Web Analytics Market Update, 2012
SUMMARY
Four vendors command the bulk of the Web analytics market, but others continue to innovate. This document describes the market's dynamics and profiles the leaders.
Overview
Demand for Web analytics tools continues to expand, even as the number of top-tier global vendors has shrunk to four. This update explains the market dynamics and provides an overview of the leading vendors.
Key Findings
- For large or Web-channel-centric organizations, Adobe, Google, IBM and Webtrends represent the top tier of global vendors to evaluate.
- The Web analytics market has expanded to include additional digital channel optimization products.
- New vendors are emerging with specialized offerings, but they have not yet achieved significant market share.
Recommendations
- Find out the requirements of marketing, content development, Web operations and customer support teams before evaluating analytics vendors.
- Set a budget for tools and customization services that is in line with the strategic nature of the digital channel.
- Consider specialty vendors to address tactical analytical needs, such as gaming, TV applications and location-based services, that leading Web analytics vendors do not adequately address.
- Consider the privacy implications when combining Web analytics data with other data sources.
What You Need to Know
Having a line-of-business-sponsored venture in Web analytics is mandatory for any organization that sees its digital channel as a strategic asset.
The top-tier Web analytics products are the result of evolution and acquisitions, and provide a range of functionality and price sufficient for all but highly specialized requirements.
The biggest challenges for a successful Web analytics endeavor remain to acquire the necessary skills and deliver organizational leadership, rather than chase new Web technologies.
The top-tier Web analytics products are the result of evolution and acquisitions, and provide a range of functionality and price sufficient for all but highly specialized requirements.
The biggest challenges for a successful Web analytics endeavor remain to acquire the necessary skills and deliver organizational leadership, rather than chase new Web technologies.
Analysis
The term "Web analytics" refers to specialized analytic applications used to understand and improve online user experiences, visitor acquisition and actions, and to optimize digital marketing and advertising campaigns.
Web analytics products offer reporting, segmentation, analytical and performance management features, historical data storage, and integration with other data sources and processes. Increasingly, they also provide input to automated tools that personalize customer experiences.
Web analytics products are used by marketing professionals, advertisers, content developers and website operations teams.
The historical approach of using World Wide Web Consortium (W3C) log files to analyze Web clickstream data is no longer supported by most major Web analytics offerings, as the more functional tagging approach is taking its place. The shift from on-premises solutions to a software-as-a-service (SaaS) delivery method triggered this change. Over 99% of deployed solutions are now delivered via SaaS and use tagging.
A "tag," which is written in HTML or JavaScript (client or server side), collects data about user actions, and then streams it to an analytics collection server, where it is processed. Those who prefer to use log file analysis, or who install a tag-based analytics tool on their premises, have a limited selection of vendors to choose from and, in most cases, limited functionality. Demand for strategic on-premises deployments comes from those with unique data security concerns and a need to support intranet sites, especially those where Internet access is not permitted.
Counting tags received by the analytics server — page views or server calls — is the most common pricing method for Web analytics tools. Depending on the vendor, the base price is based on a per-million server call rate. Rates range from $50 to $500 per million server calls, based on yearly volume. Each vendor has a unique combination of add-on charges in their price quotes, such as for users, profiles, data retention, reprocessing fees and consulting.
All the Web analytics solutions reviewed here support modern mobile devices and offer toolkits to put usage capture agents into native mobile applications or on back-end application servers. Most offer a "big data"-style warehouse of captured traffic, from which queries about visitors based on segments and behavioral activity can be made. These types of queries are driving online marketing campaigns, such as targeted email, display advertising and social media. The queries can also be used to extract data, to mash with internal data for cross-channel analysis.
Although the top tier of the market has experienced consolidation, new vendors are competing for business as demand continues to grow. This includes secondary players, looking to revive their business, new players using big-data technology, and specialty vendors focused on Microsoft SharePoint, mobile devices, video content, gaming and advertising markets.
Externally facing Web analytics initiatives within organizations continue to be split into clusters in terms of their scope and maturity.
At the low end, tools are used to get basic metrics about a Website, in order to understand usage, justify budgets and forecast infrastructure capacity needs. The value of the website to the organization may be low or poorly understood. The free Google Analytics Standard product is very popular, although many still process log files with Webtrends on their premises or open-source products like AWStats from SourceForge.
In the middle, organizations have defined metrics that reflect business value and processes to optimize the site. There may be limited skilled resources or problems turning analytic insight into action. Most requirements are met by Google Analytics Standard, although some organizations may need better support, additional features or integration with third-party marketing products.
At the high end, organizations focus on business optimization of their website, and have a properly funded and executive-led initiative. Attributes include:
We expect the market to remain stable through 2012, but long-term trends could shift the market by 2016. In the short term, the momentum of the leaders presents a major barrier to entry for other vendors. However, successful niches will be carved out, based on regional preferences, customized professional services and availability of specialized analytical features. In the long term, required features will be available from advertising agencies, Web content management systems and e-commerce engines. Also, another round of consolidation is likely, as Oracle, SAP and Microsoft have yet to be competitive in this space, despite offering CRM tools. Oracle, for example, recently acquired Art Technology Group (ATG), FatWire Software and RightNow, and has a large CRM customer base, yet has no credible Web analytics story. This is likely to change.
Adobe has about 6,000 Web analytics customers, which generate nearly $500 million in yearly revenue according to its last report.
Adobe's Digital Marketing Suite features the Omniture technology it acquired in 2009. This suite includes over a dozen applications, most of them integrated with Adobe's SiteCatalyst core analytics offering. The latest release of SiteCatalyst (version 15) added real-time segmentation reporting and improved performance.
Included in Adobe's Digital Marketing Suite is a social analytics offering.
Adobe's customers come from a broad range of vertical markets. Many of its customers analyze over 1 billion page views per year.
Adobe has a strong partner program for companies and consultants in the field of digital optimization.
Through its Genesis partner program, it has pre-engineered integration solutions for over 80 companies, over half of them targeted email campaign vendors.
Adobe has integrated its Creative Suite 5.5 with Omniture technology, to make it easier to incorporate optimization and analytic techniques when developing HTML5 and Flash applications.
Adobe has acquired CQ5, a Web content management solution from Day Software, and is working to integrate Omniture's A/B testing, targeting and analytics with it.
Adobe's acquisition of Demdex provides it with an advertising data management platform that is used to store and exchange clickstream, third-party and partner data, and to perform advanced segmentation. It also supplied some of the technology for Adobe's Tag Manager, a tag management product designed to help standardize and simplify JavaScript tagging across Adobe's products.
In addition, Adobe's 2011 acquisition of Auditude provides an advertisement delivery platform for providers of premium video content.
Summary: Adobe has the broadest product line for online optimization. Its vision extends to the embedding of analytics into content management and digital advertising.
Google is the most installed vendor in the Web analytics market, with over 200,000 organizations using its free product, Google Analytics Standard. It is used by website owners around the world, including many that also use other Web analytics products.
Google continues to improve its product through innovation, and has been a driving force in this market, forcing other vendors to play catch-up in terms of ease of use and some advanced analytics features.
However, Google Analytics is limited in its ability to drill down to the visitor level, which lessens its applicability to those who want to drive targeted marketing campaigns from the analytic engine. It also offers limited customer support and has terms of service about indemnity that some corporate lawyers object to.
Google launched a Premium version of Google Analytics in 2011. For a flat fee of $150,000 per year, it provides support and service-level agreements, reduces some of the product's limitations, such as sampling, adds attribution analysis features and changes terms of service. However, its ecosystem of marketing partners is small, especially with regard to integration with email and ad serving vendors. For more details, see "Google Analytics Premium Suitable for Some Enterprise Uses."
Summary: Google provides excellent basic analytics for free, and relevant skills are easy to find.
IBM took a leap into the digital marketing world with its acquisitions of Coremetrics and Unica in 2010. Coremetrics was a pure-play Web analytics firm, while Unica offered Web analytics as part of its integrated marketing suite.
The Unica Web analytics product, NetInsight, will continue to be sold as an on-premises solution, and continue to support processing W3C log files, in addition to tags. IBM is supporting, but no longer selling, the Unica NetInsight SaaS offering, and is taking a phased approach to blend it with the Coremetrics offering. The second phase on 1 November 2011 and integration will continue through 2012.
IBM has many reporting and analysis technologies that could be woven into a marketing optimization solution, such as from its SPSS and Cognos acquisitions, but this is not a major theme in the short term.
The company's hosted product offering is the Coremetrics Digital Marketing Optimization Suite. Coremetrics has about 2,000 customers. Unica NetInsight has less than 1,000 customers.
With Coremetrics, IBM focuses on selling to the retail, financial services, travel and content/media sectors. The Coremetrics suite has add-on applications for tasks such as advertising attribution, targeted email marketing, product recommendations and search marketing. It also has prebuilt integration with IBM's WebSphere Commerce product. It provides a benchmark reporting service across its customer base, for those that opt in to allowing their data to be shared. It also has a social analytics offering. The Coremetrics Connect partner program attracts optimization ecosystem partners, especially in the fields of email and ad serving, to link with its analytics and recommendation applications.
Summary: Beyond the features of Coremetrics, and the on-premises offering of Unica NetInsight, IBM has a broad vision to integrate analytics with cross-channel marketing processes. However, it is still early days for the execution of this vision.
Webtrends, which operates as a private company, is the largest pure-play Web analytics vendor. It has over 3,500 analytics customers, with about 2,700 on-premises and 800 SaaS-based.
Webtrends remains a leading on-premises choice, where it supports both W3C log files and JavaScript tagging. Webtrends has additional products in its suite, such as those to perform A/B-multivariate testing and content targeting. It also offers an integrated module to analyze intranet or customer-facing sites built using Microsoft SharePoint.
Several recent acquisitions have led Webtrends into new markets. The acquisition of Transpond resulted in Webtrends Social, a platform with a series of engagement and content applications that can be used to add functions like polling, quizzes, blogs and image feeds to social media campaigns. The acquisition of Reinvigorate gives Webtrends additional real-time analytics capability and heat map technology, along with a lower-cost analytics tool for the low end of the market. Integration of Reinvigorate technology will occur through 2012.
Webtrends recently launched a revamped version of its analytics product, Analytics 10, which centers on a portal-like concept that it calls "spaces," to integrate measurement of multiple online channels, such as mobile and social, on to a single platform. These emerging channels are the focus of the company's investments and marketing programs.
Summary: Webtrends is pushing the boundaries of visualization and social and mobile analytics in order to enter new markets. But it has yet to take significant market share from its traditional competitors.
Web analytics products offer reporting, segmentation, analytical and performance management features, historical data storage, and integration with other data sources and processes. Increasingly, they also provide input to automated tools that personalize customer experiences.
Web analytics products are used by marketing professionals, advertisers, content developers and website operations teams.
Market Dynamics
The scope of Web analytics solutions is expanding to incorporate additional digital channel optimization features, such as A/B testing, recommendation and targeting engines, surveys, on-site search, search engine advertising bid management, attribution and social media analysis.The historical approach of using World Wide Web Consortium (W3C) log files to analyze Web clickstream data is no longer supported by most major Web analytics offerings, as the more functional tagging approach is taking its place. The shift from on-premises solutions to a software-as-a-service (SaaS) delivery method triggered this change. Over 99% of deployed solutions are now delivered via SaaS and use tagging.
A "tag," which is written in HTML or JavaScript (client or server side), collects data about user actions, and then streams it to an analytics collection server, where it is processed. Those who prefer to use log file analysis, or who install a tag-based analytics tool on their premises, have a limited selection of vendors to choose from and, in most cases, limited functionality. Demand for strategic on-premises deployments comes from those with unique data security concerns and a need to support intranet sites, especially those where Internet access is not permitted.
Counting tags received by the analytics server — page views or server calls — is the most common pricing method for Web analytics tools. Depending on the vendor, the base price is based on a per-million server call rate. Rates range from $50 to $500 per million server calls, based on yearly volume. Each vendor has a unique combination of add-on charges in their price quotes, such as for users, profiles, data retention, reprocessing fees and consulting.
All the Web analytics solutions reviewed here support modern mobile devices and offer toolkits to put usage capture agents into native mobile applications or on back-end application servers. Most offer a "big data"-style warehouse of captured traffic, from which queries about visitors based on segments and behavioral activity can be made. These types of queries are driving online marketing campaigns, such as targeted email, display advertising and social media. The queries can also be used to extract data, to mash with internal data for cross-channel analysis.
Although the top tier of the market has experienced consolidation, new vendors are competing for business as demand continues to grow. This includes secondary players, looking to revive their business, new players using big-data technology, and specialty vendors focused on Microsoft SharePoint, mobile devices, video content, gaming and advertising markets.
Externally facing Web analytics initiatives within organizations continue to be split into clusters in terms of their scope and maturity.
At the low end, tools are used to get basic metrics about a Website, in order to understand usage, justify budgets and forecast infrastructure capacity needs. The value of the website to the organization may be low or poorly understood. The free Google Analytics Standard product is very popular, although many still process log files with Webtrends on their premises or open-source products like AWStats from SourceForge.
In the middle, organizations have defined metrics that reflect business value and processes to optimize the site. There may be limited skilled resources or problems turning analytic insight into action. Most requirements are met by Google Analytics Standard, although some organizations may need better support, additional features or integration with third-party marketing products.
At the high end, organizations focus on business optimization of their website, and have a properly funded and executive-led initiative. Attributes include:
- Automated processes to optimize online campaigns and behavior on the website.
- Ability to target landing page content to suit the context of visitors and to customize content to visitors' behavior throughout their visits.
- Ability to mash Web analytics data with other data, including transaction, master customer and third-party data and social media metrics.
We expect the market to remain stable through 2012, but long-term trends could shift the market by 2016. In the short term, the momentum of the leaders presents a major barrier to entry for other vendors. However, successful niches will be carved out, based on regional preferences, customized professional services and availability of specialized analytical features. In the long term, required features will be available from advertising agencies, Web content management systems and e-commerce engines. Also, another round of consolidation is likely, as Oracle, SAP and Microsoft have yet to be competitive in this space, despite offering CRM tools. Oracle, for example, recently acquired Art Technology Group (ATG), FatWire Software and RightNow, and has a large CRM customer base, yet has no credible Web analytics story. This is likely to change.
Top-Tier Vendors
The focus of this report is the top-tier global vendors, although offerings from other vendors may be more appropriate for some organizations.Adobe has about 6,000 Web analytics customers, which generate nearly $500 million in yearly revenue according to its last report.
Adobe's Digital Marketing Suite features the Omniture technology it acquired in 2009. This suite includes over a dozen applications, most of them integrated with Adobe's SiteCatalyst core analytics offering. The latest release of SiteCatalyst (version 15) added real-time segmentation reporting and improved performance.
Included in Adobe's Digital Marketing Suite is a social analytics offering.
Adobe's customers come from a broad range of vertical markets. Many of its customers analyze over 1 billion page views per year.
Adobe has a strong partner program for companies and consultants in the field of digital optimization.
Through its Genesis partner program, it has pre-engineered integration solutions for over 80 companies, over half of them targeted email campaign vendors.
Adobe has integrated its Creative Suite 5.5 with Omniture technology, to make it easier to incorporate optimization and analytic techniques when developing HTML5 and Flash applications.
Adobe has acquired CQ5, a Web content management solution from Day Software, and is working to integrate Omniture's A/B testing, targeting and analytics with it.
Adobe's acquisition of Demdex provides it with an advertising data management platform that is used to store and exchange clickstream, third-party and partner data, and to perform advanced segmentation. It also supplied some of the technology for Adobe's Tag Manager, a tag management product designed to help standardize and simplify JavaScript tagging across Adobe's products.
In addition, Adobe's 2011 acquisition of Auditude provides an advertisement delivery platform for providers of premium video content.
Summary: Adobe has the broadest product line for online optimization. Its vision extends to the embedding of analytics into content management and digital advertising.
Google is the most installed vendor in the Web analytics market, with over 200,000 organizations using its free product, Google Analytics Standard. It is used by website owners around the world, including many that also use other Web analytics products.
Google continues to improve its product through innovation, and has been a driving force in this market, forcing other vendors to play catch-up in terms of ease of use and some advanced analytics features.
However, Google Analytics is limited in its ability to drill down to the visitor level, which lessens its applicability to those who want to drive targeted marketing campaigns from the analytic engine. It also offers limited customer support and has terms of service about indemnity that some corporate lawyers object to.
Google launched a Premium version of Google Analytics in 2011. For a flat fee of $150,000 per year, it provides support and service-level agreements, reduces some of the product's limitations, such as sampling, adds attribution analysis features and changes terms of service. However, its ecosystem of marketing partners is small, especially with regard to integration with email and ad serving vendors. For more details, see "Google Analytics Premium Suitable for Some Enterprise Uses."
Summary: Google provides excellent basic analytics for free, and relevant skills are easy to find.
IBM took a leap into the digital marketing world with its acquisitions of Coremetrics and Unica in 2010. Coremetrics was a pure-play Web analytics firm, while Unica offered Web analytics as part of its integrated marketing suite.
The Unica Web analytics product, NetInsight, will continue to be sold as an on-premises solution, and continue to support processing W3C log files, in addition to tags. IBM is supporting, but no longer selling, the Unica NetInsight SaaS offering, and is taking a phased approach to blend it with the Coremetrics offering. The second phase on 1 November 2011 and integration will continue through 2012.
IBM has many reporting and analysis technologies that could be woven into a marketing optimization solution, such as from its SPSS and Cognos acquisitions, but this is not a major theme in the short term.
The company's hosted product offering is the Coremetrics Digital Marketing Optimization Suite. Coremetrics has about 2,000 customers. Unica NetInsight has less than 1,000 customers.
With Coremetrics, IBM focuses on selling to the retail, financial services, travel and content/media sectors. The Coremetrics suite has add-on applications for tasks such as advertising attribution, targeted email marketing, product recommendations and search marketing. It also has prebuilt integration with IBM's WebSphere Commerce product. It provides a benchmark reporting service across its customer base, for those that opt in to allowing their data to be shared. It also has a social analytics offering. The Coremetrics Connect partner program attracts optimization ecosystem partners, especially in the fields of email and ad serving, to link with its analytics and recommendation applications.
Summary: Beyond the features of Coremetrics, and the on-premises offering of Unica NetInsight, IBM has a broad vision to integrate analytics with cross-channel marketing processes. However, it is still early days for the execution of this vision.
Webtrends, which operates as a private company, is the largest pure-play Web analytics vendor. It has over 3,500 analytics customers, with about 2,700 on-premises and 800 SaaS-based.
Webtrends remains a leading on-premises choice, where it supports both W3C log files and JavaScript tagging. Webtrends has additional products in its suite, such as those to perform A/B-multivariate testing and content targeting. It also offers an integrated module to analyze intranet or customer-facing sites built using Microsoft SharePoint.
Several recent acquisitions have led Webtrends into new markets. The acquisition of Transpond resulted in Webtrends Social, a platform with a series of engagement and content applications that can be used to add functions like polling, quizzes, blogs and image feeds to social media campaigns. The acquisition of Reinvigorate gives Webtrends additional real-time analytics capability and heat map technology, along with a lower-cost analytics tool for the low end of the market. Integration of Reinvigorate technology will occur through 2012.
Webtrends recently launched a revamped version of its analytics product, Analytics 10, which centers on a portal-like concept that it calls "spaces," to integrate measurement of multiple online channels, such as mobile and social, on to a single platform. These emerging channels are the focus of the company's investments and marketing programs.
Summary: Webtrends is pushing the boundaries of visualization and social and mobile analytics in order to enter new markets. But it has yet to take significant market share from its traditional competitors.