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It’s a schizophrenic time for Web analytics tools, research shows

The onslaught of social media and mobile devices is thrusting Web analytics into a situation somewhere between maturity and evolution, according to a new report.

Web analytics software has evolved so dramatically in the past few years, Joe Stanhope, a senior analyst at Cambridge, Mass.-based Forrester Research Inc., believes the term no longer means what it once did.

“In some ways … Web analytics is a misnomer now,” he said, “because it doesn’t fully describe the scope of what these tools or what the people using them are addressing.”

Stanhope recently released The Forrester Wave: Web Analytics, Q4 2011 on Web analytics vendors, specifically those serving enterprise-class businesses. He based his rankings on 80 criteria, which included data derived from product evaluations, online polling as well as interviews with vendors and reference customers. The report singles out, for example, Webtrends, Adobe, comScore and IBM for their product strength and vision, but it also suggests the industry has become schizophrenic -- seemingly mature on the one hand and in the midst of an evolution on the other.

Collecting and analyzing information on how customers use a website -- or what Stanhope refers to as traditional Web analytics -- is still necessary and important; that kind of functionality has become “relatively ubiquitous” among most, if not all, vendors, he said.

“But it’s not just about the website anymore,” he said.

Businesses are also interested in utilizing social media sites, capitalizing on mobile applications and keeping tabs on user-generated content. These new online data sources are creating fresh challenges and inspiring additional demands for Web analytics programs.

“In some ways, traditional Web analytics is, I hesitate to call it completely mature, but it’s maturing,” Stanhope said. “The rest of it is really in flux as far as how we’re going to address these emerging channels and the applications of mobile and social.”

Web and social and mobile, oh my
Customers no longer interact with businesses the same way they did five or six years ago. Today, they’re exploring information on Facebook, surfing the Web on smartphones, making purchases from laptops and tablets or researching online but holding off on purchases for the brick-and-mortar experience. Businesses are interested in exploiting what they can from these multiple channels to help understand their customers more completely, Stanhope said.

“Doing pure Web analytics and just understanding the activity on your website in a bubble isn’t particularly helpful anymore,” he said.

Vendors are releasing products that address the new channels and, in some cases, businesses are leaning on employees who’ve normally performed Web analytics to broaden their scope and tackle the world of social and mobile analytics as well, he said. This kind of a digital marketing strategy makes sense to Stanhope because websites still tend to be central to the customer experience for many organizations.

“The website isn’t always the beginning or necessarily the end of [customer experiences], but all roads tend to lead through the website at some stage in the customer relationship,” he said.

For that reason, Stanhope believes Web analytics is well-positioned to expand and grow.

“The core Web analytics functionality is something you can get almost anywhere,” he said. “The real areas of evolution are happening around the emerging channels.”

Building and buying: New challenges, new trends
The newfangled positioning of Web analytics also means challenges -- both old and new -- need to be addressed in light of these new sources of information.

Stanhope notes the first challenge centers on the data itself: data collection, data availability and data quality.

“Facebook, Twitter, mobile applications, mobile browsing, your terrestrial website all require different kinds of instrumentation and tracking mechanisms,” he said. “Collecting data, putting it into a single place where it can all be analyzed and a level of quality is, of course, job No. 1.”

Vendors are adding additional data collection functionality into product offerings by either acquiring companies that can supply the technology (last year, for example, IBM bought Coremetrics) or building it themselves, Stanhope said.

End users are also looking for ways to make information more actionable, which Stanhope calls “a big trend right now.”

“I think, at their worst, many Web analytics tools are simply used as a reporting mechanism,” Stanhope said. “More and more, marketers want the data to be actionable. Tying information to multichannel campaign management, segmentation and site optimization tools so that you can do analytics and then immediately use those insights to take some kind of action.”

In addition to building or buying tools for additional data collection functionality, vendors are extending their products out further so that once data is collected, it’s also available for dashboards and reports.

“A lot of them have acquired site optimization tools that do testing and behavioral targeting,” he said. “A lot of them have built out or acquired pay-per-click search marketing management tools or recommendation engines.”

Tied to actionable insights is the trend of usability -- or what Stanhope called the “democratization of analytics.” Web analysts remain an important faction for businesses, but Stanhope said more and more employees are beginning to see the value of data and are interested in taking advantage of what it can offer. Faster accessibility to the data and the analytics means more real-time capacity.

“A lot of vendors in this space -- new and historically strong vendors -- are making the usability of these tools very suitable for a nontechnical audience,” Stanhope said.

While vendors strive to add more functionality and usability into their products, the landscape has become difficult to maneuver, especially in today’s economy, because of increased competition from free Web analytics offerings.

“People are thinking about how much money they spend on tools and how these investments are working out,” he said. “I think some of that is based on post-recession austerity … but it’s also driven by vendors, like Google, offering free tools, like Google Analytics.”

Stanhope said many of those interviewed or polled for the report are seeking ways to balance the line of business’ need with their technical requirements, and they’re also questioning weighing value against price because of these free tools.

“When [businesses] do choose to spend money on tools that have more functionality or whatever, they think about it differently because they know there are free alternatives out there,” he said.

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