The Future of Web Analytics

In a recent blog posting, our own Paul Legutko tackled what I think is one of the thorniest questions in web analytics: to what extent will web analytics continue to exist as a separate discipline and to what degree will it be absorbed into broader disciplines around BI, business strategy and general marketing. This isn’t just an issue for web analytics consultancies like Semphonic – it has implications for any company building up web analytics resources.

Paul points out that business success and online analysis have already become entwined in ways that make it frequently essential to go outside the web analytics box to produce meaningful analysis. And we can all see that the major vendors have been focusing as much or more on building out the web analytics “ecosystem” than on enhancing core web analytics capabilities.

In the end, Paul mixes equal parts “is” and “ought” to suggest that web analysts need to understand and respect their boundaries if they want to keep them:

“Web Analytics can continue to be its own discipline and field of expertise as long as the online channel remains at the core of the consulting engagement.  A Web Analyst can be happy to analyze call-center data, but only in the context of call-center savings because the same visitors use the website instead of the telephone.  Offline conversions are interesting in so far as the same people can be identified as also visiting the website, or were sourced online originally.  By not keeping the online channel as the focus of analysis or consulting, Web Analysts run the risk of losing their identity.  In my view, Web Analytics consulting has a future as long as it remains true to its core: the online presence of a company and how it contributes to business success.”

At its core, I take this as sound advice. If you – a web analyst – are trying to take-over the analysis of call-center operations or TV buys, there’s a pretty good chance you won’t end up analyzing anything. First you’ll lose the battle around call-center and then you’ll lose the war around analytics.

But I also believe there is a second, largely unanswered question, here. Namely, should an organization WANT a separate web analytics function and is there always going to be a reason for such a function to exist or is the current situation merely an artifact of history and tools?

It's not an easy question to answer.

First, I don’t believe there is any strong consensus around what exactly web analytics is. I see two fairly distinct flavors of web analytics. One variety is marketing optimization focused on multivariate testing, behavioral real-time targeting, and campaign optimization in Search or Banner or eMail. The other flavor – which I tend to call classical web analytics – is focused on the actual visitor behavior within the web site. Classic web analytics tends to address problems around web site use, navigation, purpose and function. Like most full-service consultancies, Semphonic plays on both sides of this divide. But I’d say we are somewhat more focused on classical web analytics (except for our Search Analytics practice) – while I’d classify some of our competitors as clearly more focused on marketing optimization.

Both sub-disciplines have legitimate historical and technical reasons for being distinct. Marketing optimization has been distinct from broader marketing consultants for a variety of reasons. Few traditional marketing practitioners have a clue about new media. The differences in channel understanding limited cross-over. In addition, markets like PPC are quite different from any other media buying channel – and the skill sets they demand are not identical to one’s already in place at traditional media marketing consultancies. SEO and multivariate testing both demand significantly different types of knowledge and expertise than traditional marketing. Indeed, SEO is really a technical discipline – not a marketing discipline at all. And behavioral targeting tends to be a technical problem almost in the domain of IT.

Some, but not all of these barriers will evaporate. Channel understanding will inevitably grow. Multivariate testing may well become a subset of web design. eMail and Banner advertising are already quite akin to traditional direct responsetargeting and media buying. PPC has some inherently distinct elements as does behavioral targeting. And I’d like to believe that in some more rational search engine future SEO may go away entirely.

Add it up, and I’d expect significant consolidation of online marketing optimization into the broader marketing optimization world. With online growing so much, it isn’t clear who will own who, but I’d expect the majority of consultancies to be multi-channel and I’d expect online marketing optimization to be a part of the same internal business function.

What about classical web analytics? Here, the potential merger is with traditional BI tools and corporate measurement/reporting groups. Once again, I think there are legitimate technical and historical reasons for the current silos. BI tools simply could not handle web data. And BI practitioners have tended to be very tool symbiotic and to work on a fundamentally different sort of problem than classical web analytics presents. The limited channel understanding that was once a severe limitation in existing BI practitioners is mostly gone. EVERYBODY sort of understands web sites (not true of SEO or PPC).

On the tool front, web analytics tools have become significantly more like traditional BI tools. They’ve added capabilities that bring them into something not-quite-like-but-nearer parity and also make them more congenial to traditional analysts (though there is still a ways to go here).

But here’s the thing - traditional BI was really never a generic analysis function when it existed as an analysis function at all. Many, many companies were never very good at traditional BI. They’ve deployed it, but it was just another set of under-used reporting systems. And where it did tend to be effective, it was mainly because it was used by subject-matter experts in highly-specific disciplines.

In other words, the traditional BI specialist was either a reporting/tool specialist or a true subject-matter expert (like a direct-response analyst, an insurance analyst or a financial analyst). What’s the equivalent in the online world? I suppose a web analyst. The only real difference is that in the online world the subject-matter expert has to be both a tool and a subject-matter expert.

I expect this to end. As tools become better, there will be a stronger split between tool-focused facilitators and true analysts. And the analysts will be subject matter experts in web sites. Just as they are now in direct mail, insurance or finance. On this view, classical web analytics won’t go away. It will become a true subject matter expertise within a larger framework of BI. As such, I’d expect it to be handled differently depending on the organization.

Go to a direct mail company and you’ll find a specialized, highly important group of experts dedicated to list targeting and optimization. Go to a traditional bricks-and-mortar and you’ll find a person doing the same thing as part of a larger BI department. In another kind of company you’ll find a group of highly expert analysts who do nothing but study actuarial data. And in a pure online play, I’d expect to find the same thing – a team devoted exclusively and importantly to classical web analytics.

So in the end, I expect that the answer for classical web analytics is similar to that for online marketing optimization. There will be significant merger. In some organizations where online is highly important, it will look like web analytics has won. In others, where the internet channel is secondary, it will look like a small offshoot of BI. And in other places it will look like a big but hardly dominant piece of the puzzle.

However this plays out, though, I go back to Paul’s advice. To be of a real value, a web analyst has to bring something special and distinct to the table. That means we have to have real subject matter expertise. As the online world becomes ever more entwined, it behooves us to understand how web data and call-center interact. How TV and online play together. How Business Objects or SAS can be used. But I think it will always be in our interest – as web analysts – to understand that our subject – ultimately - is the web site.

Comments

[Jacques Warren]

Hi Gary,

Truly a great contribution here. You have summarized superbly the whole question.

As for me, I have always felt that the reason why I was an excellent web analyst was because I was an awesome web marketer. Been at it for 12 years.

Personaly, I much more prefer to act as a subject-matter expert than a tool one, although I have, obviously, to cumulate both to make a living. The day when I will be able to solely focus on the subject-matter side of Web Analytics/Marketing optimization, while working with a tool specialist, will be a very intersting one indeed. I can only imagine how sophisticated we'll get then.

[Chris Grant]

Gary, one of the things I like about your writing is that you stress distinctions. I'm convinced that if I can see distinctions, I can understand complexity better, and web analytics IS complex.

From this posting:
- marketing optimization analytics and what you're calling classic analytics are different
- technical and historical reasons are different
- SEO and behavioral targeting are technical, not marketing, disciplines (I'd have said, instead, that there are two aspects to behavioral targeting - the technical and the marketing ones)
- classic BI and classic web analytics tools & methods are different
- reporting-tool specialists and subject matter specialists

If we continue to tease these apart when appropriate, we'll do less of the kind of useless arm-waving that results from thinking the same dynamics apply to disparate things.