AnalyticsAnalyzing Customer DataIs Web Analytics Really That Difficult?

Is Web Analytics Really That Difficult?

Wondering if you can afford to put Web analytics at the core of your online marketing processes? The real question is, can you afford not to?

A couple of months ago, Web Analytics Demystified published a report sponsored by the Web Analytics Association (WAA) on the use of Web analytics in organizations and attitudes toward the industry around the world. I was looking at the report again the other day and was struck by one of the results. Over half (56 percent) of respondents, who were Web analytics end users and consultants, found Web analytics to be “somewhat” or “extremely difficult.” Only 15 percent thought it was easy, with the rest in the middle.

I started wondering whether this was a peculiarity of the industry. Do over half the people who work in SEO (define) consider the work to be difficult? What about e-mail marketing? Do e-mail marketers consider it difficult? What is it about Web analytics that makes it difficult?

There were a few clues in the report. The majority of organizations work with technologies that are relatively new to them. Not many having been working with the same system for longer than three years. There are concerns over data quality, data definitions, and reporting functionality. But one of the most interesting and telling statistics in the report is the use of Web analytics in an organization is primarily driven by people on the ground. Only a few organizations claim to have corporate processes in place to drive value from the Web analytics investment. This is why people find Web analytics difficult; it’s viewed as a tactical response to a problem, rather than as a strategic imperative.

One challenge with Web analytics is it’s viewed in terms of the technology as opposed to viewed in terms of a philosophy. That may seem an odd thing to say, but Web analytics reminds me of the CRM (define) industry in the late ’90s. Organizations would decide to “do CRM.” They bought a piece of technology, implemented it (eventually), and waited for the promised results. Often, they were disappointed. Successful organizations realized that they not only had to implement a piece of technology, they also had to implement changes in the way they thought about customers and their own processes for dealing with customers. They viewed CRM as a corporate philosophy, not just as a piece of technology.

So should Web analytics be a philosophy? I’m biased, but I believe organizations that take marketing performance measurement seriously will ultimately be more successful than those that don’t. A piece of research by JupiterResearch a couple of years ago showed U.S. retailers that embraced Web analytics had much higher conversion ratios that those that hadn’t. And “embracing Web analytics” doesn’t mean implementing a Web analytics solution. It means investing in the skills and resources to extract insight from it; it means changing marketing decision-making processes to include target setting and performance review on a continuous basis; it means building analytics and performance measurement into the heart of the development process, rather than it be an afterthought. In short, it means having strategic intent about online business performance measurement that comes from the key decision makers in the organization.

There’s no doubt implementing a Web analytics system can be a bit tricky. There’s a lot that needs to be thought about. For many organizations, the concepts and the technologies are new. But these problems are exacerbated if the organization doesn’t align itself alongside the new capability and make the additional investments in resources, skills, and training. Culturally, organizations must also shift so that when decisions about resource allocation are made, Web analytics is seen as mission critical an element as transaction processing. This may seem like the tail wagging the dog, but what’s the point of building a new checkout process, for example, if you can’t measures how effective it is?

When I run workshops, I always start by talking about strategy, goals, and objectives and setting key performance indicators (KPIs). In short, why does your Web site exists, what are you trying to do, and how will you know you’ve done a good job? If the answers to these questions are clear, then Web analytics gets a lot, lot easier. I usually end my workshops by sharing one of my favorite quotes. It comes from Art Nielsen: “The price of light is lower than the cost of darkness.”

If you’re wondering if you can afford to put Web analytics at the core of your online marketing processes, the question really is whether you can afford not to.

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