In a promising sign, businesses allocate an increased share of their analytics budgets on staff instead of technology. But businesses are still coming up short in two key areas.
A report on Web analytics in the U.K., released by Econsultancy, offers some interesting findings on trends that I'm confident are being replicated in other parts of the world. It also highlights some areas where a lot of progress still needs to be made.
One finding in the report (registration required) immediately caught my attention. Spending on Web analytics increased 12 percent in the U.K. in 2009 compared to a year ago, despite the economic downturn.
What's more, Econsultancy found that more companies are investing a larger share of their budgets on internal staff than on technology. At last! The study found that the share invested in Web analytics staff had gone from an average of 36 percent in 2008 to 42 percent in 2009.
In contrast, 38 percent of the budget went to Web analytics technology. Spend on consulting and other services remained steady at around 18 percent of Web analytics budgets.
OK, it's still a long way from Avinash Kaushik's famous 10/90 rule for Web analytics success. Three years ago he recommended that for every $100 spent on Web analytics, organizations should spend $10 on technology and $90 on "intelligent resources and analysts."
It's a great point. I've often seen organizations implement expensive measurement technology without having people extract value from its technology investment. The organization is then usually disappointed and dissatisfied with its return on technology investment.
So, things are looking up for investments in Web analytics. And this trend has undoubtedly been helped by the increased use of free measurement tools such as Google Analytics.
Nearly a quarter of organizations in Econsultancy's research said they use Google Analytics and no other Web analytics tool. There are also signs that people are using analytics tools more frequently.
Still, I worry at times about the quality of the data that is being reported. As I wrote in, "Your Web Analytics Checklist," organizations must follow some simple processes to ensure they get and work with good quality data. Just because technology is free, companies must devote time and effort to get the right numbers right.
One of the more worrying statistics in the report is the fact that less than one in five companies claimed to have a measurement strategy tied to their business objectives. Admittedly, 60 percent of the organizations said they were working on it, but the number that actually implemented a coherent measurement strategy is low. I wrote about creating a roadmap that links objectives to metrics in "Building Analytics Into Your Business Processes."
It's interesting to note from this report, though, how many organizations still implement measurement technologies first and then worry about the business impact of what they want to measure. In some ways, that's understandable. Organizations know they must more effectively measure their marketing activities and therefore know they need measurement systems to do that. However, there's still a tendency to implement the technology in the hope that it fixes the problems without thinking about problems that need fixing.
Another worrying statistic: Only 23 percent of respondents said their Web analytics provided actionable insights. I wonder why.
Is it because the right things aren't being measured in the right way? Or is it because companies can't act on the insights that they get from the data? Having actionable insights requires both the right data and the ability to execute on the data.
So the state of Web analytics in the U.K., based on the Econsultancy report, is a bit of a mixed bag. There are good signs in terms of the way that money is being invested in Web analytics. But these undertakings can't be carried out in isolation from key business objectives.
As my teachers used to write on my reports, "Could do better..."
Neil Mason is SVP, Customer Engagement at iJento. He is responsible for providing iJento clients with the most valuable customer insights and business benefits from iJento's digital and multichannel customer intelligence solutions.
Neil has been at the forefront of marketing analytics for over 25 years. Prior to joining iJento, Neil was Consultancy Director at Foviance, the UK's leading user experience and analytics consultancy, heading up the user experience design, research, and digital analytics practices. For the last 12 years Neil has worked predominantly in digital channels both as a marketer and as a consultant, combining a strong blend of commercial and technical understanding in the application of consumer insight to help major brands improve digital marketing performance. During this time he also served as a Director of the Web Analytics Association (DAA) for two years and currently serves as a Director Emeritus of the DAA. Neil is also a frequent speaker at conferences and events.
Neil's expertise ranges from advanced analytical techniques such as segmentation, predictive analytics, and modelling through to quantitative and qualitative customer research. Neil has a BA in Engineering from Cambridge University and an MBA and a postgraduate diploma in business and economic forecasting.
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