Also in this series:
- Make measurements meaningful: How to create an actionable web analytics strategy
- Revealed: The secret to selecting the right web analytics solution
- Staff, structures and budgets: How to build your web analytics team
- Why web analytics goes wrong – and what to do about it
- The processes for perfection: Applying error theory to analytics
- Web analytics in action: Lessons from Villa Plus
Jim Sterne and Joe Stanhope outline the complex and fragmented web analytics marketplace and provide advice on how to successfully negotiate it.
What once was a curiosity, is now accepted as a key capability to understand customer behaviour and improve customer experiences. Web analytics has certainly come a long way.
And while it is merely one part of the broader digital analytics landscape, web analytics is firmly on the business agenda in 2013.
Jim Sterne, founder of the Digital Analytics Association, says: “There is a recognition that it is not just a bunch of nerds playing with HTML and it isn’t just the ‘new economy’ or ecommerce – it is a different way of doing marketing. And instead of just experts waving their hands and saying ‘this is the future, get with it or become a dinosaur’, it is actually producing financial results. So companies are getting serious about it.”
However, he adds: “But it is happening unevenly – there are companies that are taking great advantage of it rapidly, and others that know they need to, but just haven’t got around to it yet.”
Indeed, while everybody acknowledges the need to capitalise on web analytics, not every business has the organisation or cashflow or the senior management’s commitment in place to make it happen. “There is maturity in the opinion of the subject matter, not necessarily in the implementation,” is how Sterne describes it. And sure enough, implementation varies widely around the world, country to country, company to company, department to department. So while you have the Amazons, the Dells and the eBays of the world where the whole company is analytics-driven, you also have organisations starting out at the beginning of the journey.
Challenging technical environment
But however far along the path they are, no matter how large the organisation, and however much money they are prepared to throw at it, they are sure to encounter the same obstacles. In particular, businesses must negotiate the complex and fragmented analytics vendor marketplace.
The first layer of complexity is that a huge variety of tools are necessary. Sterne demonstrates: “A classic web analytics tool looks at the log files or page tags and records behaviour on the site. In order to match that up with search marketing tools, I have to pull the data out of both and put it into a third system where I can mingle the data together and make sense out of it. But I’m also collecting voice of the customer data and social media data, and doing testing and experimentation with site performance tools. So I have this huge variety of tools and that creates trouble with integrating the data.”
New data streams are also emerging all the time, while the cannibalistic nature of the digital analytics marketplace means that the vendor landscape is in a constant state of flux. And there are further issues.
“It’s a challenging technical environment because there isn’t a single tool that does everything,” explains Joe Stanhope, principal analyst serving customer intelligence professionals at Forrester. “You can’t buy one system and out-of-the-box can do the breadth and depth of analytics that companies are looking for. That puts us in a situation where you have to compile an entire stack of tools to handle the data collection, the processing, the strategy, distribution, the actual analysis work itself. Some of this is because we're talking about a widely diverse amount of data that comes from very different sources and the data types are very different.”
This inevitably leaves businesses with a major dilemma – do you get an integrated suite, and accept the drawback that it is not going to solve all of your problems and answer all of your questions; or do you buy the best individual tools, to ensure your problems are solved appropriately, but at the cost of having to do your own integration, and missing out on an opportunity to take advantage of Big Data?
A moving target
While Stanhope does hold out some hope for a compelling single product that has mastered a collection and storage of everything, he warns that because the likes of social and mobile are evolving so fast, the industry is “chasing a moving target”.
And he adds that in some cases the companies are not helping themselves.
“Companies also grapple with this because they have made a lot of legacy investments,” he explains. “Perhaps they've already bought a web analytics tool, maybe they already have some tools to handle mobile, maybe they already have a big CRM system. Well they don't want to throw those investments out - they work very well for certain purposes - and they don't need to be thrown out. But again, they need to fit into this larger puzzle. And if I don’t want to throw out my current system but I need more, what's my only choice? Well, I have to buy more tools. I need more technology to advance what I already have. So it's also sometimes self-inflicted because we want to leverage our legacy investments.”
So what’s the solution for businesses that find themselves bogged down by the complexities of the web analytics marketplace?
“First, I would really advise people to think about what they actually want to do with the data,” Stanhope continues. “Start with the top - what information drives your business, what are your goals as a business, how do you plan to take action on this analysis? I don't want my customers to end up with just another pile of reports to look at every morning when they sit down at their desk. If I give you all this insight about social channels or your mobile applications what are you going to do with it? Because that really affects the data you need to collect, who the users of that data are, what kind of tools you need to expose that information and collect it.
“Also, I talk heavily about flexibility - if no tool does it all, think about what is going to be the hub of this system, where is this information going to flow into, what's going to be your centre point for this tool, because that's going to determine what your eventual environment is for this data and the analysis and everything else will basically integrate with that. So to start with, what do I need out of this, and that determines what data I need and what it needs to look like and then what is going to be the centre point and foundation of this environment that I need to build to accomplish those things? After that you are going to have these other tools that can handle the other pieces and you need to verify how everything integrated together. If no one tool does it all then I need an ecosystem where these disparate tools can talk to one another and then it becomes a collection of integration points.”
But negotiating the vendor marketplace is only one part of the web analytics journey. The vast majority of companies that do business on the web have some form of analytics tools in place, and there is widespread acknowledgement of the importance of performing analysis to understand the performance of the channel and the performance of customers as it relates to the channel. Where companies can really struggle, however, is when they have invested in a tool and receive the reports, but are left wondering how to use it to drive their business. This, says Stanhope, is a people and process issue.
“Web analytics is not magical, it doesn’t fix problems on its own. You need people to make sure that the tools are working properly and collect the right information and make sure the right people at your organisation can look at that information and interpret it and take action on it. And that's where a lot of organisations struggle.”
Staffing a web analytics programme can be problematic, not least of all because there is a dearth of talent available.
Sterne explains: “The shortage of talent is because it has to be somebody who understands where the data comes from. If I say we’ve got a bounce rate of X, do you really know how the bounce rate was calculated and what was included and what was not included? If I say we’ve got a 3% uptick in positive sentiment in Twitter, do you understand how that was calculated so you know whether 3% is statistically significant or not? You have really got to understand the guts of it.
“But on the flip side you have got to really understand the business side of it well enough to look at the numbers and recognise that what is happening will be interesting to the people in production planning because it is a sign of purchase intent, or of interest to the PR people because if they don’t respond the company is going to look silly, and so on. That is a really widely unique person, who understands the tech and enough of the business model to know how it all works.”
And because there is a real shortage of people who have this very unique mix of technical and analysis skills and business knowledge, not only are they hard to find, but once hired they are hard to retain because they’re in such high demand.
In the longer term, the shortage should be resolved – more people will be coming out of schools with qualifications in analytics and digital marketing, because there are masters degree programs and the like now being added to educational rosters. More qualified people in the jobs pool will help enormously.
But businesses will also have to figure out how to retain these people; how to show a web analyst, for instance, a career path in the company. Stanhope explains: “A lot of these people get hired and they sit around all day making reports. Well, nobody wants to sit around all day making reports. They want to have a career. At what point are we going to see a web analyst move up in the career and get to the point where they're VP of analytics at a major corporation? So organisations need to take responsibility a bit and train and develop and cultivate and promote their people.”
But for the time being, until the talent pool expands, businesses will have to be creative about the people they hire. “If you can't find the perfect person, you start finding different people and you train them up,” advises Stanhope. “You find people from an academic background, you find people from technical backgrounds, and you find a mix of experienced and entry-level people. So we're going to start seeing much more creative skill sets coming into our industry as well.”
The website is more important than ever as a focal point in customer experience. But users are also having to deal with an evolving customer experience where the site is part of a bigger ecosystem, featuring the likes of social, mobile and direct response channels. The website, and web analytics, are now part of a much bigger puzzle. Figuring out where website interactions fit in with a customer’s social interactions and mobile interactions, and the email they received, is the big challenge. But even though putting the web into context in the complete customer experience is the broader goal, cracking web analytics remains a challenge unto itself.
Sterne concludes: “Businesses now know that web analytics is a requirement, and that they have to make it happen, so they’re exploring what’s necessary and whom they need to hire. It’s no longer a curiosity. But it’s like the William Gibson quote – the future is already here; it’s just not evenly distributed. And so implementation still varies widely.”