or less describe our close work together while I was at Jupiter as, um, confrontational, I more or less agree with everything else he says in this paragraph (not the entire interview!) And yeah, we drink beer together and have funny conversations about industry folks and he has a unique sense of perspective that most people don’t have, so yeah he and I are friends.

Oh, and I appreciate his vote of confidence regarding the formation of Analytics Demystified.

Wait, what? You don’t know who Rand Schulman is?! You’re kidding me! Rand is an icon in the web analytics industry and, if I may say so, has one butt-kicking web site for his private venture, Rand Schulman Partners.

Anyway, thanks Rand for the nice comments and I certainly wish you and Unica all the best out there. Judah loves your stuff, that’s for sure.

I just happened to write my contact at comScore today asking about their follow-up report on cookie deletion.  He said it would be out today and here it is:

http://www.comscore.com/request/cookie_deletion.asp

This report does a good job of providing additional data and information about the comScore methodology in this report, something missing from the press release and critical to our collective understanding of cookie deletion.  This report explicitly addresses anti-spyware and the differences in third- and first-party cookie deletion, essentially showing that there is an anti-spyware effect but it is minimal compared to manual cookie deletion which appears to be the primary culprit.

comScore also presents some of the attitudinal data they alluded to in their press release, essentially confirming what I first reported at JupiterResearch in 2005 … that most consumers aren’t really sure what cookies do.

Since I last saw the report they added a few sections — one on international traffic and one on cookie blocking.  While the section on international doesn’t add much to the conversation other than to explain why panel-based and log-based systems numbers differ (something that should be fairly obvious), the cookie blocking data is pretty interesting.

According to comScore, if your web analytics application falls-back to an IP-based value for unique visitor identification in the absence of a cookie being successfully set, you’re likely worse off than you are simply dropping those visitors.  Their table on page 15 shows that due to dynamic IP assignment that the average home computer has 10.5 different IP addresses in a month.  Yikes!

If you’re into this stuff, or if you’re interested in how much cookie deletion might be impacting your own audience measurement, you should download the report and give it a careful read.  It certainly doesn’t provide a solution to the problem, but often times knowing is half the battle.

http://www.comscore.com/request/cookie_deletion.asp

I welcome your feedback on the report and the usual comments and criticism.

In San Francisco during the “Guru Breakfast” event Rene Dechamps asked a question about the importance of process to web analytics. This is clearly something I believe to be tremendously important (quit my job, printed business cards, etc.) and Bryan Eisenberg commented that “web analytics was 10 percent technology, 20 percent people, and 70 percent process …”

Rene said he would post the video he took of this conversation soon, but suffice to say Avinash Kaushik, Jim Sterne and I all agreed with Bryan. Process is very important to web analytics, but the importance of process is often overlooked.

Recently a reporter got me thinking about these numbers, so I would like to formally propose an update to beloved guru Kaushik’s widely quoted 10/90 rule. I call it the 10/20/70 Rule for Achievable Web Analytics Success. Here is what it says …

• Our Goal: Highest value from our investment in web analytics
• Percent of time and effort spent on the selection and deployment of their technology platform: 10%
• Percent of time and effort spent on the hiring and allocation of really smart people: 20%
• Percent of time and effort spent on the process of actually “doing” web analytics, leveraging both technology and people: 70%
• Bottom line for Achievable Success: It’s the process

The explicit recognition of the value of process resolves some of the issues people have with Kaushik’s original proposal, two of which include:

1. It is very difficult to spend $90 of every $100 on “intelligent resources/analysts” given the extreme dearth of available talent relative to the number of jobs currently open in the market today. Even Kaushik’s former organization (Intuit) is, to the best of my knowledge still looking for his replacement, several months later, ironically highlighting the difficulty of finding good talent.
2. Unless you’re gonna go the Google Analytics route (spending $0 on technology) and hire inexpensive resources to install the software (likely not one of the GAAC partners, although I’m not entirely sure what they charge) you’ll be hard pressed to spend $10 of every $100 on software license and implementation.

Now, I obviously agree with Avinash’s emphatic call to hire smart people. I’m a huge fan of dedicating resources to web analytics projects and have been since 2004 when JupiterResearch published my report Web Analytics: Spending, Staffing, and Vendor Selection. You need bright people to run your web analytics applications and to analyze data (although you may not need the people you think you need … more on that in another post at another time!)

But I think that the right way to frame the right approach to web analytics is not in terms of how you spend your valuable money, it’s how you spend your valuable time. So the 10/20/70 rule updates Kaushik’s rule by applying the appropriate emphasis squarely on the processes involved in “doing” web analytics.

Remember, you can always make more money, but it’s hard to make more time. Fortunately, some pretty bright people seem to agree with me.

Consider this: The technology involved is largely the same, especially at the level of need that most companies currently have from their web analytics solution. And while people are a good proxy for true process, in my experience too great of a dependence on people can cause two substantial problems:

1. If the people are not the right people, the organization may not realize there is a problem until a great deal of money has been spent and a great deal of time has been wasted
2. In my recent web analytics survey (results coming very soon!) we found that HALF of all respondents having web analytics experience had considered taking a new job in the last six months

So in the absence of process, some companies end up hiring unqualified people, hiring the wrong people, or hiring people who jump ship when the next best offer comes along. Certainly this is not the case with all companies, but until your organization has clear expectations about the goals for your investment in web analytics and how you plan to achieve those goals, technology and people will only get you so far.

I know, I know, I said to hire people and everything would be fine. It will be fine, but with process, you can be better than fine. You can make money. Piles of it.

So if you think your company is not following the 10/20/70 rule, here is my humble recommendation for you to consider:

1. Take whatever technology you have already deployed, until you’re good at web analytics the technology doesn’t really matter
2. Gather your key site stakeholders together
3. Ask them to share their experience and understanding of web analytics thus far
4. Document the gaps, looking for statements like “concerns about data accuracy”, “problems with data collection”, “not getting the right reports”, “reports are not actionable” and “concerns about how effectively we’re using web analytics tools”
5. Pick any typical site process such as launching a new campaign or deploying a new page or micro-site
6. Diagram the process you picked in step #5, highlighting decision points, tasks, and sub-tasks
7. Determine where measurement fits in the diagram you produce
8. Ask yourself if measurement, reporting, and/or analysis always happens in the places you’ve identified
9. If not, ask yourself if the lack of measurement, reporting, and/or analysis results in the stakeholder concerns discovered in step #4
10. If so, add measurement, reporting, and analysis to your diagram and make sure to follow the new diagram/process/checklist every time!

Still on the fence? Here are some questions for you to consider:

1. If you have spent $10 of every $100 on technology, are you successful in getting most of your questions answered?
2. If you answered “yes” to question #1, are you sure you’re asking the right questions?
3. If you’re trying to spend $90 of every $100 on people, how exactly is that going for you?
4. If you answered “great” to question #3, are you sure you’re not paying too much?
5. If you have great technology and great people, what is your web analytics ROI?
6. If you don’t know the answer to question #5, why not?
7. If you have dedicated analysts on your staff, what percentage of their time do they spend generating reports and attending meetings vs. producing analysis and managing experiments?
8. If you answered “too much reporting and meetings” to question #7, why do you think that is?
9. If you have thought about the process of doing web analytics, do you have a checklist or business process diagram for the core processes?
10. If you answered “huh?!” to question #9, call me.

Obviously my clear bias is for companies to invest in the process of doing web analytics. But professionally I have spent a great deal of time looking at this problem from all possible angles. And every time the answer is the same: The companies that invest their time refining how they actually “do” web analytics get more out of their efforts than companies who simply invest their money.

As always I welcome your comments and criticism.