Appraising Your Investment in Enterprise Web Analytics

Monday, October 05, 2009 | 11:54 AM

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Earlier this year, we asked Forrester Research to help us understand the key trends in enterprise web analytics. The commissioned study conducted by Forrester, "Appraising Your Investment in Enterprise Web Analytics" provides rich insights into what large companies want from an enterprise solution and how they are thinking about their web analytics decisions.

First, let's provide some context for what was considered an "enterprise." The study looked at companies with at least $500 million in annual revenue. Of the 198 companies that met this criteria, almost half (45%) have annual revenues in excess of $5 billion. Three quarters of the companies have over 5,000 employees.

One of the study's findings that we find interesting is around the role of people and web analytics technology. As companies re-evaluate their investments in web analytics, the study explains that:

"Enterprise companies must ask themselves if they are paying too much for capabilities that they simply do not need. In some cases, gaining fewer seldom-used capabilities is a worthwhile tradeoff if funds can be reallocated to hire more resources necessary for analysis."
Companies are recognizing that analysts drive insights, not the analytics tool itself. According to the study, "sixty percent of decision-makers agree that investments in web analytics people are more valuable than investments in web analytics technology." This is in-line with Avinash Kaushik's 10/90 rule for web analytics success: invest 10% of your analytics budget on the actual technology and 90% of your budget in the people who deliver actionable insight, whether in-house analysts, agencies, or vendor partners. It's the people that matter.

Below are other key findings from the Forrester report's Executive Summary:

• Free web analytics takes residence within the enterprise. A staggering 53% of enterprises surveyed currently use a free technology solution as their primary web analytics tool, and 71% use free tools in some capacity. This places use of fee-based solutions in the minority, with only 33% of survey respondents paying for web analytics technologies (12% use homegrown solutions, and 2% use some other option). In addition, it dispels the belief that free solutions are only being used in small organizations or somehow diminished in their capacity to provide value to the enterprise.

• The merits of free analytics products are compelling. Among respondents currently paying for their primary web analytics tools, 66% would consider displacing them with a free alternative. While the primary driver for this consideration is cost, 60% of enterprises are more likely to consider a free tool now because of recent improvements in free solutions. Additionally, 52% are enticed by free tools because they allow enterprises to invest more in the people necessary to drive insight rather than the technology used to collect and analyze data.

• Balancing costs and benefits requires introspection. We found that 52% of practitioners employing both free and fee-based solutions fail to effectively use more than half of the capabilities offered by their tools. This realization is cause for a needs assessment to determine if fee-based web analytics technologies are justified or simply excessive. For many, spending on web analytics technologies could be better allocated toward program development and acquisition of expertise.

• Reliability and ease of use are characteristics that enterprises crave. For 71% of enterprises surveyed, web analytics data plays a significant role in driving decisions. So it comes as no surprise that users place a premium on data assurance, with 45% citing reliable data collection as the most important vendor selection criteria. This was followed by 40% who listed an easy-to-use interface and product pricing as the second equally most important vendor selection consideration.

• Organizations are approaching a point of inflection. Nearly two-thirds of enterprises would abandon their current web analytics provider given the right circumstances. While 74% of large enterprises agreed that web analytics is a technology that they cannot do without, many indicated that alternative tools would suffice. These metrics indicate that organizations are receptive to change and justifiably seek solutions best suited to meet their needs.

If you'd like to learn more, download the full report. We'd love to hear your thoughts. Post a comment and tell us what you think!