It’s About Relationships and Experiences
Event organizer Jim Sterne added an Industry Insights day to this year’s event and invited a small group to bring their biggest and most forward thinking ideas to the table for discussion. I shared my thoughts on the fact that the traditional customer lifecycle: Acquire, Convert and Retain is defunct. I supported this with Jupiter research demonstrating that customers no longer traverse the Web in linear fashion (if they ever did), from consideration to purchase. They’re bombarded by choice, assaulted by advertising and rarely pay attention. Consumers are visiting multiple sites, multiple times prior to purchase and are twice as likely to value the advice and opinions of “friends” over brand driven content. All of these factors contribute to a fragmented online experience, where content is consumed in snack-size pieces and picked up from convenient locations across the web. To quantify this behavior and glean some semblance of understanding from erratic consumers, I proposed a new method for measurement based on Relationships and Experiences. Simply put, by quantifying these two aspects of customer interaction, you can enhance, improve and optimize the digital channel. I’ve built out a framework for quantifying these characteristics, so stay tuned for more on this topic in upcoming research.

All Business is Becoming eBusiness
One topic that surfaced on several occasions was that eBusiness and Web metrics are finally taking a seat at the boardroom table. Organizations are dissolving the silos that sequestered the online channel from the rest of the business and allowing these metrics to permeate throughout the enterprise. This is due largely to the accountability that Web analytics delivers to business metrics. The Web is infinitely measurable and now more than ever we have data to support our marketing assumptions. Although this data represents only 5% of all spending, it’s a start. Although the truly data driven organization is still a distant hope for many, we have reached the point where Web analytics has entered the lexicon of even the largest HiPPOs. At the Insights day, we discussed analytics moving from tactics to strategies and that the importance of metrics is growing throughout most organizations. The conversations about Web analytics are also moving through a maturity cycle. Originally only the CIO was interested, then CMO’s took notice and most recently the CFO is asking the questions. The value of analytics is working its way upstream.

Old Concept, New Yardstick: Attribution
Creating the perfect marketing mix is nothing new, but attribution has emerged as a method for quantifying customer touch points throughout a given campaign to allocate credit across initiatives. Historically, the last click gets all the credit for an online conversion, which is often the branded keyword or direct navigation resulting after much research and previous impressions. Web analytics tools are well suited to quantify the multiple marketing endeavors leading to conversion and use a weighted methodology to give credit where it’s due. Stay tuned for more on this as well since Jupiter will publish on this topic in coming months.

Mindreading Technology?
One of the most remarkable presentations delivered at the summit was an addendum added for Joseph Carrabis, who never got a chance to deliver his slides on Sunday because we assaulted him with questions. Joseph’s recently patented technology can really read your mind. He is a behavioral anthropologist that applied the insights of psychology and sociology to a technology solution. It works by embedding a standard javascript tag onto a page that tracks all mouse movements and clickstream activity throughout a session. The tool can determine gender in a matter of seconds and knows when you’re happy or sad. As unbelievable as this may sound, the accuracy has been proven out at 87% and although appealed originally by the US Patent office, it won their approval last month. The creator is brilliant, but you may need an interpreter to know what he’s talking about. Not because he’s speaking Gaelic (which he’s apt to do), but because his concepts are mind boggling. Although when pressed to explain his technology, he asks simple questions that shed light: Do men and women think the same? No, well he can discern that by the way the mouse moves on the page. Are you excited? Your mouse will react differently than when sad. The technology takes all this in and is able to produce actionable recommendations to enhance the way that visitors experience your web site. By using this technology and its neurological insight, the tool does know what you’re thinking. It’s a bit Orwellian, but likely to pervade Web site technologies everywhere. This topic and the NextStage Evolution technology deserve a full write-up on their own, so stay tuned on this one as well.

In all the event lived up to its reputation as the must attend show for Web analytics. I’ll close with a few notable quotes that I jotted down throughout the four days of the conference. These are snippets and paraphrases that capture great Web analytics insight:

~ If you’re explaining, you’re losing. Bob Page, Yahoo!
~ New roles are emerging: Brand Behavioralists and Dialogue Designers. Ryan Warren, Exact Target
~ The executive is the new customer, so don’t show up with a bus full of ideas; deliver a solution. Anonymous
~ The planets are aligned for Web analytics. Tom Davenport, Competing on Analytics
~ Ever see what happens when you try to push on a rope? Bryan Eisenberg, Future Now
~ Join PALM: People Against Lowly Metrics. Avinash Kaushik, ZQ Insights
~ We’re moving from Web metrics to business metrics. Embrace the “marchitecture” (marketing and architecture). Tim Goudie, Coca-Cola
~ Asking users to predict future behavior just doesn’t work. Jacob Nielson, Nielson Norman Group
Finally the most heard question: See you in the Lobby Bar?

For those of you who recall 1970’s pop culture, one of my favorite Free to Be…You and Me skits involved the voices of Marlo Thomas and Mel Brooks as two bald babies trying to figure out their identities. Well, it didn’t take long for the babies to figure out who they were and apparently “Yahoo! Tools” didn’t spend much time deliberating either. The new alliance will threaten Google Analytics’ substantial market share as the current free tool on the market – AND – challenge commercial analytics offerings from larger vendors such as Omniture, WebTrends and Coremetrics.

I am truly excited to be engulfed in JupiterResearch’s 2008 Web Analytics Constellation report. IndexTools agreed to participate in this year’s review back in February, providing me the opportunity to assess the marketplace of free and commercial analytics tools on a level playing field. The completed study is scheduled to publish this summer and will include an evaluation of the following vendors: Coremetrics, Google Analytics, IndexTools, Lyris HQ ClickTracks, Nedstat, Omniture, Unica, WebTrends and WebAbacus.

This is an exciting time for Web analytics and I welcome your views or questions about the direction of our evolving marketplace. Feel free to write me at jlovett at jupiterresearch dot com.

The financials of the deal were not disclosed, but the bigger question burning up the analytics blogosphere is; What does this acquisition mean to the Web analytics world? First, the IndexTools solution is a robust analytics platform that has been build from the ground up for flexibility and sheer analysis horsepower. Dennis describes the beauty of the tool by stating that it offers less canned analysis, which in turn requires analysts to think more about their data, facilitating discovery. Many argue that IndexTools v9.0 rivals Omniture’s SiteCatalyst at a fraction of the cost. And speculation abounds regarding how Yahoo! will bring this tool to market. My guess is that Y! will devise a “Freemium” solution, where some functionality is offered to small and mid-sized businesses at no cost and incremental services (like the v10.0 Rubix visualization tool) will be available at a premium.

Competition
News of this pending deal will undoubtedly attract the attention of free analytics providers, Google Analytics and Microsoft’s AdCenter. But rather than attempting to undercut their market share by providing yet another free tool for widespread usage, Y!’s Michael Wexler, unofficially states that they’re approaching the market from a different angle. The goal, he describes, is to enable users of Yahoo! products, (development, advertiser, shopping, and end user products) to analyze usage data in a comprehensive way to derive optimal use. He goes on to compliment Google Analytics’ success as a basic tool, but criticizes that it’s not designed for people that “really want to understand their data, nor is it aimed at the variety of ways people can work with Google (it ignores all that API stuff, for example).” Wexler views IndexTools as “the foundational start to understanding not just marketing and its impact on site behavior, but how to understand you online site usage to achieve your goals…”

Ahh, look out Omniture, eh? Despite the indication that Y! is not going after the free market, if this solution is available to any part of the market for free, it will undercut the market share of Google Analytics and MS AdCenter. However, it will not displace the need for enterprise solutions like Omniture, Coremetrics and WebTrends. These companies are building out their marketing optimization platforms, with a key focus on integration. Without buying into the vendor hype about “optimization”, the industry leaders have demonstrated that Web analytics can reside at the center of data analysis for marketing functions. Y! statements from Wexler (although unofficial), make it sound like they may be eyeing the integration component, if only for it’s own services. Other vendors in the marketplace will be forced to keep up in a Web analytics feature arms race or be absorbed and rolled into larger enterprise marketing solutions. But, we’re already seeing this with tools like ClickTracks as integrated solutions within Lyris’ entire marketing suite. And Unica has taken a similar approach by integrating NetInsight analytics with its other enterprise marketing products. The Web analytics industry is evolving, but that does not spell the demise of stand-alone enterprise analytics.

Market Impact
Despite my respect for Eric Peterson, I’m inclined to disagree with his take on the pending acquisition. I do not believe that this will be a “permanent game changer” for Web analytics. Disruptive, yes – but permanently altering no. [For the sake of brevity I’m purposefully ignoring the MS/Yahoo! option.] In the free tool scenario, there’s no historic precedent (with the exception of some general open source examples: e.g., apache, MYSQL, etc) that free tools will displace commercial vendor analytics solutions. If anything, free tools will continue to be utilized concurrently with commercial alternatives for trend verification and specialized uses. Yahoo’s Wexler even confirmed this with his statement about using IndexTools to gain greater perspective on Yahoo! products. There’s nothing to indicate that a Fortune 1000 enterprise would abandon their paid vendor analytics relationship for free tools on the marketplace. If Y! decides not to make the IndexTools solution available for free, then they will certainly make a run at the larger players in the market. But competition is good for all of us and it won’t be anything we haven’t seen before.

I do believe that the availability of free or “Freemium” tools places pressure on existing analytics companies to raise the bar on functionality, usability and actionability of their data. While the free tools will help to spread the ubiquity of analytics data, the ability to correlate, analyze and take action on it will continue to be a driving factor. Here, I agree with Eric that the GAAC (Google's consultant network) will serve to perform this analysis and provides a stellar prospect list for Yahoo! Analytics, but IndexTools already works with over 200 agencies globally to analyze data and take action on it. If anything, the increase of free tools will amplify the opportunity for the prosperous analytics consulting industry and provide plenty of work for all.

In the end, I believe that the impact of this acquisition on the analytics industry will play out as follows:

~ Greater awareness and utilization of web analytics worldwide
~ Higher expectations placed on enterprise players to innovate and deliver
~ Further expansion of ancillary marketing tools as core capabilities offered by existing enterprise analytics vendors

These are exciting times for the Web analytics industry. Lots of changes…lots of controversy…and lots to talk about. My sincere congratulations go out to Dennis and his team at IndexTools, as well as to the beneficiaries at Yahoo!. I believe that this acquisition is a testament to the capabilities of the IndexTools solution and I for one am extremely excited to see how this one plays out.

Here’s the company press release.

Shout from the Rooftops
Coremetrics maintains widespread notoriety among analytics pros, yet there’s a big wide Web out there just entering the shallow end of the analytics pool. Coremetrics should invest in marketing programs to increase awareness and position themselves as the next step in Web analytics solutions.

Take on the Jolly Green Giant
While the green glow of Omniture will be tough to shadow, competition is good for everyone. Omniture has been the Web analytics powerhouse of 2007, but if anyone has the chops to make a run at them – Coremetrics is poised to do so. As a smaller and potentially nimbler organization, Coremetrics has a chance to shine on service, support and [retail] vertical expertise.

Shopping Spree
Well, not really a spree, since $60M ain’t what it used to be, but perhaps an acquisition. Adding multivariate testing capabilities or fortifying their search marketing solutions wouldn’t hurt. Coremetrics has been successful at creating tools for the marketer and should look to acquire technologies that make it increasingly easy to execute on strategic functions without technical intervention. The greatest opportunities may be around optimizing search and ad spending.

Continued Commitment to Development
Glimpses of the Coremetrics’ 2008 roadmap foreshadow significant improvements. Enabling the data to work for their clients by providing greater access and visualization is a priority, but embracing the reality of increased consumer control is a necessity. Social networks, UGC and the voice of the customer are creating a cacophony of insight. Someone needs to figure out how to make sense of it all and convert data into action.

Beta User Testimonials…

"The entire concept of 'late' no longer exists for me. That's pretty cool. Thanks Gmail!" Miriam S., Delivery girl

"I used to be an honest person; but now I don't have to be. It's just so much easier this way. I've gained a lot of productivity by not having to think about doing the 'right' thing." Todd J., Investment Banker

Nice one Google, you had me for a second there...

My previous posts indicate that I am a strong proponent of onsite tracking and the ability to create greater relevance and a stronger user experience for Web site visitors based on clickstream data. The key emphasis here is greater benefits for the end user. These benefits include:

saving time (by remembering information),
increasing relevance (by recognizing the context of the visit) and,
improving the site (by optimizing pages based on aggregated actions).

I believe that Phorm is overstepping it bounds by using infrastructure to capture everything that users do online and selling that information for a profit to anyone who cares to target them. In my mind, the frightening precedent-setting issue is that infrastructure companies will now have the ability to alter the experience for end users. In this way, sites that subscribe to the Phorm technology can use completely unrelated information about my [aggregated] online habits in attempts to sell me [my segment] products or services online. Or worse yet, find out things about me that no single site would ever know and draw conclusions about my personal life.

So what’s the solution? I’ll reiterate what I’ve stated in the past regarding personalization and privacy: consumers must be given a choice. Controls need to be in place to enable consumers to opt out of targeting tactics, stop unwanted solicitations and control the information that sites have about them. Consumer privacy is a delicate issue and we’re living in an age where dubious privacy practices abound. It will only take a single breach of online privacy to send the advocates, bloggers and satirists into a tirade. For now, I’d like to help educate the masses about the benefits and realities of targeting and empower consumers to make their own choices.

So, lawmakers are now playing catch-up to Internet practices that have been in place for years. The unfounded fear is that ‘you know too much about me and will entice me to spend money on your products’. C’mon. In essence, haven’t salesmen and marketers been attempting to do this for the last century? Size up your customer and sell them what you can. The Web allows us to interact with an environment that is infinitely measurable…And now you want to take that away? Privacy concerns considered, I think these legislatures have an uphill battle in front of them. Advertising has always been an intrusive process. Stop people from what they’re doing, get their attention and say something memorable. If tracking enables that in a more relevant manner, I say -- good for advertising. If you don’t like it, ignore the ads (and don't worry…they’re used to it).

Training & Education:
On the day preceding the summit, Omniture held educational sessions for newly acquired Visual Sciences customers by enlightening them on transitioning to SiteCatalyst and Discover. Participating clients that I talked to anticipated a laid back casual approach, but instead encountered a rigorous roll-up-your-sleeves intensive training session. Throughout the three days of the Omniture event, they had pros on hand to answer technical questions and aid in real-time implementation issues. They set up “Hot Labs”, for account managers to work with clients on any topic and by my observation they were well attended.

Coremetrics held its formal Coremetrics University training on the day following its summit and although I didn’t get to inquire about the results of the training sessions, numerous clients were looking forward to a comprehensive experience. Coremetrics also had pros on hand throughout the event to answer technical questions and tackle real-time problem solving. Every exec I spoke with challenged attendees to stump the experts on the floor and if my inquisitions were any indication, they were doing a solid job.

Keynotes & Presentations:
Coremetrics opened with a Wild West skit that depicted “Dusty” cowboys dependent on the digital world. A fitting analogy for the chasm that is the digital divide and a graceful segue to Joe Davis’ keynote on How the Web Was Won – or – at least continues to evolve. Laura Evans, from Resource Interactive, followed with her presentation on the Open Brand and John Squire delivered “Got Marketing?” solutions which included Coremetrics’ 2008 updates on Search, Intelligent Offer, LiveMail and Coremetrics Connect. Day two featured an in depth look at the product roadmap and a glimpse of the new toys within the interface. John Payne’s enthusiasm was unfettered as he demonstrated the new products and feature enhancements. Eric Peterson from Web Analytics Demystified followed by walking attendees through a captivating presentation on measuring visitor engagement, his delivery continues to evolve as Eric delves deeper into the metrics and process. Coremetrics closed with a short-and-sweet message delivered by Joe Davis and a highlight reel of images and video captured throughout the event.

Omniture delivered on their promise of a mix of entertainment and education. Josh James kicked things off by illustrating the new composition of Omniture after its 2007 acquisition rampage. CTO, Brett Error then walked attendees through the SiteCatalyst v14 enhancements and other features on the development front. Peter Kim of Forrester delivered a presentation on Marketing and Day one closed with Lance Armstrong’s emotional story of overcoming cancer, where he encouraged us to believe in a cause and take affirmative action. Day two began with Seth Godin’s highly entertaining presentation, first flattering the crowd by touting them as the smartest marketing minds in the universe, then challenging them to create something remarkable and break the constraints of mediocrity. Omniture closed with Brett’s summary recap, a look ahead and a lively interactive feedback session of how to improve on their solutions. He took copious notes and demonstrated Omnitures’ devotion to customer driven development.

Both companies ran concurrent tracks throughout their client summits making for tough decisions on where to focus. I found the content delivered by each vendor to be compelling, technical and highly educational. I’ll go so far as to say that the topics delivered and ensuing discussions were at a sophistication level beyond most other analytics events I’ve attended.

Breaking News & Product Releases:
Coremetrics came out of the gate with announcement of their new integration platform, Coremetrics Connect. While it’s largely a catch-up move to Genesis and even WebTrends’ Open Exchange, their documentation process and integration guidance is well-considered. John Squire delivered a message of acquisition, conversion and retention and rounded out the product enhancements (i.e., custom report templates, key segments, export builder) around these principles. Expect to see some substantial new offerings in the spring 2008 release enabling analysts to “interrogate the data”.

Omniture’s 2008 product mix equates to 50% Web analytics solutions (comprised of SiteCatalyst, Discover On-Demand & On-Premise and Genesis integrations), 25% is Search Center and the remaining 25% is the new Test & Target combination of Offermatica and Touch Clarity. The SiteCatalyst user interface went through a dramatic redesign from v13.5 with applause-worthy menu improvements, single sign-on, video measurement, intelligent help and Web services APIs. Search Center v3 also debuted with integration capabilities that enable centralized control over multiple keyword bidding and monitoring solutions, scaleability to manage 50 million keywords and automated optimization.

Entertainment:
While this category bears no reflection on the product offerings of each vendor, Omniture was over the top. Lance Armstrong was inspirational, but the rave party with neon green light sticks, fresh sushi and Grammy award winning Flight of the Conchords was truly entertaining. Bret and Jermaine act exactly as they do on the HBO series and showcased their genuine musical abilities. The armadillo racing in Fort Worth Texas never stood a chance. I’ll admit that Billy Bob’s was a place like none other, but line dancing and bull rides do not compare. My bias for skiing over golf favored Omniture who sponsored a day at Snowbird, while Coremetrics golf enthusiasts teed up in Texas. I opted to stay in Utah for an extra day which paid off with over six inches of fresh snow and an epic day of Utah powder.

Summary:
Both vendors succeeded in showing their clients a good time, educating them on the new features and demonstrating forward-looking vision. These companies are driving the Web analytics industry forward. I expect that 2008 will be a banner year for both Coremetrics and Omniture and their rivals in the marketplace have a high bar set before them.

The platform was built on four tenets of closed loop marketing, which include: Extensible data delivery, Core APIs, Flexible reporting and Integration Wizards. Perhaps the most novel concept of the integration partnerships are the clearly defined documentation processes, integration briefs, best practice examples and full disclosure on what the integrations entail. This level of detailed explanation will be available for all technologies included in Coremetrics Connect, making the qualification process stringent, with hopes that this will pay off for ease of integration for clients. There are currently 25 qualified participants in the program, and more on the way. The Integration wizards (available in the Spring 2008 release) will allow marketers to simply select certified technologies from a list within the user interface and walk through the set-up process.

Coremetrics is careful to point out that Connect is not just another partner program, but a process for marketers to acquire behavioral data from adjacent technology applications, analyze the data and make actionable decisions. However, the differentiators between Connect, Genesis and Open Exchange are subtle, and they are not likely to cause clients to jump ship for another web analytics vendor. Yet, there’s quite enough going on within the Web analytics market to cause anxiety among clients. Coremetrics just Cowboy’d up to the Optimization table with their own integrated Digital Marketing solution.