The future of analytics

WebAbacus customers gathered around the Foviance crystal ball to hear our predictions for the industry at our recent customer forum.

Over the last couple of years, we’ve seen a change in how web analytics is used. Previously, the IT team used it as a tool to manage the web server, but now it’s the marketing team who use it to manage the website and ensure the effectiveness of promotions. This shift brings problems of its own. While businesses have been quick to invest in the software, they’ve been slow to develop analysis skills in-house. The techie people don’t own the software any more, and so are less inclined to find solutions to, or simply unaware of the marketing team’s problems. As a result, we’ve seen greater demand for hosted applications, accessed over the web, which outsource the maintenance headache and provide simple reports to answer the most common questions.

In the next year, we expect to see greater polarisation between hosted applications and applications licensed for use on-site. While many will outsource to save money on supporting applications in-house, others will see the business benefits of licensing software and supporting it with fully trained analysis teams. Hosted applications cannot be as easily integrated with other internal data sources, and many businesses will come to consider that essential. Web analytics provides a useful hub for consolidating and presenting data about traffic, surveys, server performance and sales. Survey data will be increasingly integrated with the customer journey through the site, so it can be matched against others taking similar journeys. We also expect to see a shift away from benchmarking and towards measuring trends to ensure continuous improvement. The business case for analytics is strongest when it demonstrates a return on investment from changes made to the site. This requires consistent Key Performance Indictors for benchmarking purposes, but with the addition of iterative and focused analysis.

In the longer term, content providers must work out how to operate in the world of mashups, where customers make their own dashboards from various data sources and might rarely visit the company’s actual website. Businesses will need to provide enticing content that customers wish to subscribe to, and will follow up on. Google’s targeted ads have shown that there is widespread acceptance of advertising that benefits the user. As we’ve discussed in previous newsletters, we also expect to see much more widespread use of rich media such as video and audio, and of Web 2.0 features such as forums. As user activity changes from reading text towards becoming immersed in communities and online TV, and increasingly contributing content, the web analytics industry will need to establish new ways to measure engagement.