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It's been heartening to hear the feedback for our latest Online Measurement and Strategy Report which we again published in association with web analytics consultancy Lynchpin last week. We knew we were on to a good thing when Avinash Kaushik encouraged his army of Twitter followers to download the report.

And we were equally delighted to get some additional insights from Jim Sterne, another influential web analytics author and, among other things, the founder of the eMetrics conference series.

The report makes it clear that many companies are still not getting enough value from the mountains of online data available to them.

The research, based on a survey of more than 800 digital marketers, found that just one in five companies (22%) has an internal strategy that "ties data collection and analysis to business objectives" and only 27% say their web analytics "definitely drive actionable insights", showing very little improvement since last year.

On reading the report, Jim Sterne asked: “Is the glass a quarter full or three quarters empty?”

He said:  “One half of me cringed in pain that so few are doing so little with so much. My other self lit up like a light because there's so much more potential yet to reap. It seems there is still plenty of upside.”

The good news in the report was that companies are, proportionately, investing more in human resources around web analytics than they are on licences.

I love Jim Sterne’s metaphor: “Web analytics reports are just lumber. It takes an architect, a designer, a builder and a lot of other skills to turn it into a house.”

We are nowhere near the Avinash Kaushik rule of thumb which suggests that $90 should be spent on people power for every $10 spent on technology. But there has definitely been an improvement. 

Jim added: “The good news - the quarter-filled news - is more budget being allocated to people. This is analysis not manufacturing. These are mental tools for people, not extruders that pump out business insights. The more spent on people, the more increased revenue, lowered costs and better customer satisfaction.”

Worryingly for web analytics vendors, the research found that less than 50% of respondents believe they are enjoying ROI from their paid-for analytics tool.

But Jim Sterne believes that businesses typically need to undergo a “serious perceptional shift.”

"It makes me wonder how they approach other tools: ‘We have not gotten any ROI out of this hammer'.‘This spreadsheet software hasn't paid for itself yet'.  ‘Don’t know why we bothered buying this pencil. It just sits there'."

Jim was also concerned that the majority of respondents say they have to deal with data from different sources which are conflicting. 

Another nugget from Jim is that, almost by definition, “all data are messy”.

This is the nature of the universe. Two plus two equals four only in theory and never in practice. When we stop expending resources on what is precise, we can focus on that which is indicative, informative and compelling.

We have a long way to go to understand that web analytics is a thinking man's tool, not a solution unto itself. On the bright side, 73% of those surveyed might still figure out that web analytics can help them drive actionable insights one day.”

There is more information in the report about the use of Google Analytics and the use of this tool compared to paid-for web analytics. The Online Measurement and Strategy Report 2009 (in both pdf and summarised PowerPoint format) is available to Econsultancy subscribers or on a pay-per-view basis.

That Avinash Kaushik Tweet in full ...

The only report U need on online measurement & #wa http://tr.im/nW8B D/L sample report.Why good? Pragmatic, 100% sourced fm customers, no BS.” 

Please note: Econsultancy will be running a Breakfast Briefing on 9th July 2009 to help companies get the most out of Google Analytics.

https://econsultancy.com/events/getting-the-most-out-of-google-analytics

Linus Gregoriadis

Published 16 June, 2009 by Linus Gregoriadis

Linus Gregoriadis is Research Director at Econsultancy. Follow him on Twitter or connect via LinkedIn or Google+.

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Comments (2)

Matt Isaacs

Matt Isaacs, Founding Partner & CEO at EssenceEnterprise

‘Don’t know why we bothered buying this pencil. It just sits there'.

So true.  Love it.

about 7 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Great post and love the quotes, they are spot on. I have gone past the amazement stage and now accept that most companies do not understand how to use their analytics tools. Most simply provide management reports on sales, failing to grasp that analytics is not sales reporting and is really trend analysis. I've also lost track of the number of times i've heard senior execs say they understand the value of analytics but don't want to invest as they would rather spend more on marketing.....yet they don't know whether their marketing is optimised and their ROI as efficient as it could be.

The comment that data is just lumber is also spot on. Data is meaningless on its own, you need someone with intelligence to use the data to generate business insight and convert this into commercially viable actions.

Perhaps one day online marketers will grasp the power of analytics & testing and see that if done intelligently it can improve their campaign performance and get them a bigger bonus!

about 7 years ago

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