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Web Analytics Demystified blogger and consultant Eric Peterson was recently in London to speak at Tealeaf’s annual customer forum.
We interviewed Eric and Tealeaf’s VP of Worldwide Marketing Geoff Galat about the current trends in web analytics, and the challenges of measuring multichannel marketing...
What are the implications of all the consolidation we are seeing in the market, e.g. Adobe / Omniture; comScore / Nedstat; IBM / Unica & Coremetrics?
Eric: I think the biggest change is that ‘web analytics’, as we have traditionally known it, is forever changed. The only company really serious about web analytics anymore is Google with their Google Analytics offering.
Certainly, Yahoo is still a player and there are another few dozen smaller companies still trying to find their place in the world, but when you look at Adobe, IBM, comScore, and to an extent WebTrends what you see is traditional clickstream tracking technology being leveraged as part of something greater.
Adobe and Webtrends call it ‘marketing optimisation’, IBM calls it ‘customer experience’, comScore is probably still getting its arms around the Nedstat acquisition, but none of the historical players in this space are telling a story about web analytics in an appreciable way. Google has locked up that sector and continues to innovate, forcing everyone else to look elsewhere for core revenue and driving evolution in the sector.
Geoff: I think the industry as a whole is going through a fascinating stage at the moment. As web analytics in its broadest sense becomes a board level issue for companies, the focus is on getting insights that are actually meaningful and actionable for your business. Forward looking companies are looking for technology providers that are able to give them more than ‘just the numbers’ and this is where other areas of the industry such as customer experience management and voice of the customer are starting to come into play.
Will 'web analytics' eventually become a redundant term because it is just part of the broader 'marketing optimisation' piece?
Eric: ’Web analytics' has become redundant with Google Analytics given the massive footprint, Google Analytics has carved out in click-stream measurement. But yes, for the for-fee vendors the story is about marketing optimisation and customer experience management.
Geoff: Precisely! And it comes back to my previous point really, while it’s great to know that X numbers of people are dropping off my website at a certain point, what becomes even more interesting is why this is happening. That’s the real future of web analytics and, as you say, brings the discipline much more into the optimisation space.
How have web analytics and online measurement become more strategic?
Eric: To an unfortunate extent they still haven't. The single biggest challenge the industry faces (regardless of what you call it) is that senior leadership still hasn't seen the value that digital measurement and analysis can provide to the broader business.
Perhaps this is a function of revenue contribution from digital, or maybe it's simply that leadership hasn't seen the level of commitment and professionalism they require to make business-critical decisions, but either way, most digital analysis practices we see are still far more tactical than strategic.
I should say this is great news since helping build digital analysis strategy is core to what my partners and I do at Web Analytics Demystified. If everyone had strategy we'd have to get new jobs. <smile>
Geoff: While I agree with Eric that there is still a lot of work to do here, the fact that for many businesses the internet is now becoming a key, if not the most important, channel, inevitably puts more focus on online measurement and website effectiveness.
The growth of social media is having an impact here too, with web visitors now more likely to think about venting on social networks when they have a bad website experience. The only way that companies can take informed strategic decisions is by monitoring online customer behaviour closely and using these insights as the basis for high level business planning.
Should business performance tools such as multivariate testing be seen as part of web analytics?
Eric: Testing and optimisation platforms like SiteSpect and Adobe Test & Target are a ‘must have’ investment in any serious businesses digital analysis platform. Without testing, web analytics falls critically short and fails to provide anywhere near the benefit possible.
Leadership are wise to consider the stories that companies like Dell, Expedia, Intuit, and others are out telling about the financial gains made possible through their investment in testing and optimisation.
I am a big believer in these ‘second generation’ analytics tools and have been saying lately that the current decade ending this December has been all about ‘reporting and basic analysis’ but the coming decade will be all about ‘testing and optimisation’. Check back with me in five years and see how my prediction turns out ;-)
Geoff: We work with a number of multivariate testing companies, as do our customers. To be truly effective multivariate testing must be running in sync with your other web analytics and online optimisation processes. It’s only by linking up these various tools that you really get a full 360 degree picture of what is happening on your website and what it is that can then be optimised.
How much of a problem is measurement across channels such as video and mobile?
Eric: None, as long as you have a realistic and pragmatic understanding of what can be measured. We just published a very exciting free white paper on this subject with our friends at OpinionLab that discusses how measures of interaction, engagement, and sentiment can be leveraged across devices, channels, and technologies to develop a complete picture at a high-level of any businesses investment in emerging media.
Our framework encourages business owners to examine all of their efforts on a ‘cost per’ basis, and the new key performance indicators for multichannel businesses become ‘Cost per Interaction’, ‘Cost per Engaged Interaction’, and ‘Cost per Percent Positive Sentiment’.
Conversely, if you're trying to apply the old metrics to new technology, good luck. What is a page view on a mobile application? What is a visit? What about a visitor?
Traditional web analytics metrics show their age when you try and apply them to emerging media and technology ... so don't bother. We strongly encourage our clients to think ‘outside the box’ on cross-channel metrics and they are seeing the clear benefit from doing so, especially in the executive Suites and corner offices.
What is the most exciting development, trend or technology in the web analytics industry?
Eric: Hands down the most exciting new technology trend is ‘tag management systems.’ Incorrectly referred to as a ‘universal tag’ by some, tag management systems provide a very powerful clearinghouse for all of the tags deployed across the site.
Geoff: I’d throw the process of automatically identifying analytics anomalies in here too.There is simply too much data out there. Companies are literally overwhelmed by the volume of data, so have little ability to sort through it to find insights.
But, we can apply technology to the problem, for instance by using powerful complex algorithms that tell us what to look for, and why. Then, we can begin to alert analytics professionals to unexpected events based on previous common behaviour. It allows you to be alerted to something that is happening on your site that you otherwise might have overlooked. It’s sometimes these small ‘struggles’ that cause death by a thousand cuts and is a real challenge for ebusinesses.”
What are the main challenges for companies trying to measure multichannel marketing activity?
Eric: In my experience simply coming to terms with what they are trying to learn. Except in rare instances, it is still somewhat impractical to integrate multiple online and offline data sets to create a holistic view of consumer behavior and response to marketing.
The volume of data in digital channels is so massive and the assumptions are different and so companies adopting the ‘smash it all together and let the stats-wonks sort it out’ haven't been nearly as successful as they would have hoped. The companies that are having success are the ones with clear hypotheses and solid questions they are trying to answer.
A wise man once said ‘web analytics is hard’ and it turns out he was right. Unfortunately ‘multichannel marketing analytics’ is even harder, so if this is your goal I strongly recommend you set your expectations properly, dig in, and be ready to make a few mistakes before you get the answers you seek.”
Geoff: One of the biggest challenges is how to use channels together effectively to deliver business returns. One of our customers – Netflights.com – is passing the website insights we provide to its call centre team so that customers that are struggling on the site can be contacted and helped.
This process alone is now delivering 20% of the company’s entire revenue. That’s a great example of using data to generate ROI.