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.”