The recent £1.8 billion purchase of Omniture by Adobe has thrust the web analytics sector into the limelight. Along with this, research from the Aberdeen Group* shows that companies investing in web analytics can increase online conversion rates from 2% to 7%. So with such great potential to increase sales why aren’t more companies rushing out to buy their web analytics software?

In the UK only a quarter of company respondents (25%) to Econsultancy’s online Measurement and Strategy Report 2008 said that their web analytics “definitely” provided actionable insights, with a further 56% saying that this is only sometimes the case.**

On a more positive note, internationally 91% of marketers believe that web analytics is either 'essential' or 'important' for gathering intelligence for improving engagement with customers - a higher percentage than for usability testing, customer feedback and insights from customer-facing staff.**

So with such mixed messages what is the real potential for companies investing in web analytics and what should they be looking for when researching the various options?

Free web analytics

Many are happy with the likes of Google Analytics which provides a free web analytics service that most companies feel is sufficient. However the Aberdeen Group research shows that to be really effective companies need to look at a lot more than just the click-through data provided by a free service. Buck Brown from Extra Space Storage in the US comments: “There are free analytics solutions out there that are good at providing click-through data; however, if a company doesn’t associate that information with conversions on the site, it’s useless data.”

Actionable data

It seems there is a definite requirement for a more in-depth service than Google Analytics can provide but the research also highlights that this needs to be coupled with data that is easy to read and interpret in order to make it useful. Simple dash boards and well defined metrics (so that you know what you are measuring and why) will help to provide data that a business can act on, whether that be to increase online conversions, improve customer acquisition or improve marketing effectiveness.

But many of the current web analytics providers leave organisations swimming in vast amounts of customer data that they don’t know how what to do with. UK based retail bank HBOS Plc is a classic example:

HBOS case study

According to Jonathan Rookes, Digital Sales Manager for their mortgage and loan division, an existing web analytics solution that HBOS had deployed was, by 2007, no longer supporting the bank’s needs “we couldn’t run the risk of running a solution that had no support from its owner” he comments. In addition, the old solution limited data tracking to 2 million daily impressions, which the bank was regularly exceeding due to its growth and success in the market.

In researching more contemporary solutions, Rookes says that the most important criteria were scaleability and flexibility. HBOS was impressed that the chosen vendor, Site Intelligence, was able to run web analytics queries for two year’s previous history, had virtually unlimited capacity to analyse website behaviour and could link to customer database content. “It was configurable to the way we did business, rather than to how the solution did business as a default,” Rookes explains “we already had a proven methodology for how we prefer to track online campaign activity and returns, and (with Site Intelligence) we no longer had to consider changing our approach to conform to a solution provider’s default methods.”

In addition, HBOS achieved a long sought-after closed loop between marketing activities and real-time return on investment of active campaigns. Rookes continues “For the first time we are able to directly link marketing campaign activity to new and existing customer accounts, whereas previously we could only tie initiatives to applications submitted to the bank. Now we can see customers’ account balances and identify the exact cost to acquire every individual new customer for HBOS. This creates tremendous ROI visibility for us, both in real-time and for the long term.”

Complete customer view

Going forward it appears that leading companies will continue to develop their knowledge and understanding of their customers and prospect using increasingly intelligent analytics. But for those new to the game what are some of the key benefits of using web analytics?

James MacDonald, Marketing Manager at Site Intelligence, comments: “We work with many Multi-channel retailers to provide a full integrated picture of consumer activity. We are finding that more businesses are moving to an integrated view of the customer across all customer touch points - whether accessing information via Webpage, Mobile Device or Social Networking site or whether the front end is driven by Flash, HTML, Java, or for that matter, a point of sale system.

“In addition it is important for our clients to get a more accurate picture including returns, refunds, the effect of stock levels, delivery times and much more. To do this however, the web analytics solution must be totally flexible and also have the ability to provide all the data in a non-aggregated fashion for full integration and ad-hoc analysis.”

Looking forward

With all of this to consider, plus issues of data privacy and security to add to the mix, you can see why businesses may be a little daunted by the web analytics market. But it only takes one look at the potential increase in sales that web analytics can provide to remind even the staunchest technophobe that now is the time to embrace the digital age.