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by Kevin Mackin

on Nov 24

Australian Business Community versus Free Web Analytics

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There was a gasp from the gallery! The result was not at all what the industry pundits had expected. In the case of the Australian Business Community versus Free Web Analytics, the jury had weighed up the pros and cons, considered the evidence and made their surprising decision: Free Web Analytics was guilty as charged of the crime of grossly overstating the benefit of its services and leading Australian businesses astray.


In his judgement, the Chief Justice of the High Online Court explained that the common perception that Google Analytics was the most widely used measuring vehicle for online performance for web sites in Australia simply did not stand up to a scrutiny of the facts. “This miscarriage of justice is a travesty and should be exposed for all to see. Sure, many companies use Google Analytics, and why shouldn’t they?” he said.  “After all, it is presented as a ‘free’ service, but the fact is that the majority of leading web sites in this country actually use paid analytics services. Businesses need to know this otherwise they are basing major decisions on incorrect assumptions.”


In presenting the case for the Australian Business Community, we reviewed a group of websites crowned as ‘leaders’ by two of our nation’s most recent studies: The Amber Awards, The Australian Interactive Media Industry Association Awards, and the HitWise Online Performance Awards presented on 24 March 2009.  Of all the Amber Award winners, more than 2/3 (66%) use a paid analytics service, while the Hitwise Awards showed that more than 50% of the winners using a paid analytics service.


Not surprising is that many of these leading web sites also use Google Analytics, as well as a paid analytics service. Furthermore, the most commonly used paid analytics services were the top recognised international vendors (in alphabetical order) Coremetrics, Omniture and WebTrends.



A closer look at the award winning web sites revealed a trend that, in general, the more creative sites and those primarily outsourced to web development and advertising companies had a higher tendency to use the free services, while the websites that were maintained in-house were overseen by tightly managed and dedicated web marketing teams.
 


This leads us to two questions:


  1. Why are the top sites paying for web analytics?

  2. Who is perpetuating the myth that Google Analytics is all a good business needs?
 


Companies pay for web analytics for a myriad of reasons but the most commonly heard include:


  • The depth of reporting from free tools does not match the more advanced paid services
  • The ownership of the data is important – larger and more successful organisations tend to place a real value on owning the information about their marketing channels

  • The need for information reliability and security, which generally comes from a formal Service Level Agreement, can only be provided by a paid service

  • Technical support and training from the vendor is important

  • Free software does not equal $0 total cost of ownership, and

  • Analytics can be complex and many leading companies are looking for a business partnership, not just a vendor.



So, who benefits from promoting the simplicity of a ‘free’ service?   The vendors like Google provide analytics as a tool to help promote the expansion of their primary product (because a common outcome is that you buy more Adwords), as do Yahoo!, who also have a ‘free’ service to help promote their online services. In addition to these guys, the main promoters of the free services seem to be advertising agencies and web developers. For many agencies it an easy way to create the impression that they’re measuring the results of campaigns and can also be part of their revenue stream. For web developers, many of whom know no better, it is a quick solution for their customer needs.
 


What to learn from this landmark case? The primary takeaway is that most of the major and more successful websites in Australia use paid analytics tools to drive programs of continuous improvement through their online marketing programs.   Free tools are a good place to start but the really successful players value their results and invest in solutions to measure their growth and drive change. 
 


“This is my personal blog.  The views expressed here are my own and do not represent those of my employer, Coremetrics.”

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9 Comments

SHG
  • Wrote on 24 Nov, at 12:33PM
Allow me to summarise:

"Some companies spend money on things so those things must be better or they wouldn't spend money on them."
SJC
  • Wrote on 25 Nov, at 10:12AM
I agree with 'SHG', this is a fairly weak argument (seemingly) against free analytics software.

This is another instance of faulty inductive logic: "The best sites use paid analytics, so to be the best I have to use paid analytics, too". You fail to explain the (non-tangible) relationship between success and the use of paid analytics software - instead, it is weakly implied.

I think the key point you fail to address is how many businesses actually utilise paid tools to their full capabilities.

Any analyst worth his salt knows that it's the money/time you spend on analysing data that matters, not how expensive the tools are.

"landmark case" - hardly.
kmackin
  • Wrote on 27 Nov, at 12:39PM
Interesting for sure....

I think a more correct summary would be: "Successful online companies tend to use a paid analytics service".

If someone reading this concludes that there might be value for them to at least consider a paid analytics solution rather than simply opting for something that is perceived to be "free", then I reckon that is a good thing.

The secondary question raised by SJC (thanks - good point) is whether there is more value from using a less powerful (vis, "free") analytics tool combined with a more powerful analyst than from using a more powerful analytics tool. The answer is, of course self evident, that the best case (and what the leading companies are doing more and more) is to use smart marketing people to analyse deep information using a comprehensive analytics tools to drive the best results.

The best analyst in the world can only work with the information available - if the information is not available, not complete or wrong, then the resultant outcome will of course be invalid. For example, if you only track marketing campaigns using a last-click attribution model (due to a limitation of the analytics tool you are using) then your investment decisions in new marketing campaigns will not be as solid as someone who is using a multi-touch attribution model.

So the question becomes one of value - is the additional depth of information and marketing capability worth the investment in a more complete analytics toolkit? For some companies, notably those that are winning awards in the online space, the answer seems to be a "yes".

Kevin
thelostagency
  • Wrote on 27 Nov, at 03:03PM
Im sorry but im going to have to support the case for free web analytics, the prices for paid analytics solutions combined with costs associated with training, consulting, ongoing training and support agreements can sink a project.

Agree on the points that any company should be using a combination of solutions, if the client requests Google or Yahoo analytics they have likely already made their decision based on prior experience with the bloated paid solutions or their budget doesn't allow for another ongoing layer of costs.

If you setup Google or Yahoo analytics right the first time, there is no reason that you much ongoing support. If I recall from a previous study I did around 1/3 of business don't have any solution and still depend on web hosting logs for their business analysis. I support business to utilise any web analytics product as long as they get something in place.
Simon
  • Wrote on 27 Nov, at 03:49PM
Advertorial much?

"For web developers, many of whom know no better"

Another rather rash assumption. If they know, no better - whose fault is that? Perhaps Coremetrics for failing to sell, market and explain their product to the people who could promote it on for them.
alex
  • Wrote on 27 Nov, at 05:00PM
Hey Kevin,

I'm going to have to side with the masses and with free analytics and say that in my experience I have noticed two things in relation to analytics: 1. 95% of businesses have little to poor analytics installed on their websites - this includes big 4 banks and others. 2. the biggest proponents of paid analytics are largely self interested (rather than business interested) parties. When they leave said business, they generally take the knowledge with them and leave a(n expensive) mess behind.

Before you pay a cent for analytics, try installing Google and Yahoo! (yes Yahoo! have a free analytics product too). Once free packages stretch the requirements of the business, then consider paid services. If you can't prove your free service is stretched, question the motives of the paid service promoter.

aa
kmackin
  • Wrote on 30 Nov, at 10:57AM
Gang

Just wanted to (re)make the point that the majority of the large and successful companies in Australia in fact use paid analytics - given that many rush to use the so called "free" services, it surprised me that many did not understand the true situation. Perhaps there is something in this which might lead someone considering their online marketing strategy to look a bit closer at the paid options and make an informed decision.

Interesting to note that ANZ, NAB, Comm Bank, Westpac, Telstra, Qantas, Optus and BHP all use paid analytics services - surely we are not suggesting that these guys have all got it wrong and are simply wasting their money?

Kevin
Joseph John
  • Wrote on 1 Dec, at 10:58PM
Successful online companies tend to use a paid analytics service". There is something that cause the so called companies to use the paid services although they can use the free services.
Nathan
  • Wrote on 1 Dec, at 11:01PM
There is no surprise to see the companies like ANZ, NAB, Comm Bank, Westpac, Telstra, Qantas, Optus and BHP which use paid services, What they look for is the flexibility and the time which can be their priority. I do agree with John.

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