Web analytics industry transformation (con't)

Not to beat a dead horse - but after sharing my views on Adobe-Omniture, IBM-Coremetrics and speculation about Microsoft-Webtrends some people inquired about my views on the fate of other vendors.

Let's recap:

• Adobe "branding & rich media marketing focus" will bring Omniture in this direction – shying away from anything that is beyond online marketing (from ads to presentation layer).
  
• IBM history of "middleware integration" is in the opposite direction - probably bringing Coremetrics as an integral part of WebSphere (closer to the logic layer).
  
• WebTrends, who's been trough rough times over the past 10 years still puts off a good fight as one of the major player. The single guy in the room will definitely be looking for a new mate - and I speculate Microsoft could be such a fit.
• Google is Google, right? The mission remains so simplistic and so powerful "to organize the world's information and make it universally accessible and useful". They are on the right path but being at the top of the hill also makes you an easier target - including claims that Google Analytics is being subsidized trough Google AdWords... a practice that could be considered to be "unfair competition".

What else?

The “extremes” probably won’t remain between Google on the "low-end", and Omniture on the "high-end". I'm quoting those terms because they are mostly irrelevant by now. As Avinash put in his keynote at the last eMetrics Toronto "it's easy to do better than your competitors when you don't have to repeat their mistakes". Google Analytics will keep improving and in some respects it already offers more than some paid vendors. Furthermore, not everyone will want to venture in IBM long, expansive approach… and not everyone is a friend of Adobe either (not mentioning the dim future of Flash, one of the flagship product of the company).

As the market consolidates, new players can emerge and the online analytics ecosystem is still far from maturity. There are plenty of opportunities for innovative startups to fill specific needs.

Who else?

While thinking about other players I tried to extract the "unique selling point" - what makes this player different from others. Of course, this is my own appreciation and I would love to hear your feedback and own perspective.

• Unica: Although I haven't had a chance to use Unica extensively, the feedback I hear about their data model and flexible interface is always positive. They are particularly well suited to integrate any data source and grow as more complex requirements emerge.
• Webtrekk: The EU web analytics market is quite fragmented, but some players, like Berlin-headquartered Webtrekk, have developed the business within the unique requirements of this market. They are particularly sensible about privacy and legal considerations. As such, Webtrekk might be particularly good for some types of environment such as banking and other financial services.
• AT Internet: The privately held, French company is not a new comer and boast an impressive client list in France. Their unique value proposition includes personalized consulting services, effectively avoiding the risk of "judge & jury" often found when the web agency developing the site is also the same reporting on site performance. I had also posted a review of AT Internet latest NX product.
• KISSmetrics: the startup, which product is now available, is already sending very good vibes in the market. Crafted by experienced entrepreneurs and benefiting from strong financial backing, the fresh approach to web analytics promises to bring a powerful yet very intuitive interface specifically focused on people and conversion.

My take

Those are just a few players in the online analytics ecosystem - I didn't mention voice of customer players such as Kampyle or iPerceptions, or even very specialized tools such as Tynt or PostRank. As the market mature, larger players will continue to expend horizontally, aiming at acquisitions of complementary tools.

At the same time, nth generation vendors will come up with fresh alternatives that will bring a different perspective to such things as the tagging nightmare, real-time slicing & dicing capabilities, data integration and above all, a stronger business focus (as opposed to marketing-centricity).

Sherlock Holmes and monkey mimicking

Most so called "web analysts" are monkeys mimicking others without understanding what they do!

In my experience teaching at UBC and ULaval, the first message a student post in a forum; the first assignment delivered, tells me if this student has the potential to become a good analyst or not. Does he or she show a structured approach to problem solving? Does he/she go beyond the obvious?

This is referred as what Jim Novo brilliantly exposed as "the Sherlock Holmes problem" - and incidentally what is being tested by the WAA Certification: go for the facts and come up with the most optimal and realistic conclusion/recommendation under the current business conditions.

"A client is to me a mere unit - a factor in a problem."
Sherlock Holmes

Evidence I: broad and useless

At the eMetrics Marketing Optimization Summit in France, one of the presentations felt for this common error: reporting page views and visits rather than bringing insight on business outcomes based on each of the customer lifecycle stages. Without being too harsh, I would say it's a start... but it is far preferable to have more depth than breath. Focus on a narrower area you can control and make a difference rather than report widely on metrics that you don't control and won't result in any business change.

Evidence II: pulling the wrong lever

The web analytics course I created for ULaval stems from my work on the Online Analytics Maturity Model and some of it is covered in my workshop. The twelve weeks master-level course includes a short assignment every week. At the earliest stage, when asked to do an analysis of the visits metric most will go in the tool, copy the graph and textually write "the number of visits was X and the average was Y"... Later, when faced with the challenge of recommendations, they will seek to improve the visits metric... fine, but how does this contribute to actual business objectives and outcomes?

Case study: Students were asked to do an analysis of the Visits to SaveTheChildren.org in January 2010, just when the Haiti earthquake stroke. Most students did not mention the traffic was 14 to 15 times higher than usual. Some did not realize the statistical shock was a direct result of increased awareness of Save The Children resulting from the disaster.

Evidence III: chasing the monkey

Most analysts are feeding from "Top 10 tricks to improve SEO", "Top 5 social media tactics", "Top 3 wonders of the online world"... Good for the "now" part of learning, and maybe a necessary step, but in the long run it's not how you will transform the business. This is what I covered in a previous post entitled "Undermining our future as web analysts".

Elementary my dear Watson

I think the starting clue is knowing one's analytics maturity. In the latest Sherlock Holmes movie incarnation, the hero thinks about his moves before going into a fight. He analyzes the weak spots and the actions that will result in the desired outcome. It doesn't only make up for a great movie and special effects, it also highlights the strong analytical capabilities and result driven approach of Holmes!

The knowledge worker in 3 acts: Microsoft.nl

I spent a day with the team at Microsoft Netherlands - thanks to These Days. In this post, my thoughts are not about web analytics or the future of the industry - visiting Microsoft got me thinking about how we are working today and how we will in the near future.

Act I: the office desk

Every Microsoft employee is empowered with a fully loaded and powerful laptop running the latest Windows 7,  Office 2010 and a slew of other Microsoft (and non-MS) tools. If Microsoft aims to "make it great" it needs to understand the behavior and expectations of its users. Back in my days as a sysadmin and webmaster at Softimage (then a subsidiary of Microsoft), the "eat your own dog food" mentra wasn't an obligation, it was a pleasure! 93,000 employees in 100 countries (Wikipedia) makes for a pretty good test bed.

I used to work on three, sometimes four computers. Now I only use my laptop which I will sometimes hook up to a bigger screen, keyboard and mouse. At any given time only a third of Microsoft.nl employees are in the office - the others are working from home or wherever else.

There is no office desk anymore - it's your laptop, your iPhone, your iPad...

Act II: the office space

What is striking about Microsoft.nl office is... the space! It doesn't even look like an office, it looks like a cozy modern hotel lobby. There are areas for meetings, for inspiration, for open conversations or if you need to be calm and focused you can go into sound proof cubicles. Of course, there are also the relaxing areas, gaming and a Microsoft Surface table. Food is great and drinks are plenty - just like home.

The office is just like home, home is your office, your office is anywhere.

Act III: the social space

A huge part of our work is filled with social interactions that are beyond mere job-related conversations. Being freelance and working from home (most of the time) is great. The negative side is socializing at work is pretty much non-existent. Facebook or Twitter are not alternatives...

The Microsoft.nl office is clearly set up to facilitate formal and informal social connections. For that matter, my little experience confirmed two stereotypes of the Dutch: 1) bicycles are everywhere and 2) there is a vibrant at-work and after-work lifestyle.

The only real conversion of any social media is getting to meet someone in real life.

The finally

People come to Microsoft.nl offices from all around the world - sometimes just to see and understand the evolving workplace dynamics. Over the weekend I spoke to someone who's employer thought "it would be cool to have iPads for everyone" but still requires them to show up at the office from 9 to 5... they don't get it! We, web analysts and online aficionados, are living in a microcosm ahead of the mass - we are lucky but it's a curse - lets not forget it.

For more info about what's so special about Microsoft.nl office, check out "New World Of Work Microsoft Netherlands Case Study" on Slideshare.

IBM-Coremetrics: why it matters & my take

Disclaimer: I do not have any insider info and those comments are my personal opinion and point of view. In legal terms... those are not forward looking statements.

Another shockwave in the small web analytics world: IBM Advances Analytics with Acquisition of Coremetrics.

The history

This shouldn't come as a huge surprise. When Adobe announced the acquisition of Omniture few people understood the strategy and complementarity between the three players. In "Adobe + Omniture + WPP = game changer" I commented that "There seems to be some concensus this acquisition is awkward. However, it is in the same vein as IBM's Websphere partnership to integrate Coremetrics within the development platform and production cycle."

In some ways, IBM fix a mistake: according to some people, they should not have sold Surf'Aid in 2006. Remember this was at a time when Google had a much smaller market penetration and Micrsoft purchased a small web analytics player named DeepMetrix, based in Gatineau, Canada... the rest is history. But the re-purchase has not much to do with Surfaid.

Today's picture

According to a study of the top 500 US retail sites study, Google Analytics enjoys a market share of 62%  (up 19% from a year ago). Compare that to Omniture 40% (up 8%) and Coremetrics mere 18% (up 2% from last year). Google 60% figure is consistent with other confidential studies I conducted for the European market.

"Double dipping" (using more than one tag), is up to 33% and significantly in favor of Google.

Coremetrics offering was traditionally considered to be very strong for retail sites - a position that is obviously eroding when looking at the market share results.

What's the deal?

Google dominates the market
It is not even a matter of price, it's a matter of features. The usual claim that Google Analytics was used on small insignificant sites and amateur blogs doesn't hold anymore. Google Analytics has reached the "enterprise-class" level, and businesses are massively adopting Google.

There are a couple of perverse effects however (more on that bellow)

Adobe + Omniture
The goal is to integrate analytics into the development life cycle. There were also some speculations on some type of ad network enhancements trough Flash and better measurement but I don't believe it... Flash long term survival is seriously threatened by HTML5.

Adobe culture and historical offering is focused on marketing and rich media.

IBM + Coremetrics
The relationship between IBM WebSphere and Coremetrics is already in place. I recently mentioned IBM is pushing for analytics front and center in a massive, worldwide, multi-channel marketing campaign (I really like it and went back to it several times!).

IBM isn't about ad placement, marketing or rich media, IBM is about running core business processes. It's about business analysis and business intelligence contributing to bottom line core business optimization. We are in a whole different ballgame.

My take

IBM move is wise and certainly an influx of fresh air for Coremetrics. IBM's culture and experience with acquisitions leads us to think Coremetrics might become closely embedded with WebSphere and maybe marginalized as a standalone product.

In my Roadmap to Online Analytics Workshop I conclude with the slide bellow:

What it means:

• IT & Logs: Early websites started in IT, and like any system, websites had logs (circa 1993). IT admins were looking at those logs for traffic source, usage and errors.
• Marketing: Eventually, marketing found out IT people were talking to customers - bad idea! So Marketing took over the web (circa 1998)
• Tags: Marketing still had to ask IT for logs - complex, slow, not sexy (think old WebTrends) - tags solved the issue! Google democratized this approach (circa 2005)
• Business: Modern websites are not only about marketing - they transcend all business functions.
• Online: Measuring the web isn't enough - think about the growing complexity of the online ecosystem, including social media & mobile.
• BI: As we evolve our web analytics practice, we seek to integrate external data sources: call center, voice of customer, core systems data... we're going toward business intelligence (not the technology, the concepts)
• Business: Marketing optimization isn't enough. You can do a great job at marketing, but if you bring all those visitors to a broken process you are wasting your money. Eventually, to optimize the online channel you have to look at the internals - you need to become business analysts.

In the IBM-Coremetrics context, the path toward business analyst and business intelligence is pretty clear.

What's next?

Microsoft-Webtrends?
There have been speculations for some time about WebTrends. The company bumpy road in the past several years is now more stable and the product was improved (although it's a strange coincidence to see the VP of Marketing leaving WebTrends the same day IBM-Coremetrics is announced). Microsoft-WebTrends would certainly be a good fit. Microsoft is already a heavy user of WebTrends and since the debacle of Gatineau, Microsoft is left with no web analytics offering. Culturally, WebTrends remains one of the few solution that can be hosted internally. WebTrends would be a natural fit with other server-based offering from Microsoft, be it SQL Server, Sharepoint, IIS and other MS Office "enablers". Some people think Oracle-WebTrends is a possibility but I don't see a good fit.

Firing at Google
Anyone in the online world saying Google isn't a threat is either stupid or lying (and for that matter, even in the offline world!). Since a little controversy is always interesting, and will all due respect for the benefits and strengths of Google Analytics, I think there is some unfair market competition and clear subsidizing of GA from AdWords.

• There is clear market dominance of Google, and it's grown from about 40% to 60%. At this rate, Google Analytics will own over 80% of the market within a couple of years - often the threshold beyond which "monopoly" becomes a risk.
• Even for organizations standardizing on a competing product, Google Analytics sneaks in trough the "path of least resistance": agencies are largely using it and the fact there is no cost allows it to go under the radar. When time will come to renew paid contracts, and when companies will look at their analytics maturity, the choice will often go toward GA.
• There is a legitimate concern the entity providing marketing effectiveness metrics is also the same who handles the marketing campaigns. It's a clear judge and jury risk. (In the same way I see it as a business risk when the web agency creating the site is also the one doing the web analytics analysis - not illegal, not really unethical, but certainly a risk for abuse).
• But more importantly, most people now make the connection that "if I do AdWords, therefore I need to use Google Analytics". And who doesn't do AdWords as part of their marketing strategy?

The market dominance of Goole makes it very risky for anyone to sue them for anticompetitive practices. Most of the time, smaller web analytics players would much rather be purchased by Google than risk alienating them by venturing into a long and expensive legal process. But... Microsoft or IBM would probably not be as afraid to do so...

So, what's your take? Any radically different point of view? Am I off track or do you agree?

Undermining our future as web analysts

My spring tour gives me the opportunity to engage and talk to consultants, practitioners and vendors from all horizons. And I love it!

One thing I'm witnessing: we are undermining our own role as web analysts!

I read "The Web Shatters Focus, Rewires Brains" where Nicholas Carr argues the way we surf & search actually re-wire our brain and develops the prefrontal cortex associated with problem-solving and decisionmaking. "Good!" you might think, "as a web analyst, I'm constantly on the web, searching and solving challenges. My prefontal cortex is bigger than yours!"

But all this brain juice isn't good for your health... and your future...

Easy answer now!

Scientific studies have proven the hypertext world hinges on our ability to focus and develop our deep understanding of a topic. Actually, as analysts we are experts at context switching - or what is known as switching cost. We skim through documents, spot the piece of info we want and up we go! We switch between web, emails, RSS feeds, Facebook and Twitter - and that old thing called "phone".

The Internet is an interruption system. It seizes our attention only to scramble it.

I'm saddened to say we do the same with our analysis. Most analysts I've met struggle to go from tactics to strategy. Most of them also face a brick-wall if the answer to their immediate issue isn't found on the net, or if the conference or workshop they go to doesn't provide some kind of magic recipe or to do list.

...heavy multitaskers were much more easily distracted, had significantly less control over their working memory, and were generally much less able to concentrate on a task.

Our strength might very well be our greatest weakness. In our search for immediate gratification we are quickly going into the tactical and forgoing the strategic aspect of analytics and longer term business optimization.

Intro to the Online Analytics Maturity Model [video]

After my keynote at the Web Analytics Congress 2010 (Amsterdam, Netherlands, June 2nd 2010), Matthew Niederberger, Web Analyst at TUI Netherlands, kindly asked me to do a video interview. I'm grateful to Matthew, the Web Analytics Congress team and Adversitement, who sponsored my keynote, for this great opportunity!

In the video, I discuss the Online Analytics Maturity Model (OAMM) and my motivation to develop the concept. I also share tips on performing a more valid self assessment and what the effect is of managerial support on progression within the model.



Interview recorded at the Web Analytics Congress, Amsterdam, June 2nd, 2010 by Matthew Niederberger, available on Vimeo.

Music: "Interlude #2" by Flatlink (licensed under creative commons)