2006 and All That

Yet again another year whizzes by and we end up another year older, and hopefully another year wiser. There’s only one thing to write at this time of year: a spot of reflection and prediction.

I always say to people that building an online marketing analysis and measurement capability is a journey, not an event. You don’t, one day, suddenly start “doing Web analytics”, you build up a capability that develops over time. I describe that journey in three stages.

1. Building a performance tracking capability This is the process of getting the right numbers right, counting the things that count, developing KPIs, distributing key reports that tell you how you’re doing, and whether you’re meeting goals or not.

2. Process analysis and optimization At this stage, organizations use their measurement systems to understand and optimise key business processes, such as acquisition and conversion. They are using additional tools such as A/B and multivariate testing. They’re thinking more strategically about site design, developing key customer journeys and segmenting their visitor base.

3. User-Centricity In the final stage, the organization’s focus is the shifts from the site to the user or customer. Retention as a process becomes more important and, as a result, site behavioural data must be integrated with other data sources and other marketing technologies. Metrics for customer loyalty and lifetime value become KPIs. The online channel is an integrated part of the multi-channel customer strategy.

Here in the U.K., a lot of companies are still in the first stage. Many organizations we speak to and work with are in the process of more clearly defining online goals and objectives, and putting in place the metrics and systems to measure them. For large, complex, and global organizations this process that can take months. Many companies are upgrading their Web analytics systems to give them the sound tracking capabilities they need to and to give them a foundation for the next stage of growth.

That growth will come from ironing out the inefficiencies in their marketing processes and working smarter. This is the second stage of the journey. My perspective is this is where the U.S. market is at the moment. Investments have been made in systems and in people, and those resources are being put to work. It’s been a strong year in the US for marketing technologies such as behavioural targeting and multi-variate testing.

In 2007 we’ll start to see adoption of these types of capabilities by more forward thinking companies in the U.K. Obviously, many European companies are already pushing the envelope when it comes to using data, insights, and technology to make significant improvements to their online marketing processes but they’re relatively small in number. In the UK in 2007, we’ll see more evidence of more companies looking to do the same. US vendors in that space are already looking to these shores.

Next year we’ll also see more focus on retention as a marketing process with organizations looking to understand and manage concepts like customer loyalty and what that means in today’s multi-channel world. This will result in more focus on “data interoperability,” i.e. the need to have various marketing technologies speak to one another and for data on customer activity to be shared. This could be the year at many organizations when online marketing emerges from its silo and takes up its role as a vital component of the total customer marketing mix.

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