More than one third of the Web analytics market will be upgrading, replacing or deploying systems in the next 12 months, which will create new opportunities for application vendors, according to a report released Tuesday by Jupiter Research.
The survey of executives found that 12 percent of respondents said they plan to upgrade or replace their Web analytics applications in the next 12 months, while 22 percent said they planned to deploy new systems.
Much of the opportunity to sell new systems rests with small- and medium-sized businesses, noted David Daniels, lead analyst for the Jupiter report.
“The largest Web sites have an appropriate tool deployed and are now really about optimizing that investment, whereas the small- and medium-sized businesses — about 35 percent of them — plan to deploy a solution within the next 12 months,” he told CRM Buyer. “We see that as a sizable opportunity.”
The lion’s share of that opportunity will be scooped up by less than a dozen firms, according to Jupiter.
“Consolidation has occurred in the last two years,” Daniels said. “We’re down to a critical mass of players. You’ve got four companies focused on larger implementations and deeper data exploration. Then you’ve got four vendors that are focused on the simplicity and the cost effectiveness of the tools.
“We’re not necessarily anticipating any massive further market consolidation in the near future,” he added.
Integration and Evolution
As the firms jostle each other for market share, integration appears to be becoming an issue of increasing importance to them, Daniels maintained.
“They’re trying to set themselves apart in terms of integrating with other applications,” he observed. “In some cases, they’re trying to become the system of record for customer data. Others are giving up the battle there and realizing it’s just as easy to push the data to another application because they’re not going to replace a company’s CRM or marketing automation suite.”
Web analytics as an application category is evolving beyond data collection and reporting, argued Jason Palmer, vice president for products at WebTrends.
“Web analytics is evolving into a broader category of marketing automation and optimization,” he told CRM Buyer.
“Traditionally, Web analytics has been about performance management, tracking Web site behavior and usage,” he continued. “Four or five years ago, it began evolving into campaign reporting and most recently, campaign management and optimization.”
“Many Web analytics companies started collecting data about Web site visits and providing reporting tools to analyze that data,” Megan Burns, Forrester Research senior analyst told CRM Buyer. “Now they’re moving to the next level of value, which is enabling people to act on that data and becoming a platform for managing interactive marketing activities.”
Out of the IT Silo
Web analytics have jumped out of the IT silo, contends Brett Crosby, a senior manager at Google Analytics.
“The term Web analytics is broadening,” he told CRM Buyer. “There was a time when it was much more of a technical service. You’d sell the product to IT people. Now it’s much more of a marketing product that’s designed to help marketers understand what’s going on with their site.”
In fact, some Web analytics firms are so enamored with the marketing angle of their business that they don’t even want to be called Web analytics firms anymore.
“We think of ourselves more as an online marketing and merchandising company than a Web analytics company,” Joe Davis, president and CEO of Coremetrics, told CRM Buyer.
“From the beginning,” he said, “our business has been about how do you attract, how do you retain, how do you get repeat customers? We’re built around a methodology for converting a browser to a visitor, a visitor to a shopper, a shopper to a buyer and a buyer to a repeat buyer.”
Detail in Big Picture
Not everyone, however, is buying into the broad, new definition of Web analytics.
“I’ve done Web analytics for 10 years,” Eric Peterson, vice president for strategic services for WebSideStory, told CRM Buyer. “All I’ve done is help people solve problems with Web data, to understand where marketing campaigns have been effective, to understand where site optimization and navigation has been effective. I don’t know if Web analytics needs to become something bigger.”
“Web analytics is a subset of customer intelligence,” added Pelin Wood, WebSideStory senior vice president for marketing.
“Web analytics is optimizing your Web site,” she told CRM Buyer. “The Web is only one of the ways your customers interact with your business. Even with an e-business, there are non-Web ways that customers interact with the business.”
Because the Jupiter report focused on very large businesses, its findings may be irrelevant to many smaller enterprises, claimed Michael Stebbins, vice president for marketing for ClickTracks Analytics.
“If your needs are the same as the top 50 companies in America, this report is for you,” he added. “If your needs are like those of the nine million other businesses in America, then you may want to consider some of your costs of implementation and use.”