Web analytics tools can be looked upon as a subset of business intelligence (BI) software. While BI can apply to almost any electronic data gathered and organized by an enterprise, Web analytics tools focus on data gathered from Internet Web sites. These tools, multiplied in parallel with the growth of commercial and content Websites and their business, promise to deliver the most measurable medium yet invented. While BI software may target the CIO of an enterprise, most Web analytics vendors presently target the VPs of Marketing or the advertising agency as their customer.
The vendor landscape in this marketplace is still unsettled. A good friend of mine is responsible for a major business Web site and he has spent a considerable portion of the last year troubleshooting an analytics solution from a major, supposedly well-established vendor. The last I heard, they were considering jettisoning the software and their substantial investment in training, customization and support and were almost ready to start over.
Price is no direct indication of quality either, and products range from free to six figures. Selecting a vendor requires some serious homework and this guide is intended to be a framework for such research.
What You Can Do with Web Analytics
A business may use Web analytics to attract more site visitors, and to retain or attract new customers for goods or services, whether the commercial transaction takes place online or offline. They may use the tools to increase the dollar volume each customer spends. Some sites use analytics to figure out how to increase the conversion rate (or "yield") for people coming to the site. Other analytics can measure and improve the user satisfaction with the site experience.
Media sites that are dependent on advertising or sponsorship, rather than commerce, may use Web analytics to help create a more engaging user experience or to gauge the impact of viral or referral marketing. Results of Web analytics are often presented as graphs, tables, and charts.
Web analytics tools can help you learn more about your online customer, about your Web site and its performance relative to the market, and about the user experience in traversing your site. Other tools can help you optimize the content and structure of the Web site.
How are visitors getting to your site? How are they using your site? Are visitors converting into customers? Which marketing efforts are paying off?
In some cases, users of the data uncovered by the analytics tools may be used not just by the marketing department but also by other employees, upper management, even by customers, vendors and distributors.
Trend analysis is an important component of most Web analytics. How are you doing compared to yesterday and compared to the same time last week or last season? Are you headed towards a singularity event such as a site outage, or product shortage that requires exceptional action? Are you ready to deal with a sudden change in market conditions caused by external factors such as a news event?
“There is no shortage of data,” exclaims Mark Wachen, CEO of Optimost, when referring to the extensive reports that most Web analytic vendors provide. “But people still have a hard time knowing what to do with this data, with how to make it actionable.”
The Decision Process
While most BI tools are sold to highly tech savvy buyers, it is not unusual for the Web analytics sales process to be less streamlined on both the buyer and the seller side. Agencies and marketing departments increasingly are being asked to evaluate software and services that are getting to be more and more technical and complex. Of course the cost of the software (or ASP service) is a small component of the total cost of ownership, which includes training, setup, opportunity cost, integration and lots more. Free solutions may often be more expensive than commercial alternatives as a result.
You must first determine current and future business objectives of using Web analytics. Once key objectives are identified, the parameter list below can be a menu of possibilities in helping make a decision. Some factors will be more important to you than others given your unique situation.
Parameters to Evaluate
Most buyers evaluate software tools based on lists of features. Of course what the software can do is very important and you should make a list of necessary and desirable features and benefits and match key candidates against the list. There are several other dimensions of the search that can be just as important. These are listed below:
Once you define your key business objectives, find a good suite of Web analytics tools is not hard. There are many choices and the parameter list will help you navigate the vendor list to find an appropriate solution.
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