Following Google’s Footsteps, Microsoft Launches Beta of Free Web Analytics Tool

Microsoft has quietly opened a beta version of its soon-to-be-free Web analytics system, Project Gatineau. It allows users of Microsoft’s adCenter paid search to track how customers get to a Web site, where they go, and how they leave.

In development following Microsoft’s acquisition of DeepMetrics in May 2006, Project Gatineau will provide marketers with information on whether users came to a Web site via e-mail, paid search, banner campaigns, offline campaigns, or other means. Funnel reports provide insight on how they left and what pages they requested. The system also ties information to personal profile information gathered through the Live ID system if the visitor has one. Previously known as Microsoft Passport, Live ID stores data on users including sex, age, income and location. The overall goal according to Ian Thomas, director of customer intelligence at Microsoft, is to allow marketers to accurately track which campaigns see the highest conversions.

“One of the purposes of the project is to provide a balanced, semi-independent view of the impact that different kinds of marketing are having on the destination site,” said Thomas.

If the scenario of a large Web advertising company purchasing an analytics company, then offering an upgraded version of its software for free seems familiar, it’s because Microsoft is clearly following in the footsteps of advertising rival Google, which acquired Urchin and then famously offered Google Analytics free to advertisers in its AdWords program in 2005, according to Eric Peterson, founder of Web Analytics Demystified.

“It’s hard to spin it any other way,” Peterson said. He asserts that both Google and Microsoft believe providing free analytics allows marketers to justify the return on investment for search campaigns, and thereby increase spending. But Microsoft will have an uphill battle to displace Google’s near stranglehold on free analytics usage, he said.

“Google analytics is very well penetrated. The number I’ve heard is 800,000 on the low end, and a million on the high end. That’s good penetration and Microsoft wants in,” said Peterson. “This is one of those things a little late to market probably wouldn’t have hurt, but this is two years later. So additional pushing from Microsoft is necessary. But Microsoft seems up for the challenge.”

One key feature that Microsoft’s Project Gatineau does have over Google Analytics is the ability to tie user information via Live ID, said Peterson.

“Would it help you make better advertising decisions and marketing decisions if you have that demographic data, so you know which campaigns are being responded to by men rather than women?” he said. “If you could use that demographic data, that would be interesting.”

The Project Gatineau beta program also represents an expansion of Microsoft’s adCenter system which had previously only been used for paid search. The company intends to grow adCenter’s capabilities, according to Thomas, with the analytics aspect the first of several new services.

“The vision is to turn it into the one stop portal to perform a number of activities with online marketing and Microsoft, and Gatineau will be one of those activities that people will perform with adCenter,” he said.

As part of the beta, users accepted into the program but without an adCenter account will be charged an initial five dollar fee, but that requirement will be removed in future beta versions. The adCenter user interface will include a new tab for analytics for users to access the data. Gatineau collects its information by requiring users to apply a piece of JavaScript tracking code on pages to be monitored, which Thomas admits is a common analytics issue, but one the company is working on.

“It’s usually a case of dropping that code into the footer of the page,” he said. “I can’t tell you more, but we’re working on technology to help automate that process.”

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