Web Analytics 4, 5 and 6.0?
Don’t you just hate that headline? 
I know I do, but no doubt in 10 years people will be talking about 4, 5 and 6.0 like we talk about 1, 2 and 3.0 now. What I’m talking about is how is web analytics going to evolve. I’d like to draw your attention to this post on Eric Petersons blog. In it an interesting discussion has been taking place which was started by Ian Thomas of Microsoft. In it Ian basically made a couple of bold predictions.
There will be no Web Analytics vendors, but Web Analytics will be everywhere.
and
In five years, all Web Analytics software will be free
Interesting speculation. Ian basically is saying that web analytics will cease to exist in it’s current form and be part of something bigger, something that many of us agree with, Jim Sterne said 2 years ago that in 5 years web analytics will no longer exist forming part of BI or CRM or moving into a marketing competence while the tools themselves become part of a bigger offering.
The free part I frankly disagree about unless Microsoft and Google (the only companies that can currently sustain the usage of the tools for free through the advertising models) actually make analytics systems which are extremely robust – think Visual Site from Omniture (formerly Visual Sciences).
In a panel I was sitting on (I’m the ugly one on the far right) in London Search engine strategies the same discussion came up. It was reported that we all thought that paid vendors had a tough future. That is something I would like to put straight here;
I do NOT think that 3rd party vendors are about to walk the plank. I think they have a great deal of potential.
I agreed with the panel that free tools supported by an advertising model would dominate because free considerably reduces the cost of the tool – you understand that you will always have a cost associated with web analytics because you need good staff to interpret the results. But there is still a massive part for the Omnitures’ and IndexTools’ of the world to play.
However the real point is how could this all happen? Why are bright folks like Ian Thomas making predictions like this? You have to look at who he is working for. Microsoft and Google currently make far more money via advertsing than anyone will ever see, web analytics revenue to them is small fry. Microsoft and Google also know a lot about the way the technology is advancing. Nick Carr wrote a book called The Big Switch which has some very interesting ideas in it about how the Internet might evolve. Nick and Greg Jarboe talk about it here.
Nick argues that just like electricity 100 years ago when companies moved from in house electricity generation to using a network that the same could happen with computing. Companies like Google and Microsoft are currently spending billions on super computing capabilities and it’s feasible that one day these super computers could run all of our software and take away all of our hardware costs. The idea being that one day you simply turn on the supercomputer from whatever access point you like (laptop, mobile phone, even neural interface) and basically can do everything you can do at the office.
This massive shift is not so far from the way it works now. When you open a Google analytics account or buy the Omniture service you are essentially logging into an ASP which is the first step towards this. This gets me back to the original point of this post. I think that we will see BI and larger integration firms (Accenture) moving toward this model. I said in Eric’s post that data integration is the hardest part of web analytics today (at least once you’ve got the basic analytics skills down) and I stand by that.
Imagine if we could simply login to a system that could combine all our marketing data – regardless of it’s source. Doing this in house is incredibly hard and very expensive. Right now you have a number of systems which require considerable IT support and considerable investment in hardware and software – and combining marketing data from one source to another is usually a manual process. If this was a utility you could pay a much smaller fee for all would you pay for it? Of course you would, and this is where I think that Web Analytics 4, 5 and 6.0 might be heading.
To me a lot of the predictions people are making about where web analytics will go is based on what companies in and around the space are doing and that’s fine. But I think it’s the world at large which will shape the future of web analytics not the small group of companies currently competing in a largely unknown space. I say unknown because I know that most businesses are still not aware of web analytic tools today.
I ran a quick benchmark at BlogPulse.com around three terms being discussed all over the world on blogs today over the last couple of months.
To me the fact that twice as many posts in the blogosphere talk about customer relationships and 4-5 times as many talk about business intelligence shows that the world at large doesn’t know as much about web analytics as it does other competences in marketing. Of course we can’t rely on simply this kind of data but I also know that approximately 5000 companies from 250,000 in Finland use a tool they recognize as a web analytics tool. So I’d say we’re still in the early days of adoption.
This is why companies like Omniture and IndexTools might have a bright future because currently with their ASP knowledge they are ahead of the competition in many markets. Opinions?
Wow! New design!
To be honest I didn’t like the terms “web analytics 2.0″ and “web analytics 3.0″ either.
I’m off to have coffee 2.0 now.
Cheers!