March 24, 2006, 12:00 AM

Where greater complexity and easier understanding come together

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It’s a seeming riddle: what is becoming more complex at the same time it’s becoming easier to understand? Take a close look at industry developments over the past few years, and it’s clear that analytics fits that description.

It’s more complex in that analytics tools today are capable of providing information in greater detail than ever before. Online marketers can compare the performance of different campaigns, see trends in what sells or doesn’t, diagnose problems at the customer interface and extract from the analytics-eye view of customer behavior insight that drives results. In fact, a recent report from the Chief Marketing Officer Council found that of more than 1,000 companies surveyed, companies that tracked marketing metrics outperformed those that did not by as much as 37%. Simpler interfacesBut if analytics’ utility is increasing its following among business users, that’s had the effect of forcing analytics vendors to find ways to make the complex data easier to understand and accessible to a broader range of users. Vendors are responding to demand with simpler, easier product interfaces. “The marketers we were dealing with a couple of years ago had a very high tolerance for getting in and digging through the numbers,” says John Mellor, vice president of marketing at web analytics provide Omniture Inc. ”Even if the interfaces weren’t all that easy to understand, they were willing to dig to get the answer they wanted. The new audiences look at analytics as just another input into their job that has to be straightforward and simple. That’s driven us to build interfaces into our products that are simpler.”The broadening and deepening use of analytics is spurring rapid development in the analytics marketplace. Analytics got its own trade and professional organization this year with the launch in February of the Web Analytics Association, a consortium of web analytics users, vendors and professional service providers. The analytics market has been estimated at nearly $400 million in software and services. The market’s prospects have what Forrester Research Inc. has estimated are as many as 80 analytics vendors elbowing each other for a piece of the pie. And despite customer longevity or marketplace penetration claimed by a few leading players, marketers’ apparent willingness to change or at least look at other vendors suggests the opportunity’s still wide-open. Forrester has estimated that in its relatively short experience with web analytics, the average company already has purchased 1.8 analytics packages and reviewed 2.6 vendors. Recently, analytics has started moving beyond its original focus on customers’ on-site behavior to track and compare the performance of different campaigns that bring them there. Analytics users like MotorcycleSuperstore.com, for example, are, just in the past year, realizing a better marketing performance from changes they implemented after seeing some of their first campaign analysis results. Campaign analytics showed founder Don Becklin that one of the best sources of traffic to the site wasn’t anything he had to pay for on a cost-per-click basis because it was already in his hip pocket: a content site, built for enthusiasts, which linked to the e-commerce site.Growing user experienceThat insight gleaned from analytics will shift the spending of marketing dollars at MortorcycleSuperstore.com. Becklin expects growth in the percentage of his overall spending that goes to support development of the content site to exceed growth in what he’s spending on keyword buys and affiliate marketing, though he continues to spend on those initiatives as well. Analytics has answered his questions about the marketing value of the content site by tracking how much traffic it sends to the e-commerce site, and how much revenue that traffic drives. A factor spurring the development of more sophisticated analytics tools is the growing experience of the business analysts that use it. “Within the marketing department and within certain analyst groups in the organization, there’s the need to dig deeper and have fewer constraints in how they explore the data. And they have to have a response more rapidly than in the past,” says Mellor. These experienced users are looking to analytics to dig ever deeper into customers’ online behavior to better justify marketing spending. Manufacturer Toshiba, for example, is working with one analytics vendor to better establish the value of different keywords at different phases of the purchase cycle.The last get the bestHistorically, analytics has assigned the credit for a purchase to the last online campaign in what may have been a protracted buying process: the campaign in which the customer actually transacted a purchase. That means the last marketing activities get more revenue attribution so they look more profitable, and the early-stage awareness and brand-building advertising activities get understated or not stated at all. That stands to change at Toshiba as the manufacturer works with the vendor to pool information on customers’ historic interaction with the products they eventually purchased online, and use the data to attempt to weight the value of marketing efforts at each stage. The exercise will consider such efforts as banner ads and portal placement. The answers will have a direct bearing on marketing spending and how ROI is calculated on the investment. But it’s no longer just business analysts-or even just the marketing department-who are looking to analytics to help them learn about their business and improve performance. One trend of the last year has been the broadening of analytics use into other departments: finance, product development, even human resources. For example, product development can benefit by understanding not only what customers are buying, but what they are looking at on a site. Product development teams can get a better gauge of customer interest by digging into analytics data to find which products sold best, what characteristics they may have had in common, and also what shoppers looked at most but didn’t buy–all of which could be fed into product development plans for upcoming seasons.The screen saver optionWith the broadening use of analytics within companies meaning that it’s reaching new users less experienced than users in the marketing department, some vendors are following the trend by creating simpler interfaces and easier access. Mellor cites ClickMap, a feature of Omniture’s analytics suite, as an example: The graphic page overlay uses a sort of heat map format to show which page areas are getting the most user clicks, thus providing an instant read on the popularity of different links, offers or features. Another feature of its new release, SiteCatalyst 12, is one that pushes the tool’s viewing dashboard showing live analytics data out to the user’s screen as a screen saver which displays during inactive periods when the screen would otherwise be dormant.“Executives talk a lot about wanting this information, about bringing it into the boardroom,” says Mellor. “But of any of these new audiences, executives have the least amount of time to log on to the product and find the analytics report they need. So what we have done is to come up with ways to proactively push that information to them in a way that’s super-easy.”
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