web analytics - a buyer's guide 2005

8/9/2019 Web Analytics - A Buyer's Guide 2005

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Web Analytics A Buyers Guide (2005)

Table of Contents

1. Introduction ......................................................................................................3

1.1 About E-consultancy ...........................................................................................3

2. Executive Summary..........................................................................................4

2.1 Further Reading...................................................................................................4

3. The Market ........................................................................................................5

3.1 Market Definition..................................................................................................53.2 Market Value ......................................................................................................53.3 Market Growth......................................................................................................53.4 Drivers of Growth and Market Trends..................................................................63.5 Return on investment...........................................................................................83.5.1 The benefits of effective web measurement and analytics ............................8

4. Costs and Pricing Models................................................................................8

5. Finding the Right Company and Solution.....................................................9

5.1 Introduction..........................................................................................................95.6 Who sets E-metrics standards? ..........................................................................9

6. Market Positioning Charts.............................................................................10

6.1 Explanation for Chart 1 Type of Solution (Part 1)...........................................106.2 Explanation for Chart 2 Type of Solution (Part 2)...........................................116.3 Explanation for Chart 3 Type of Solution (Part 3)...........................................12................................................................................................................................12

6.4 Explanation for Chart 4 Company Culture.......................................................13SAMPLE VENDOR PROFILE FORM ......................................................................14

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1. Introduction

E-consultancys buyers guides are the ideal starting place for anybody researching new suppliersin interactive market sectors.

They contain in-depth vendor profiles, to help you quickly evaluate suppliers and serviceproviders, as well as market analysis to help you put things into perspective.

Vendors are selected for the report based on a combination of factors, not limited to butincluding:

Analysis of capabilities (services / products) Clients Experience (qualifications / trade bodies / case studies / client lists) Expertise (by sector / topic), UK status (a UK office is preferred, occasional exceptions are made) Ability to take on and fulfil new projects Recommendations from trusted sources (or anecdotal evidence to the contrary) Google visibility

Business model (a high % of turnover should be related to these services) Company website

E-consultancy does not explicitly recommendany of the suppliers featured in these guides,principally because it is impossible for us to work with all of them to form a first-hand opinion. Butwe do believe - based on an intensive and careful selection process - that the chosen vendorsrepresent quality.

Buyers Guides are updated on an annual basis, so the information contained within is recent andthus valid.

Send any questions or comments to E-consultancys editor, Chris Lake ([email protected]).

1.1 About E-consultancy

E-consultancy is the UKs leading online publisher of best practice internet marketing reports,research and how-to guides. It also publishes buyers guides and has a directory of 100,000+third partyinternet marketing white papers.

Since moving to a paid-content model in 2003 E-consultancy has amassed thousands of payingsubscribers, around 30,000 registered users and 115,000 unique users sessions per month. Itsweekly newsletteris sent to 21,500 users. Subscriberspay from 99 per year to access theexclusive and highly practical content, which helps internet marketers get the most out of theirwebsites.

E-consultancy has around 70events lined up for 2005, including roundtables and monthly

Supplier Showcases, where six suppliers pitch to an audience of pre-qualified buyers (typicallybetween 100-200) in a Central London venue. E-consultancy also provides a range of in-housetraining programmes, such as seminars and workshops.

http://www.e-consultancy.com/about/

mailto:[email protected]:[email protected]://www.e-consultancy.com/publications/http://www.e-consultancy.com/publications/http://www.e-consultancy.com/knowledge/whitepapers/http://www.e-consultancy.com/knowledge/whitepapers/http://www.e-consultancy.com/knowledge/whitepapers/http://www.e-consultancy.com/newsfeatures/newsletter/http://www.e-consultancy.com/in/upgradehttp://www.e-consultancy.com/in/upgradehttp://www.e-consultancy.com/about/events.asphttp://www.e-consultancy.com/about/events.asphttp://www.e-consultancy.com/about/supplier-showcases.asphttp://www.e-consultancy.com/about/supplier-showcases.asphttp://www.e-consultancy.com/about/supplier-showcases.asphttp://www.e-consultancy.com/about/training.asphttp://www.e-consultancy.com/about/mailto:[email protected]:[email protected]://www.e-consultancy.com/publications/http://www.e-consultancy.com/knowledge/whitepapers/http://www.e-consultancy.com/newsfeatures/newsletter/http://www.e-consultancy.com/in/upgradehttp://www.e-consultancy.com/about/events.asphttp://www.e-consultancy.com/about/supplier-showcases.asphttp://www.e-consultancy.com/about/training.asphttp://www.e-consultancy.com/about/


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2. Executive Summary

The UK market forweb analytics is showing robust growth in the UK because of the increasingneed for business-driven online measurement in a world increasingly dominated by e-commerce.

E-consultancy estimates that the market for web analytics in the UK was worth 37m in2004 and will grow to 46m by the end of 2005.

The market will therefore grow by 25% in 2005, a period of significant growth whichreflects both the growing influence of e-commerce and the increased sophistication ofanalytics tools.

The most successful providers are those which provide insightful data within business-focussedframeworks, enabling companies to action findings to help them meet their cross-channelbusiness objectives.

Trends within this market include:

Strong investment in financial services, e-tail and publishing Increased boardroom buy-in Growing demand for information which helps to give single view of customer behaviour

across channels (rather than one-dimensional statistics) Growth of web analytics professional services Price competition / downwards pricing pressure Move towards market consolidation

2.1 Further Reading

E-consultancy publishes reports and hosts events to help marketers better understand thepotential of the internet. Related E-consultancy reports to help you improve the way your onlinestrategy include:

Online Marketing Masterclasses Presentations (November 2004)

Internet Statistics Compendium (April 2005)

Online Retail User Experience Benchmarks (November 2004)

*The above reports are free to access for E-consultancy subscribers.



http://www.e-consultancy.com/publications/online-marketing-masterclass-2004/masterclasses.asphttp://www.e-consultancy.com/publications/internet-stats-compendium/http://www.e-consultancy.com/publications/http://www.e-consultancy.com/in/upgradehttp://www.e-consultancy.com/publications/web-analytics-buyers-guide-2005http://www.e-consultancy.com/in/upgradehttp://www.e-consultancy.com/publications/web-analytics-buyers-guide-2005http://www.e-consultancy.com/publications/online-marketing-masterclass-2004/masterclasses.asphttp://www.e-consultancy.com/publications/internet-stats-compendium/http://www.e-consultancy.com/publications/


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3. The Market

3.1 Market Definition

The focus of this report is web analytics in the UK, including both hosted solutions and/orlicensed software which enables organisations to measure and analyse web data.

The guide outlines key trends and challenges within this sector and profiles those providers whooffer web analytics solutions as a core competency.

3.2 Market Value

E-consultancy: the market for web analytics in the UK was worth 37m in 2004 and willgrow to 46m by the end of 2005.

Our valuations reflect the total UK revenues of the vendors operating within this sector, includingincome from hosted solutions, software licences and the professional services surrounding these

solutions.

It has sometimes been necessary to estimate UK revenue figures for individual companies incases where a breakdown of income by country is not made public. For example, manycompanies in this sector are headquartered in the United States with UK income being only aproportion of their total revenues. We reached our total after directly consulting with independentweb analytics experts as well as senior figures working for the major players within this market.

At 37m, the size of the analytics market was still modest compared to the UK market forsearch engine marketing which we believe was worth around 352m in 2004, or email marketingwhich we have estimated as being worth 120m last year.

3.3 Market Growth

The market for web analytics will have grown 25% year-on-year by the end of 2005,bolstered by increasingly business-focused solutions and greater boardroomunderstanding about the importance of effective measurement.

E-consultancy estimates that the market will be worth around 46m in 2005.

Many vendors in this sector have reported strong year-on-year revenue increases for the firstquarter of 2005 which is in line with a trend of robust development in the United States wheresome vendors have also enjoyed stellar growth in recent months.





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The development of this market in the UK is highlighted by the large number of US vendors nowoperating on this side of the Atlantic. They have seen the potential of operating within the UK withthe added bonus of a strong pound, which has strengthened their hand.

Market experts now expect to see a trend towards consolidation after a period of expansion.There is also much price competition among vendors, with downwards pricing pressure a keytrend in 2004 and extending to 2005. This mirrors the email marketing sector, which is in a similarplace with regards to pricing/consolidation/providing added value services to boost margins.

Growth in the web analytics sector is a by-product of the growing prominence of e-commerce andthe increasing need for businesses to measure their online activity as accurately and insightfullyas possible. The burgeoning market is also the consequence of improved analytics which tie inmore closely with business objectives, a development which has led to increased buy-in fromsenior executives who are now able to see their return on investment more clearly.

Jim Sterne, Producer of the Emetrics Summit and President of the Web AnalyticsAssociation, said that growth was strongest among blue chips and large e-commercecompanies, as well as the more enlightened SMEs who rely on the internet as their main source

of revenue.

He added: Larger firms are recognizing that the investment they made in creating - and then re-designing - their websites requires a means of measuring the return on that investment. They arelooking at the Web as another communication medium that can raise revenue, lower costs andincrease customer satisfaction. Therefore, it's worth paying attention to how well it accomplishesthose things.

The vendors profiled in this report cite financial services, retail/e-tail and publishing as theverticals investing the most in web measurement and analytics.

David Day, Managing Director, EMEA, ofNielsen//NetRatings, said: The companies thatcurrently spend the most on web analytics services are mainly blue chips and largerorganisations focused on transactional data, for example retailers and banks. Major publishersalso use web analytics to monitor content performance.

Spending on web analytics is by no means restricted to these sectors with vendors reporting abroad range of companies using analytics in a variety of different ways to add value to theirbusinesses.

3.4 Drivers of Growth and Market Trends

3.4.1 Move from web ghetto to boardroom fuels analytics growth

Web analytics vendors are reaping the benefits of business-oriented solutions which helporganisations to make tangible gains by giving them actionable insights rather than justinteresting data. This is fuelling growth in the market because more organisations understand

that they can get a significant return on their investment.

The market is pretty active,saidJonathan Opperman, Head of eBusiness Strategy at SAS UKwhere web analytics are integrated into a broader suite of customer intelligence solutions. Manyorganisations appear to be investing in third generation web analytics solutions. By thirdgeneration, I mean web analytics solutions that are more business-focused than before andincorporate forward-looking analytics behind the scenes.

As Mr Opperman points out, the most successful companies operating in this sector have alliedpioneering technology with frameworks which make business goals and targets the focus of their



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solutions. This has helped the evolution and progression of analytics from something only ofinterest to IT departments into a tool which is being used by strategic marketers and other seniorexecutives within organisations. Although the technology has become more sophisticated,vendors have made software which is more business-friendly.

Bertie Stevenson, Head of New Business at RedEye, said that innovation in the marketplacemeant that data was becoming higher value for clients: Technical development is also growingfast which means that larger volumes of data become more manageable and valuable

The increasing need for executives within organisations to justify their investments hascontributed to higher levels of spending in measurement and analytics. Accountability of anyspend is becoming more important at board level,said Jonathan Kay, Managing Director ofRedEye.

His comments were echoed by Satin Dattani, Business Development Manager at Intellitrackerwho said that web analytics is born out of the concept of accountability and proof of ROI. Headded: The most important challenge is the provision and delivery of accurate, meaningfulanalysis. The greatest threat is that of poor quality analytics because this makes it difficult forbuyers to separate the wheat from the chaff.

Commenting on the increased buy-in from senior exectuvies, Malcolm Duckett, VP Marketing atspeed-trap, said: Large enterprises are recognising that a very significant percentage of theirbusiness is moving online and they have very little grip on how their online business is behaving.This means that the people who are buying are moving up the food chain less webmasters andmore CFOs.

Despite the fact that web analytics is increasingly on the radar for many companies, providersstill face an on-going challenge in order to make sure that business-driven analytics is high on theboardroom agenda.

Colin Cooper, Commercial Director ofISSEL, distributors forPilot Software, believes that thereis still a great deal of scope for businesses to put web analytics at the heart of business decision-making processes: A real opportunity exists to be able to present a view of activity as the

process towards achieving the objectives of the organisation. Instead of just looking backwardsat past statistics, it is important to be able to see how web activity reflects the progress towardsthese objectives. Focus will therefore change from concentration on the output to anunderstanding of the outcome and where this places you on the journey towards the objective.

He added: I think the biggest challenge is to break out of the 'web ghetto' so that the power ofthe web channel can be unleashed. Too often investment isn't forthcoming because the budget-holding business people can't see the link between web activity with their overall businessobjectives.


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3.4.2 Executives demand information on customer behaviour not just web statistics

3.4.3 Organisations strive for single view of the customer

3.4.4 Increased analytics spend has gone hand in hand with investment in search enginemarketing and e-mail marketing

3.4.5 Companies spend more on services to extract maximum value from analytics3.4.6 Consolidation expected as industry matures

3.5 Return on investment

3.5.1 The benefits of effective web measurement and analytics

4. Costs and Pricing Models

The costs charged by web analytics vendors can vary enormously, depending on the type

of tool and services you require

Some vendors offer separate costing models depending on whether you are operating atSME orenterprise level.

Entry level software packages typically start at about 3,000 but can run into six-figuresums for enterprise level solutions. Licences can be purchased or rented.

o Training, support and upgrades may be included as part of the licence cost but

may cost extra depending on criteria such as the complexity of installation andlevel of functionality.

o Prices may be based on the number of users within the client company.

If you are using an ASP then you are paying for a service rather than for a licence.Similarly, prices will range depending on the complexity and levels of the service yourequire. The monthly cost can be as low as 30 but will increase according to the volumeof traffic/number of page views.

Other criteria affecting pricing includes the level of bespoke reporting required and theextent to which business data needs to be integrated with existing business systems.

Providers stress that the cost of professional services such as consultancy and training- will vary greatly depending on the unique needs of the client.



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5. Finding the Right Company and Solution

5.1 Introduction

In order to identify the right web analytics provider for your business it is important to understandthat different vendors will have different approaches and technologies.

So, in order to get the best match with your own companys requirements, the first step is toidentify exactly what you need from a web measurement and analytics solution. Thedetailed company profiles and market positioning charts contained in this guide will help you tofind the right match.

This section contains some key questions and considerations to keep in mind - and some pitfallsto avoid.

5.6 Who sets E-metrics standards?

The following industry bodies are among those leading the way in defining Web standards,

protocols and e-metrics:

Internet Advertising Bureau (www.iab.net) the industry's leading interactive advertisingassociation. Its activities include evaluating and recommending guidelines and bestpractices, fielding research to document the effectiveness of interactive media, andeducating the advertising industry about the use of interactive advertising and marketing

ABCe (www.abce.org) the source of independently audited data in Internet trafficmeasurement in the UK and Ireland using internationally agreed standards.

ISO (www.iso.org) The mission of ISO is to promote the development ofstandardization and related activities in the world with a view to facilitating theinternational exchange of goods and services, and to developing cooperation in the

spheres of intellectual, scientific, technological and economic activity.

IEEE (www.ieee.org) The IEEE ("eye-triple-E") helps advance global prosperity bypromoting the engineering process of creating, developing, integrating, sharing, andapplying knowledge about electrical and information technologies and sciences for thebenefit of humanity and the profession.

The World Wide Web Consortium (www.w3c.org) The World Wide Web Consortium(W3C) develops interoperable technologies (specifications, guidelines, software, andtools) to lead the Web to its full potential as a forum for information, commerce,communication, and collective understanding.

The recently formed Web Analytics Association, with Jim Sterne and Bryan Eisenberg atthe helm, is set to raise awareness of the importance of analytics and help define best

practice.



http://www.iab.net/http://www.iab.net/http://www.abce.org/http://www.iso.org/http://www.ieee.org/http://www.w3c.org/http://www.webanalyticsassociation.org/http://www.e-consultancy.com/in/upgradehttp://www.e-consultancy.com/publications/web-analytics-buyers-guide-2005http://www.iab.net/http://www.abce.org/http://www.iso.org/http://www.ieee.org/http://www.w3c.org/http://www.webanalyticsassociation.org/http://www.e-consultancy.com/in/upgradehttp://www.e-consultancy.com/publications/web-analytics-buyers-guide-2005


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6. Market Positioning Charts

6.1 Explanation for Chart 1 Type of Solution (Part 1)

The vertical axis charts to what degree the vendors see themselves as focusing on web dataonly, versus being able to integrate data from other sources for example, lifestyle data, point ofsale data, data from CRM systems or other back office systems.

The horizontal axis charts how far the vendors see themselves as a tool suited to solvingparticular web measurement and analytics challenges (e.g. e-mail campaign measurement)versus a more business-wide and open analytics platform with a whole suite of tools.

As you move towards the top right of this chart the solutions typically get more expensive and areaimed at larger enterprises. Equally, in the top right the lines between web analytics and moregeneral business intelligence become much more blurred and the vendors are beginning tocompete more directly with the likes of SPSS, SAS and other data analysis tools.


Web data only

Integratesmultiple data

points

Best for ad hocprojects / point

solution for specificneeds

Analyticsplatform/suite

Wherewe

are now

Where weare going


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The vertical axis charts to what degree the solution is more plug and play in its approach versuspositioning itself as a tool which can be used for detailed, bespoke analysis and reporting. Somesolutions focus more on off the shelf, and limited, reporting to make them easier to use, otherstake more of an analytics workbench approach which can be finely tuned but which requireanalyst expertise.

The horizontal axis charts whether the vendor feels themselves to be focused on particularindustry sectors or not.

Again, as you move towards the top right of this chart the solutions are typically more expensiveand targeted at larger enterprises with in-house analytics skills and a much stronger interest inhaving a solution that is tailored to their industry sector.


Off the shelf &

ready to go/plugin and play

Tool for

bespoke work

Strong industrysector focus

Sectoragnostic

(all sectors)

Where weare now

Where weare going


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The vertical axis charts to what degree the vendors see themselves as providing a service ratherthan a software product. Some vendors prefer to be just that product vendors. Others are keento position themselves as service and solution providers of which the technology is only a part.The added value comes from services such as: analysis and optimisation, account management,

training and education.

The horizontal access charts how far the vendor crosses over to provide functions such as e-mail or SMS marketing. Many vendors will be able, say, to produce e-mail lists based onbehavioural attributes gleaned from data analysis but some go a stage further and will thenactually deliver the outbound marketing campaign and then track the results. This means thevendor is starting to enter the (e)CRM space and compete with vendors of online marketingplatforms.

As you move towards the top right of this chart, you are looking at vendors who are moreinterested in selling marketing services, and likely to be more interested in working in partnershipdirect with the end client, than those in the bottom left who are most interested in softwareproduct development and more likely to rely on re-seller relationships to work with the end client.


Provider of aproduct

Provider ofservices

Used for datacollection, analysis,

reporting

Used to deliveroutbound marketing

communications

Where weare now

Where weare going


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6.4 Explanation for Chart 4 Company Culture

The verticalaxis of this chart shows the company's preferred working style in terms of whetherthey are more process-oriented or flexible and ad hoc.

Thehorizontal

axis shows the companys size relative to its rivals in the market place..


Flexible, ad hocapproach

Predictable andprocess-driven

Small compared tocompetitors

Large comparedto competitors

Where weare now

Where weare going




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8. Supplier Marketplace and Profiles

SAMPLE VENDOR PROFILE FORM

Company DetailsCompany Name

Company LogoURLUK Head OfficeAddressOther office locationsContact NameContact TelephoneContact e-mailCompany PropositionBrief Company HistoryNumber of UK FullTime Employees(including breakdown

for key functions)Turnover for 2004 orlast accounting period(including dates)Projected Turnover2005USPWhat sets you apartfrom competitors?Clients (current)Current client listCase StudyUK Case Study

Other background informationHow long have youbeen in this businessin the UK?Details of bestpractice policy andethical approachWhitePapers/publications?Details of UK supportSystems Integrationwith otherproducts/suppliers?

What type of service do you offer? (Answer yes, no, n/a, or add more details / services whererelevant)ASPIn-house solutionTrainingConsultingABCE auditsE-mail (tracking &reporting)



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Search EngineMarketing (tracking &reporting)Ad Servers (tracking &reporting)3G/Mobile (tracking &reporting)Rich Media sites(tracking & reporting)Product DetailsProduct Name (s)Product OverviewCharging model andpricing Guide (pleasebe as specific as

possible)Data CollectionPage taggingLog file analysisNetwork-Level/Packet SniffingWeb-Server API/Plug-inAnalysis functionality (Answer yes, no, n/a, or add more details / services where relevant)Bespoke reportingMenu reportingFixed reportingPath analysis (pleasespecify if this isaggregate, can besegmented by pastviewing or responsebehaviour and/or can

be segmented bypersonal details)Customerprofile/segmentationbased reportingCampaign analysisE-mail/mail listproduction (create alist based on pastbehaviour / attributes)Tracking capabilities (Answer yes, no, n/a, or add more details / services where relevant)Unique user validationSupport for permanent

or session cookiesNon-human trafficidentification (e.g.robots/spiders)Dynamic websitetracking/reportingBanner click-throughsE-mail (open rates,response rates,conversions etc.)



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Custom links/landingpagesPage views (all orlimited/aggregated)Products bought(undistinguishedand/or by categoryand product ID, value,

price)Personalinformation/form data(please specify whatdata you can captureincluding name,address etc)Third Partyinformation data (canyour systems matchand add data fromother systems?)




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