E-consultancy’s Web Analytics Buyer’s Guide, published this week, reveals that the UK market for web analytics is expected to grow by 12% this year to a value of £78 million by the end of 2008. 

For analytics vendors, the silver lining in the hovering cloud of recession is that corporate minds are focusing more than ever on what is really driving profitability.

The importance of measurement and tracking is only likely to accelerate further in a period of economic instability, as organisations work harder to maximise ROI, allocate resources efficiently and understand where true value comes from.

As Andrew Hood, Managing Director of Lynchpin explains:

“The current economic climate is ironically driving analytics investment in sectors like retail. T
he combination of increased focus on online as a channel to sustain growth in a difficult high street climate and the resulting competition means optimisation and understanding what really works is critical.”

Another related theme discussed in the new buyer’s guide is the need for established vendors to innovate and differentiate as a result of the increasing availability and advances in free analytics tools.

Both the latest version of Google Analytics and Yahoo’s newly introduced tool, Yahoo! Web Analytics, incorporate more advanced-level features, and are aimed at serving enterprise-level companies as well as SMEs. Microsoft, meanwhile, plans to introduce its rival tool, Gatineau later this year.

Dyana Najdi, Analytics Manager at Google Analytics said:

“Enterprise level web analytics are now readily available to everyone, relatively easy to use and free. The industry is still consolidating and reacting to this fact, as other large players (Yahoo!, Microsoft, and AOL) follow Google into this endeavour.”

As free tools becoming increasingly sophisticated, this puts pressure on web analytics to offer similar features at no cost, or add more value by incorporating advanced level features.

The reality, as things stand, is that large companies in particular will continue to use paid-for tools to meet their requirements but it will be interesting to see how this changes over the next few years.

Whilst the industry continues to flourish, the picture is not all rosy. Privacy has been an on-going concern, but this is likely to be further amplified in light of data security issues reaching mainstream consciousness.

The accuracy of web analytics reporting could also be significantly affected by introduction of browsers with additional privacy settings, such as Google Chrome and IE8.

Erica Boyd of SiteCensus Suite said:

“The number of end users who will set each level of privacy [on IE8] is unknown. This creates an issue for all web analytics tagging suppliers and third party content suppliers because no longer will the suppliers be able to report as accurately as they do today, unless of course work-arounds and solutions are found.”

Despite these challenges, the web analytics market continues to thrive, as the need to derive actionable insights and understand customer behaviour becomes even more critical.

There is more information, detailed market trends, and analyst forecasts in our

Web Analytics Buyer’s Guide 2008 
, which contains 22 profiles of the leading players in the market:

Amethon, AT Internet, Coremetrics, DC Storm, eVisit Analyst, Facilitate Digital, Google Analytics, IndexTools (Yahoo!), Intellitracker, iPerceptions, Lynchpin, Marketwave, Nedstat, Nielsen Online, Omniture, RedEye, Site Intelligence, Speed-Trap, Unica, WebAbacus (Foviance), WebTrends and WiredMinds.