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Analyzing Web Analytics

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:

  1. Installed Software vs. Hosted Service

    Some tools are only available as a piece of software that you must install on your Web servers. Others are offered only as a hosted service running off the vendor’s (or a third party’s) Web server. Increasingly, many tool vendors offer both alternatives and some even let you switch from one to another if your needs change. A few years ago, conventional thinking was that if you did not have direct access to the people supporting the Web site at a technical level, you must use a hosted service, that is was somehow “simpler”. Today most people realize that even a hosted service requires some technical integration. In fact, failures in a hosted service can sometimes affect the operation of your main Web site. Most buyers should look at both alternatives.

  2. Evaluation Version

    Given the complexity of these tools, it is always a good idea to “try before you buy.” Most software vendors offer trial downloads that are risk free. Hosted services may also give you a chance to experience the benefits before making a big commitment. If substantial integration or billable professional services are required before you can see any benefit, you should request a small Proof of Concept project that validates your assumptions before you make a major commitment of resources.

  3. Installation/Training: First Party or Third Party

    If the solution is simple or if you have access to a sophisticated technical staff, you may be able to get started on your own. In other cases, it may be desirable to have the vendor install and train your staff. For the high-end solutions third-party resellers and system integrators are available.

  4. Batch vs. Real Time

    Some tools started out as Log File Analyzers. After you install the software, it writes a text or database file documenting user activity as it happens. Analysis is performed in batch mode, after the fact. This still works well for many Web sites. Some tools offer real time analysis and if this is what you want it may be worth paying a premium for. Do check on hardware and bandwidth requirements if you do choose a tool that offers real time reports.

  5. Integration with Third-party Software

    In the early days most tools worked in standalone mode. Today most sites get data from a variety of sources and software packages. Some tools offer better integration with third-party software. Check your suite of current and intended applications for the possibility of integration with the Web analytics tool. Decide if such integration is critical to the success of your project or simply a “nice to have.”

  6. Information to be shared with partners in the supply chain

    A busy automotive site may wish to share specific analytics data garnered from its Web site with its dealers across the country and its key suppliers. If this is the case with you, you should investigate how frequently and how fast such data needs to flow.

  7. Community Support

    You can always call the vendor or your professional services company for support. However, packages with large installed bases and in particular some of the freeware may have a well-established community of third-party supporters. Such a community can be great reference point for identifying bugs, workarounds and creative shortcuts.

  8. Scalability

    Be sure that the solution you pick can handle current and projected traffic on your Web site. And be sure that you check against anticipated spikes in activity.

  9. Ease of Implementation

    Some solutions are simple and swift to implement, while others can take longer. Don’t get surprised.

  10. Tool Flexibility

    Can your chosen tool be easily customized for the given situation? What if IT decides to change the infrastructure, will you need to buy another tool?

  11. Vendor’s Track Record

    It is always important to check with customers whose situation is similar to yours. Ask if the vendor fulfilled the promises. What unexpected bumps did these customers encounter? If the vendor has recently been the subject of a merger or acquisition, verify if the support process is impacted. Further M&A activity is expected in this space, so check around to determine if this may impact you as a customer.

The Takeway

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.

Gunjan Bagla is a principal of Amritt Ventures, an advisory service facilitating trade between the United States and India. Mr. Bagla provides guidance in entering new markets, global strategy execution, finding and managing vendor partners, and...

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