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Jim Sterne is the president of the Web Analytics Association and producer of the eMetrics Summits. We asked him a few questions about the state of the industry and how companies could be making better use of their analytics data.
How well are companies doing Web Analytics now, compared to a year or two ago?
In two years, there’s been a lot of progress. It’s been great. But asking how well companies 'get' web analytics is the same question as asking how well companies get being online. Some get it really well, and some remain clueless.
We were in Stockholm a few weeks ago for eMetrics and there was a panel session about which countries were in the lead. Online, people said the US, then the UK, Scandinavia, Germany and so on.
But in web analytics, everyone agreed that among leading companies, some are doing fabulous things and some don’t have a clue, and that’s pretty much evenly distributed across the world.
There has been a lot of talk about where Analytics is heading – marketing optimisation, Analytics 2.0, Multi-Channel Analytics and so on. What should companies be prioritising?
The first thing to do is take a baseline of what is happening on your website - how much traffic there is and which pages are the most popular - and use it to optimise that online experience.
At the same time, use what you are learning online to optimise all of your marketing. That’s why the eMetrics Summit is now the eMetrics 'Marketing Optimisation' Summit.
You can learn so much on your website about what people are interested in – which messaging and offers they respond to. It applies to your direct marketing, telemarketing, your stand at a trade show. It’s a great tool for doing market research.
Which types of companies are at the cutting edge?
It’s happening in the smartest companies. Most of the largest companies are not the smartest companies – they are just too big to communicate with each other internally.
Then there are very small companies that are very agile. They are climbing all over Web 2.0 and measuring social media and are very interesting.
They have seen they have a business intelligence department already and are showing them web analytics data.
They are adding that to the mix, looking at how you can match online behaviour with purchase history on the high street or catalogues, customer care calls and sales force automation contact management and seeing what patterns emerge.
The absolute cutting edge people are recognising that web analytics people have a different approach to data than other people. Web analytics people look at the data from a very tactical perspective. They see a particular market segment coming to a website for a particular reason and think about how to optimise that process for that segment.
The business intelligence people look for patterns in the data and ask big questions. When the web analytics people start to look at business intelligence data from the perspective of optimising processes, it brings new talent to the data and starts to get very interesting.
How many people are doing that?
Nobody is willing to talk about it! It’s very cutting edge and certainly not very widespread...
Is politics one of the biggest reasons for that?
Yes, there’s no way around it. The most switched-on senior executives with budgetary power are the ones that will be able to take advantage of this first.
It’s modern day rocket science. It’s not something you can just buy and plug-in, but there’s competitive and disruptive advantage to be had if you can master this stuff.
Now we’re two years on from the launch of Google Analytics, what’s your opinion of how that has impacted the sector? Is it eating into paid-for analytics tools’ market or is it mainly being used as a secondary tool by big customers?
It’s doing both. For example, Instadia – a small company in Europe with a workmanlike product – was marked for extinction. Lucky for them, they got purchased (by Omniture).
Other vendors are looking to create a unique sales proposition that sets them apart from Google, so they can say ‘when you have finished playing with the Google toy, come and buy a real solution that won’t cost you very much’.
Then there are the likes of WebTrends, Omniture and Coremetrics, who are at the top table.
How many blue-chips do you reckon are using Google Analytics?
I’d say all of them are. It’s a fabulous tool for a small department or division to do some guerrilla measurement. Instead of going to IT, I can just tag my own pages.
Everyone is using it for a variety of things and it’s great value, but it won’t stop people buying the big products.
Have you had a look at Microsoft’s Project Gatineau yet? What impact might that have?
I have seen the demo and it looks flashy and great. It’s for the same purpose as Google Analytics – proving to you that the money you spend with Microsoft for advertising is well spent.
So it’s based on a perfectly sound business model. Is it going to work? I’m sure it will. Is it going to knock the socks off anything? No. It’s not intended to.
The question here is how much does Google invest in Google Analytics before it reaches the point where you can’t use it any more without a consultant? That’s an anathema to the goals of scaleability.
How big an issue is the skills shortage for the industry, and what are you doing at the WAA to try and address that?
What we see is vendors busily training clients on how to use their products, and the ones that are really good at it get hired by the vendors. The ones that are really good at that turn into consultants. It’s a never-ending treadmill.
We’re doing an industry survey to see what skill sets are needed, as well as a salary survey and are trying to stay in tune with what is going on.
Primarily, the thing we have done very well is the education side of things. We’ve spent three years putting together a college-level curriculum in conjunction with the University of British Columbia. That’s sold out every time it’s been offered as there’s nothing else available.
Now, the University of California has opted to license that material and incorporate it into its business intelligence courses.
That’s the only thing out there – you can learn web analytics by doing it or from the vendors themselves, or you can take this class.
On the subject of resourcing, Avinash Kaushik wrote a blog post where he put forward a 90/10 rule, where £9 should be spent on 'intelligent resources and analysts' for every £1 that goes on tools and professional services from vendors. Would you agree with that?
It depends. If web analytics is critical to your survival and you are doing a large percentage of your sales online, then that would be a good rule to follow.
If you are a small business, then you can’t. If you’re mid-sized, you will be faced with questions about whether you hire or go outside for a consultant. The consulting ecosystem is growing very strongly.
If you go to vendors’ websites and look at the partner page, wou will see a growing list of third party consultants that can help you.
There are people who will help you crank out your reports, there are people who will help you analyse the data, and there are people who will help you understand how to read results and make business decisions. At the top are the people that just do strategy.
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