Dennis Mortensen has worked in the analytics, optimization and online marketing industry since 1996. He is an Associate Web Analytics Instructor at the University of British Columbia, the Author of data driven insights with Yahoo! Web Analytics, and a frequent speaker on the subject of analytics and online marketing.

Mortensen joined up IndexTools in 2004 and worked as COO until the company was
acquired by Yahoo! Inc., in May 2008. Today he is the Director of Data
Insights at Yahoo! and sits on the Board of Directors at the Web
Analytics Association. He also writes the popular analytics
blog, VisualRevenue.com/blog.

I caught up with Mortensen to discuss the current state of analytics, how Yahoo fits in and why people should stop comparing Yahoo’s analytics product with Google’s.

Carol Bartz has said that Yahoo is in turnaround. How do you think that is going?
My personal opinion is that, if you go back a year and look a lot at the press and commentary, people had the idea that the company was in utter disarray. That wasn’t the case — at least not from where I was standing. Compared to any other big corporation, I think we were doing as good or as bad as anybody else. We shouldn’t forget that we are a highly profitable company with the ability to put away cash every single quarter. Compared to other companies, that’s not a bad situation to be in. But it became somewhat of an echo chamber, with people “fleeing” from Yahoo. Statistics show that most people do a job for 2.5 years and go to a new position. If that is the case, you can quickly envision how many people have to leave Yahoo every year. That’s just how things work — we will essentially have 1000s of people who come in and go out every year.

If you want to focus on it, of course it looks like an exodus of talent. I have been personally uber impressed with the type of people and the talent inside Yahoo. And in regards to data, for that, I don’t think there’s been a turnaround. I think they’ve continued at the level they started on, but we’ve seen an external change. You’re even seeing a story here and there about that. I think it’s more the external view. We’ve spent the past year almost getting to the point where you don’t need to bash Yahoo to be hip. People might not fully understand what the search deal with Microsoft was really all about. Everyone, including Yahoo employees. I don’t think that’s a secret. It’s a bit more detailed than people expected. But that’s not really for me to comment on — I think this is one of those things that’s going to be a bit more difficult to communicate.

Does Yahoo need to make a better effort to communicate?
I don’t think it’s even truly understood by the markets why a media company needs to be in analytics and why Yahoo is doing this. In that, I think we need to do a much better job. This chat is a testament to that fact. I have to personally convince people that we’re not left behind or even destined to compete with Google in that way.
If we have 100,000 accounts versus their 1 million, it doesn’t matter. You’ll see blog posts here and there that Yahoo web analytics haven’t been able to penetrate the market at the same level [as Google]. They’re right. If you take the market being everybody. But everyone has a target market, and our target market does not equal everyone. We’re looking for advertisers with a little skin in the game.

Can you describe the current state of analytics right now?
Analytics consists of three things. First, data collection. Without
data you can’t really do anything. It sounds simple, to the extent
where people believe “if I put Java in the footer of my website, I’m
cool.” Most people understand that’s not going to cut it anymore. You
can see that most analytics company are expanding on their data
collection. We’re getting there. It’s part tech and part willingness to
make the effort in collecting.

Second, there’s reporting. It
used to be I’ll give you a password to your Google analytics and I’m
done. That’s not really reporting. Handing out passwords is often more
harmful than good. There’s no insights built into that. You need to
take the next step — give dashboard access, scheduled emails, custom
reports for certain user groups. We’re trying to figure out ways to
communicate the info. We need to take this even further.
Third,
there are insights. Today, for the most part these are derived by
throwing a person at the reports. He will then go hunt for insights. He
might stumble if he’s not fully qualified. He might even be able to dig
out insights, but not the ability to push the organization to execute
on the recommendation he provided. This step, people know, is where all
the value lies. This is what people are working on. I don’t think we’re
necessarily providing the right tools for this to be uber successful
just yet
I’d like to applaud the latest release from Google – they’re taking it one step further.

How do Yahoo and Google compete in analytics right now?
My role and that of traditional analytics is the post-click story. You can’t just wing off impressions and tell advertisers that we think this is good for you, they need to know that it’s good and how. For that, it’s not really a competition. It’s not about how we go to market. It’s about how deliver a set of services to a customer. Analytics is one of those things where people want the competition. There needs to be a winner and a loser and as soon as possible.

If people have Google, Yahoo and Omniture tags on their pages, I am no worse off. Some of them will be customers of Yahoo and Google at the same time. Some will choose to have all of their reporting done from an outside company. I think everything is completely hunky dory to put it positively. Google has come out with — over time — a fantastic set of features. It seems that they’ve chosen to move beyond their advertisers. They’ve chosen to serve truly the long tail — to live off of over 1 million customers.
If you have a million customers and you have Google Analytics on a million sites, anybody who wants to can go use it — try it out for $5. They have a different type of business. At Yahoo, we’re not really in the business of serving millions of customers. That’s not the type of company that Yahoo is. We serve a much smaller set of customers — the head and torso part of the market. The value of a customer tends to be much higher for us. Why should we make an analytics tool to serve millions of customers that we don’t have? When people say “When is this going to open up?” that is probably a testament to us not communicating to the market. Our tools are open to any advertiser with any kind of skin in the game.

Can Google handle larger advertisers?
I’m sure they try to serve the head and torso part of the market to the
best of their ability. I think where we will collide if at all, is
going to be when we both try to connect the pre and post click story.
Then we’ll end up speaking to the ad planners of the world and a
different set of people that have purchasing power.

What is Yahoo’s approach to analytics?
I think it’s important for people in general to understand what we — the media industry in general — are trying to achieve here. It’s very easy when you work in analytics to focus on the complete whole, but we’re essentially a module in a much bigger picture. All the stand-alone vendors are getting included into much bigger pictures. (Yahoo, Google, etc). [Media companies] have some sort of responsibility. If we want to make revenue off of advertising, we need to provide at a minimum two things. The first is creative input – 1 million impressions and I’m to deliver those. Then there needs to be a data input – if I do deliver impressions, I confirm they were delivered – there’s a whole story around that which we call the pre-click story.

Has Yahoo analytics changed in ways that people haven’t noticed?
The task of retooling the backend so that we could move our servers from outside the country into data centers in California and other places. It’s not visible, but gives us the opportunity to hand off large scale operations. We spent a considerable amount of time on that, without getting a public credit for the engineering that went into it.
That’s one part, which is completely done. Everything is now running off of a Yahoo back-end. That includes small things, but also now has a Yahoo single login and all the security that comes with that.

What does the future hold for analytics?
The future holds two things: The first is recommendation. Or predictive analytics. We need as the ones holding the data and controlling the back end, to deploy some sort of predictive modeling. I should know that next week will look like this for these metrics – or a least have a decent prediction. We’ll be seeing a lot more predictive analytics. After that automation will sneak into the tools as well. If I can predict a campaign because of the creative going tired or running below your threshold of success, how about I just pull the campaign for you? Why do I need to tell you to pull it? That’s where we’re headed — there’ll be a different level of intelligence applied to it.