Welcome to the Party, Google

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Last week, Google announced the launch of its free analytics service, Google Analytics. The new analytics tool is a result of its Urchin acquisition earlier this year. Some say this will change the entire analytics industry overnight; others say it will only be used by small companies less interesting to the big four analytics tool companies, which focus on enterprise opportunities.

Many tool providers quickly issued press releases about how Google's move won't threaten them, their offerings, or their customer base. They quickly pointed out this will only make the pie bigger, which is better for everyone involved. They may be right, but if they don't feel threatened, they ought to.

Google stumbled out of the gate. Its tool experienced a number of issues the first few days, frustrating new and existing customers alike. It's expected this won't be a problem down the road.

Almost immediately following the announcement, three very large clients of two different tool providers contacted me to inquire about Google Analytics and whether they should evaluate it for their needs. They're significant organizations. Two of them are featured on the tool providers' Web sites as trophy customers. One had been asked by an SVP to put together an outline of the pros and cons of leaving the tool provider and jumping to Google Analytics. It's too early for any large organization to make that decision, but it is being considered.

It's also too early to know how this will impact the industry and the use and acceptance of Web analytics within organizations. Below, the most important issues that will lead to the success, or not, of Google Analytics.

Why Google Analytics Will Be Very Successful

We don't yet know what Google's long-term play will be with the new offering, but a number of things could make it quite successful:

• Deep resources. Google has a deep technical infrastructure (even with the initial technical issues experienced on launch), loads of money, and the ability to expose this product to nearly everyone. Combine that with the technology, skills, and knowledge acquired from the Urchin acquisition, and it has the potential to make this a really strong offering in years to come, but only if it decides this makes sense for its own business.
  
  
• 95/5 rule. Because all the larger tool providers have raced during the past few years to build more functionality into their tools, it could be argued they lost sight of what most of their clients use today. Yes, they're trying to get ready for the next generation of use and stay ahead of the competition. But the truth is, very few customers get close to maxing out even the basic features. This leads to info/data/report/option overload and pushes people away from data.
  
  At first blush, Google Analytics looks straightforward and basic. That's a good thing for where most of the market is today. When you dig deeper into some of the things you can do within the new Google tool, you find it really does offer a lot of flexibility. Combining "free" and "easy" will get the attention of a lot of people who may have struggled with analytics complexity in the past.
  
  
• AdWords. Google's ability to promote the tool through all the clients using AdWords will significantly increase adoption, even if it's used alongside another analytics tool. Most companies we work with blame the tool they use for the lack of success. Usually it's not a tool's fault, rather how it's used. In the end, it really doesn't matter if it's the tool's fault or not. But that perception is very common in many companies. It remains to be seen how many of these people give Google Analytics a shot.
  
  
• Lack of analytics ROI (define). Most companies, regardless of size, haven't realized any sort of ROI from the investment in analytics tools. Again, that's not the tool providers' fault. Most companies haven't figured out how to turn analytics data into improved site performance. If they just look at numbers and don't optimize their sites based on the data, it's tough to argue an ROI greater than zero. For companies that don't use the data to improve their sites, at some point they'll question the amount they pay on a monthly or annual basis. One could argue companies that don't use the data would be better off using Google Analytics for free, then allocating the dollars they spent on a tool to get an optimization program in place.
  
  
• Simplicity. The first version of the tool is very easy to implement and use. Unlike many other solutions, it won't intimidate business users trying to get started with Web analytics. True, it can't do everything many of the other enterprise tools can do. But 95 percent of the market doesn't use all those features, and those features aren't required for the insight to begin optimizing sites.

Why Google Analytics May Struggle

There are a number of reasons Google Analytics may never grow past a typical free tool for small business use:

• Technology bumps. Google struggled out of the gate, underestimating the demand and load that could be put on its system when it rolled out its free version. This was a case of not anticipating interest or demand, rather than Google trying to minimize costs. I'm sure it's throwing every available resource to get caught up. But it must realize the expectations that have been set by other Web analytics tools. Many view the data (whether they act on it or not) as mission-critical.
  
  
• No focus. Will Google and the Urchin team focus the resources needed to grow, build, and manage the tool going forward? One could argue, as all the other tool providers have these past few days, it's not their core business so they won't really focus on it.
  
  
• Lack of support. A primary problem people have is in implementing the tool based on actual business goals, interpreting data, and turning it into action. Anyone who's ever tried to contact anyone at Google for a search or paid-search question knows it's no easy feat. How much support can it really offer for a free tool? All the established tool providers point to this as a primary issue. Sure, it's an issue for Google Analytics -- and many other tool providers, too. The providers offer good services on getting their products implemented, but they really don't have a credible answer in helping companies determine what data they should act on and how. It's just not part of their DNA. Google has said it will rely on partners to help in this capacity. This will be imperative if it hopes to succeed.
  
  
• Privacy concerns. Will corporations trust their valuable Web site behavior data to a free service and Google? How does Google plan to use the data? Will people be willing to trade some privacy concerns for a free service?
  
  
• A serious solution? Can Google Analytics be a solution people take seriously and consider for more than just personal and small business sites? It has issues to overcome with the problems at launch, but the risk and cost of trying the tool is obviously quite low.

It will be interesting to see what happens over the coming months and years with Google Analytics. I'm not ready to say this will drastically change the industry in the next few months, but I also think any of the tool providers that instantly dismiss it as a non-issue are in denial.

Not long ago, WebTrends and WebSideStory offered free analytics tools on a smaller scale. We can be certain this will be much different. It's Microsoft... oops!, I mean Google. Only time will tell.