Web Analytics: Insights From the Front Line, Part 2

Last time, I spoke to Avinash Kaushik, author of Web Analytics: An Hour A Day and leading Web analytics thinker, about industry developments in 2007 and key drivers of change at the moment. Here, we talk about the state of the market today and where it’s headed.

Neil Mason: How would you assess where the Web analytics industry is at the moment from software vendors’ point of view?

Avinash Kaushik: Full of opportunity. Money and fame awaits all. Well, at least those willing to work hard.

The vendors have done well thus far, mostly, but they’re still scratching the surface of what’s possible. Many big Web sites still don’t use Web analytics. There are many growth opportunities in the software market (aside from the current favorite child: hosted). We aren’t even scratching the surface of integration with data from other parts of the company and other tools, should we decide that Web analytics isn’t a silo but a part of business analytics. So there’s a lot to do, and appropriate financial rewards [await] for companies that help accelerate the move beyond clickstream.

NM: What about the people side, that is, the end users and consultants?

AK: There’s a real dearth of skilled practitioners in our industry. And that has stunted the amount of progress that can be made, because the 10/90 rule still applies. Spend $10 on software/services and $90 on people who can actually analyze data and produce insights. If you’re a skilled person, you can name your own salary, but make sure you’re on the Web analytics 2.0 continuum and not 1.0. And if you’re someone who wants a great analytics career, then now you know where to find it.

Consultants will thrive in any field where the rule is 10/90, because they can bring their expertise to bear on the $90 part of the equation. Additionally, because of increase in the demand, you’re noticing many more consultancies (mom and pop and grandpa included) and an interest from the big boys for mature Web analytics consultancies (example: our good friends Zaaz were acquired by WPP). To make optimal amounts of money, consultancies, like other companies, are finding that they can’t be a one-trick, “let me parse your log files” pony. They are being forced to evolve into areas such as multivariate testing, competitive intelligence, usability, etcetera.

NM: What are some key trends you see at moment? Where’s the market going?

AK: The problem with Web analytics 1.0 is that it’s an exercise in data torture and reporting with long lags in taking action (if any). Data torture needs to get automated and expanded, decision making needs to get automated; people need to be left for smart hard things (vs. what happens today). Smart companies will start to exploit more things, like multivariate testing, onsite behavior targeting, etcetera, because in each case you’re leaving humans to understand customers and create content, and you’re letting intelligent solutions create the right customer experience based on data. Won’t happen overnight, but are on this train for good.

I also believe that 2008 will see a more serious attempt to get Web analytics to become a part of business analytics. We’re still a silo in most companies (data and people). We’ll see more collaboration and innovation in helping Web data become a core part of the company data to truly give end-to-end visibility (and maybe the holy grail of multichannel analytics/impact). Won’t all happen in 2008, but we might get serious.

I’m optimistic; we won’t have untouchable islands of data like we do today: search engine optimization, RSS, social media, etcetera. They’re all becoming mainstream, yet the current generation of tools mostly stink at tracking them. You can track them, but [only] if you are willing to row your leaky boat all by yourself to that island. I think this will change.

Oh, and we aren’t done with consolidation in the industry.

It’s going to be fun!

NM: I reckon so. Thanks, Avinash!

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