You may be spending plenty on a Web analytics solution, but are you really using it to its fullest potential? How about up to half of its potential? Is the ROI on your Web analytics software greater than the monthly or yearly fees you pay for it? If you are like most companies, the answer to all three of those questions is an unfortunate and resounding, "no!"
New research sponsored by the Web Analytics Association shakes the foundation of Web analytics mindsets. Among the most surprising findings, 69 percent of analytics users and practitioners don't believe that the majority of those who come in contact with Web analytics data understand its significance. Another 13 percent weren't sure. What's more, 47 percent of the 856 Web analytics users and consultants surveyed said the software is "somewhat difficult" and another 9 percent said it was "extremely difficult" to use.
The study was conducted by consulting firm Web Analytics Demystified and is co-authored by Eric T. Peterson and Zori Bayriamova. Peterson has worked in the past as an analyst for Jupiter Research and is also a former vice president of Visual Sciences, the company that now owns and runs the popular WebSideStory analytics service. Bayriamova is currently a research manager for Time magazine's Consumer Research and Insights team and has also served as an analyst for Jupiter Research in the past.
Their research draws conclusions that other industry analysts deem valid, though perhaps controversial. "If I told you that most people who have experience with Web analytics in your organization don't think many others understand the data and that they think Web analytics is difficult to understand, controversy would arise," Peterson said. "But that's just what we've found."
"The question," he added, "is what to do about it."
Different Maturity Levels
Web analytics is not a new technology, and yet it is still not fully understood. Google Analytics and Microsoft's Gatineau Project are raising awareness of the tools, but analysts agree that solid processes are not in place to allow corporations to reap the full benefits from the data they collect.
Part of the issue is that Web analytics practitioners and consultants have varied levels of experience interpreting the data, according to John Lovett, an analyst at the Aberdeen Group.
"There are different levels of maturity among analytics users or practitioners," Lovett explained. "Some people are using Google Analytics, which is a fantastic tool, and may be looking at the top level -- incoming traffic, what visitors are doing." But using these tools on a limited basis, they may be just "scratching the surface" in terms of culling real business intelligence from their Web traffic.
Megan Burns, a Web analytics analyst at Forrester Research, agreed. She sees varying levels of sophistication within organizations. Some, she explained, are still confused about the difference between visits and visitors. Others understand the fundamentals, but may not understand some of the potential caveats, biases or implications of the data.
"There is an education process that needs to happen here," Burns said. "We need to continue to educate those who are consumers of Web analytics data so they can understand the possibilities and make appropriate decisions that drive ROI."
Scratching the surface, though, isn't going to drive a full return on the investment. When it comes to financial data or some other type of sales data, organizations are dependent on understanding it, Peterson noted. Enterprises that do business on the Web need to take a similar view of the importance of Web analytics because the online channel should always be doing its part to help increase sales and profitability.
An Analytics Paradigm Shift
As e-business and the Web mature, the practice of Web analytics is maturing as well, and we are seeing a new movement now toward a more process-driven approach. In fact, Peterson has been preaching the benefits of process-driven analytics for some years, and Lovett and Burns are in full agreement with the philosophy.
"The next level is establishing business processes so you can use analytics to measure results," said Aberdeen's Lovett. "That is the best way for companies to leverage the analytics platform."
Web analytics is so complex, Burns added, and there is so much analysis that organizations could do. Day-to-day reports need to be institutionalized, she explained, by putting in systems and processes that function smoothly.
"With a process-driven approach, your Web analytics analysts have the time to do higher level activities, advanced analysis, support multivariate testing, and other activities that deliver additional incremental value to an organization," Burns said.
Understanding the Process
For all the industry voices shouting "process," Peterson's study discovered a surprising lack of process and a resultant negative impact. Half of the process-oriented companies that Peterson has interviewed report a ROI from their Web analytics activities. About half, by contrast, aren't even measuring the ROI.
But what do all these Web analytics gurus mean by "process"? Process, in this case, refers to the procedures you follow to analyze your Web site traffic and then implement the business intelligence gained from your analysis.
"Process is essentially Web analytics for dummies," Peterson said. "You can't just turn on the application and expect it to yield millions of dollars. You can't just hire a person and expect him to yield millions of dollars -- unless the organization is ready and willing to figure out how to use the analytics tools to their fullest potential."
Companies are beginning to wake up to this process-driven approach, Peterson said. At the end of the day, getting ROI from Web analytics isn't as much about the size of the company and its resources as it is about attention to the process, the "how-to." With 56 percent of those surveyed citing difficulty using Web analytics, it points to the need for more understanding of the process and how to apply it -- and attracting the talent that can turn the process into real returns on the Web analytics investment.
"If you don't have a concrete problem you are trying to solve, if you don't know what you are doing and why you are doing it, then Web analytics tools really aren't easy or fun to use," Peterson concluded. Without a goal or an objective, all those numbers will be viewed as just a bunch of data, instead of the goldmine of sales potential and business intelligence they could actually represent.