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With businesses still struggling under the weight of the difficult economic environment, the importance of understanding the drivers of profitability has never been greater. More than ever, it's crucial for companies to get the most from their web properties and digital marketing investment, and to measure effectively.
This is where investing in a good web analytics solution can help, and as Econsultancy's new edition of its Web Analytics Buyer's Guide shows, it's encouraging to see that the sector continues to grow, in spite of continued pressure on budgets.
The market for web analytics technology is now worth an estimated £85 million with a growth rate of 9% in 2009 (compared to 12% in 2008). Inevitably, growth has somewhat slowed, with some companies delaying their purchase of web analytics solutions until the economic situation improves.
The focus of web analytics spending has shifted from technology to greater investment in people power. According to Nedstat CEO, Michael Kinsbergen, slowing investment in technology has contrasted with significant and rapid growth in clientside budgets for internal staff.
This is backed up by the findings of the Econsultancy / Lynchpin Online Measurement and Strategy Report, which showed that companies are now spending more money on staff for web analytics than on licences and software.Greater investment in people is a positive development for the web measurement industry, since it's the interpretation of the data that's crucial.
Hopefully the market valuation and analysis of the marketplace contained in the report are valuable for those observing and commentating on this market.
But what do would-be buyers of technology need to think about when it comes to their digital measurement strategy?
Here are five important considerations for companies investing in web analytics.
1) Think long-term and employ a holistic approach ...
In order to be successful, companies need to remove the silos that have hampered web analytics in the past, and move towards a multichannel approach. Philip Buxton, Marketing Director of Tagman, explained that growth in the analytics industry stems from the ability to join up different types of data:
“There is most growth in systems that join together the data being provided from different areas, particularly off-site marketing data with on-site user behaviour. Solutions are emerging that either add one to the other, or that offer a platform for all data to feed into, providing one 'home' for the data – and one dashboard where a user's complete journey can be identified and acted upon.”
From the clientside perspective, it's important to think about which analytics vendors are able to integrate different types of data, and whether they have the technology to employ a multichannel approach to measurement. Even if this isn't important for your measurement strategy right now, it will be at some point in the future.
2) ... But don't forget the immediately achievable
It's vitally important to think of web analytics as part of a long-term proposition, and incorporate measurement into a wider organisational strategy, but it's equally crucial to recognise that small changes to the website can make a big difference to overall conversion rates and the bottom line. The research has shown that many businesses fail to take the necessary basic steps to improve conversion. However, with greater strain on resources, there is now increased focus on making small changes that can make a big difference, and fine-tuning different parts of the sales funnel.
As web analytics author and Google Analytics evanglist, Avinash Kaushik points out:
“The challenge is that frequently in that quest [to make major changes] we ignore the immediately achievable. And that trade-off is a crime.”
3) Invest in appropriate skills
The vast majority of experts interviewed for this year's buyer's guide said that the biggest opportunity for growth in the web analytics market came from greater investment in people with the right skills.
Web analytics requires a unique combination of different abilities; this includes an understanding of statistics, business acumen, and deep knowledge of digital and interactive marketing.
Whilst it's arguable there is a limited supply of people with web analytics knowledge, the shortage of people with business degrees and statistical skills is less of an issue. Companies need to invest in additional education, training and recruitment in order to attract talented university graduates and build interest in the web analytics sector, and in digital marketing more broadly.
In his new book entitled Web Analytics 2.0, Avinash Kaushik says:
“...You need an analyst, that is, a person with a planet-sized brain. Invest multiple times more in her or him, or more of them, if you truly want to take you action on your data. Otherwise, you are simply data-rich and information poor."
4) Consider that mobile measurement may require specialist services or technology
More businesses are experimenting with mobile marketing this year, so appropriate measurement and tracking technology is essential for allowing businesses to assess return on investment and effectiveness of the channel. For those forward-thinking companies who are looking to invest in mobile, it is important to set goals and objectives at the beginning of each campaign, and then think about how to measure success.
The mobile environment poses a different set of challenges compared to web measurement, but it's important to have the right expectations, and remember that whatever type of analysis you undertake (whether web or mobile measurement), it is always hard.
5) And finally ... forget reporting, think analysis
Rather than merely relying on an output of data from your web analytics solution, you need to think about how web analytics technology can be used to mine valuable customer insights. It's the understanding of how the data can be interpreted that holds the key to return on investment.
Web analytics is evolving; whilst the first generation of analytics tools largely aggregated data to produce reports which summarised website interactions, such as details of click-through rates and visits, companies are gradually moving away from the "bean-counter" model of measurement.
More businesses are now incorporating web analytics into business intelligence to garner customer insights, and are feeding these valuable nuggets into a long-term plan for ongoing improvement and optimisation.
Finally, it's important to understand that choosing your ideal web analytics supplier is an iterative process, and this is where Econsultancy's Buyer's Guides can help. It's important to understand that different companies have different approaches and technologies, and to get the right fit with your own organisation, the first step is to identify exactly what you need.
The 199-page guide, which contains tips for buyers and enables readers to compare different vendors, features profiles of the following platforms:
AT Internet, Bango, Clickstream Technologies, Coremetrics, DC Storm, eVisit Analyst, Google Analytics, Intellitracker, Lynchpin, Marketwave, Nedstat, Nielsen, Omniture, RedEye, Site Intelligence, Speed-Trap, TagMan, Unica, WebTrends, and Yahoo Analytics.