Friday, May 15, 2009

Web Analytics: Will it Change Online Marketing Forever?

Gaurav Arora, PGP-2010, IIM Shillong

Every day thousands of people shop on the Internet. Increasing internet penetration, easy availability of computer hardware and evolution of an online market space that can cater to almost all of our needs have played a great role in making internet shopping a part of everyone’s life. As a consequence, a large number of companies saw marked shifts in their marketing strategy over the last decade.

As online marketing channel started gobbling up larger parts of the marketing budget, people started questioning if it deserved such attention. Especially after the dot com bubble burst, the urgency to establish the accountability of the online marketing channel was great. Several tools and software were created for the purpose and made inroads to the market. And a new field called Web Analytics emerged.

Web Analytics
Web analytics is the measurement, collection, analysis and reporting of data from websites for purposes of understanding and optimizing website usage. The data generated by web analytics tools is classified into several user defined parameters called web metrics.

Web metrics are tools to assess how people are interacting with the website and what changes need to be incorporated in the strategy of internet marketing as a whole and website in particular. Off-site web analytics refers to web measurement and analysis irrespective of whether you own or maintain a website. It includes the measurement of a website's potential audience (opportunity), share of voice (visibility), and buzz (comments) that is happening on the Internet as a whole. On-site web analytics measures a visitor's journey on the website. This includes its drivers and conversions; for example, which landing pages encourage people to make a purchase. On-site web analytics measures the performance of your website in a commercial context. This data is typically compared against key performance indicators for performance, and used to improve a web site or marketing campaign's audience response.

Evolution of Web Analytics
Web Analytics has undergone several phases of development even though it shot to fame only in the last decade. One of the earlier techniques that were used for measuring the clicks on the site was the analysis of the log file generated by the server. This was one of the most cumbersome but a straight forward method of measuring and analyzing Web metrics. It required a dedicated team for the purpose of generating customized reports.

Soon enough, proprietary softwares were developed and they gained popularity. This was the period when the online market was still in nascent stage. What these proprietary softwares led to was more confusion and speculation. The basic problem was- different software gave different definitions to the same web metric. For example, length of session for single-tabbed browsing and multi-tabbed browsing will be different. But while only few software’s would recognize that different browser tabs meant one single session, others had no provision to do that and would consider every browser tab as a different session.

By late 1990's i.e. the dot com bubble era, Web analytics had become a serious issue mainly because of the success of companies based on the model of internet marketing like and, and the sprouting of huge number of similar followers. This was the time when the need to standardize and regulate the web analytics was taken seriously and Web Analytics Association (WAA) was formed.

What followed was unprecedented number of free and proprietary tools, and Web analytics becoming a part of the online strategy of the firm. NetGenesis, Accrue, Omniture, WebSideStory, Index Tools and plethora of other firms fought to share piece of this still evolving market.
Web Analytics: an Essential part of Online Marketing Strategy

No strategic move is complete without a comprehensive measurement and analysis of its outcome. Most of the advertising campaigns that a company undertakes and the aftereffects of the campaign normally have a vague correlation, which make it difficult to establish a clear picture about its success.

Internet, with the use of web Analytics, provides a way to beat conventional marketing tactics in this respect. The use of web analytics will provide:
• An indication of traffic trends
• Better understanding of target audience (the online audience)
• A means of comparison and analysis of online marketing campaigns
• The data to calculate return on investment of web site and marketing campaigns

Current Scenario
While there are lot of free tools available, one of them has clearly created a flutter in the Web Analytics space, i.e.” “Google Analytics”. While other tools provide minimal functionalities in their free version, Google Analytics provides state of the art functionalities and a very friendly user interface. The software in itself is very much complete and equivalent to proprietary software. What’s more, it is evolving and providing new features at a rate no one else is doing in the field.

A survey by Web Analytics Association revealed that 77% of respondents’ organization’s primary tool for web analytics is one they’ve licensed, from a vendor like Omniture, WebSideStory, WebTrends, Coremetrics, ClickTracks, etc. Around 22% of the respondents use free tools and we believe this population to be primarily using Google Analytics application.

Will Web Analytics change Online Marketing forever?
“Very much”, this was the change that online marketing was looking for and it makes online marketing much more effective and impactful. Once combined successfully with Search Engine Optimization and Search Engine Marketing, Web Analytics has the potential to provide customized and personalized solutions to marketing.
“Isn’t this something that every marketer is looking for???”


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