But the social network’s advertising revenue grew 18.4% during the quarter.
The free Google Analytics tool is introducing many retailers to the idea of measuring site activity and paving the way for them to adopt more robust analytics tools.
If customer data points were gumdrops or jawbreakers, then e-retailers using web analytics would be like kids in a candy store. A pile of data on what brought customers to a site, what they bought and why can be as tantalizing to an online marketer as a wall-sized display of jelly beans is to a pre-teen.
But as kids-and marketers-can discover, too much of a good thing can overwhelm. Web analytics-both as software and as hosted service-can track virtually any consumer interaction with a web site, including what path consumers take from the larger web universe to the site, and what they do once they arrive. But for any of the innumerable pieces of data gathered by web analytics to be of use to site operators, they must be turned into action.
And that’s where web analytics starts and ends for some e-retailers: too much data to make sense of or even to suggest a starting place. For others, it’s the cost of entry, ranging from a few thousand dollars a month to hundreds of thousand a year for technology and dedicated staff, that has put web analytics out of reach.
In November 2005, search engine Google entered the web analytics landscape with an offering aimed at both issues. The downloadable Google Analytics has a streamlined interface that strips out features some users may find confusing or not immediately useful, and makes what’s left easier to understand.
And the tool is free. For the investment of some time and a bit of elbow grease, online marketers unequipped to manage or afford costlier packages from the market’s established analytics vendors have access to a number of the basic analytics functions-for instance, data on which advertising campaigns are referring visitors to the site, or at which points in the sales conversion funnel shoppers drop out. To speed up the learning curve or go deeper, Google has trained and certified some 50 independent consultants that retailers can hire on their own.
“We looked at the analytics market and saw that it was still relatively small as far as the number of sites that have access to analytics information, and we recognized an opportunity to bring this kind of information to many more sites,” says Brett Crosby, senior manager of Google Analytics and a co-founder of Urchin, the web analytics vendor acquired by Google in April 2005 that now forms the core of Google Analytics. “It’s applicable to any type of web site, but the people out there trying to drive a business online-those are the folks for whom it’s essential to have this kind of data.”
The vendors who make a living selling analytics packages say they don’t view Google’s entry as competition. They differentiate their offerings with advanced customer segmentation capabilities and partnerships that provide easy integration with many third-party vendors of other functions retailers want to integrate with analytics data.
Some analytics vendors are moving from discrete technology providers toward being part of a comprehensive e-marketing platform, saying the integration makes web analytics even more effective-ClickTracks Analytics Inc.’s integration with Lyris Inc.’s Lyris HQ platform is one example-and that’s not an option with Google Analytics. They also cite distinguishing features such as more visually compelling interfaces and their offerings’ greater ability to customize reporting.
“We’ve never faced Google Analytics in an online retailer sales situation. Enterprise retailers require advanced merchandising and audience segmentation capabilities that Google Analytics lacks and WebTrends has,” says Barry Parshall, director of product management at analytics vendor WebTrends Inc.
But even if Google Analytics isn’t exactly knocking any of the established players out of position, the free tool has been welcomed by a lot of retailers. Where Google does position directly against fee-based analytics packages is where any part of those vendors’ offerings are geared to businesses less experienced with analytics, or those too resource- or time-strapped to buy or manage analytics capacity in house. Bigger and more experienced online retailers have embraced Google Analytics for specific uses, for instance, managing their Google AdWords program, alongside other web analytics packages they run for other functions.
Keeping it simple
Beyond making web analytics in simplified form available free of charge to more online marketers-and the tool’s users now number anywhere from “hundreds of thousands,” according to Crosby, to outside estimates as high as 1.5 million-Google’s analytics rollout stands to do a lot for Google as well. Properly applied, web analytics can show online marketers how to create a better site experience for consumers.
“If businesses can see the value of driving more traffic from search and can tailor their ads more effectively, they are going to see a higher conversion rate on their ads and they are going to advertise more frequently with Google,” Crosby says.
Google Analytics also promises to grow the web analytics marketplace overall, as retailers who have an opportunity to learn on its basic, free product eventually graduate to more advanced tools elsewhere. It’s a fact recognized by the other vendors. “We love it,” says John Squire, chief strategy officer at Coremetrics Inc., whose clients range in size from small to mid-sized web-only merchants to large national chains. Squire positions the analytics firm’s entry-level offering as “a step up from Google.”
“Google evangelizing analytics to the masses has been a positive force for Coremetrics,” he says. “Anyone who has used Google Analytics for any amount of time understands what they need out of their next solution for technology and service.”
A big question
That raises the question: While Google Analytics offers a basic package now, will it one day add advanced features placing it head to head with the vendors of more complex analytics tools? Google makes no comment other than to reiterate it has no plans to charge for its 2-year-old analytics product. And industry analysts are careful to label any remarks on the subject as speculation.