April
15
2008
This morning, less than a week after the announced acquisition, Yahoo! decides that Index Tools will be free. So let’s see that’s
three large Ad Networks (Google, Microsoft, Yahoo!) that have bought/developed a web analytics tool/service provider and are now offering that tool/service for free.
Obviously these behemoths see value in web analytics but not enough to make it a stand alone business. Instead, it increasingly appears that these ad networks think that it’s important to offer analytics as part of the ad suite in that it either draws in business, makes switching to them easier or makes it harder for advertisers to leave – if your spend AND your analytics are tied up in one ad network it will be harder to make the switch to another.
I’d love to see the folks at Jupiter or Forrester weigh in on this but it seems to me that consolidation is making the web analytics market weak and open to extinction as a stand alone. Either the current trend will continue and web analytics will be subsumed by the advertising market or the BI players will resurge and take over the remaining pieces of the WA providers.
On second thought, it will be both. Ad Networks will offer free, entry to mid-level analytics capability across the spectrum of the market (Individuals –> SMB –> Enterprise) while the BI players will integrate the remaining "Enterprise" level web analytics services into their suites in order to offer comprehensive channel analytics and advanced segmentation and data mining capabilities. Watch out folks, there are sharks in the water.
IMHO
Photo Credit: B. Stabler via a creative commons license
Tags: ad network, index tools, loss lead, yahoo
Hi Clint,
I think you read the situation pretty well. What sense would it make for the big networks to buy the likes of WebTrends, Omniture or Coremetrics, and offer them for free? Obviously, a big BI vendor could easily integrate one of them to its paid solution.
Thanks Jacque. I’ve been stumbling around this idea for a while but Yahoo!/Index Tools really cements it for me. Consultants, in particular, will be fine as this plays out (heck, will probably create more work for them!) and publishers/practitioners, except for some integration pains, should be alright…
Hey Clint, great thoughts, I too have been pondering how this will all play out. But I will offer a twist to your hypothesis: the standalone market is avoiding extinction by not standing still.
We’ve already witnessed the commercial analytics vendors increasing the breadth of their offerings through development and acquisitions. I see these companies offering ancillary marketing tools (SEM, SEO, testing, targeting, etc.) and becoming the aggregators of digital data via integration. The real turf war will be over ownership of the world’s data and the ability to make business decisions based on that resource. While the large ad networks may be circling the waters at the edges, analytics vendors will attempt to fend off BI players for enterprise data rights through ease of use, functionality and the ability to simply offer more with their tools. We may see a knock-down drag out brawl, but it’s my opinion that existing enterprise vendors won’t go out without a fight.
Cheers,
John Lovett
JupiterResearch
@John Lovett: Hey John, thanks for sharing your thoughts. I see where you’re going, certainly that seems to be the larger players’ strategy currently. I just wonder if they have the wherewithal to make the stand? The same features that the WA vendors have that you cite as their offensive weapons also are probably the ones that BI vendors get all excited about. And traditional BI has the deeper pockets (currently).
From a certain POV it’s about BI as an IT institution vs. a Marketing Institution – who will win? I hope for the latter rather than the former because the new school IS more agile and more user-friendly.
There’s a pattern here, history repeats itself… Web started in IT, then really grew up with marketing, but is now much more an enabler for most/all business functions (just like electricity in a way). We see the same happening with web analytics: IT centric, then grew up very strongly in marketing, but eventually the focus on ad networks from the Big 3 won’t be sufficient. Web analytics will evolve into “business analytics” and the independent/BI players will then have an advantage. Unless… Unless they seriously start to offer true BI capabilities, data integration and much more customization.
Stephane Hamel
http://immeria.net
@S.Hamel: Stephane … interesting historical perspective. Sort of ties into what John is saying. The strengths of web analytics are very strong but the BI vendors are SO big in comparison I don’t know how the balance works out.
Good post. I’m also a big fan that the Cleveland Free Stamp is once again getting some air time!
I would venture to speculate that they’ve learned from the pervasive use of Google Analytics that free is a good “price” that brings skeptical/new users into the fold to eventually use other services.
We’ll see if they also follow suit in the “contribute to industry benchmarking” the way we knew Google was going to as well.
@Matt G: Like I said … Loss Lead ;~)
I think it’s early yet to speculate on the benchmarking service…
BTW, I didn’t know that the photo is “Cleveland Free Stamp” just thought it was a great photo. What’s the story there?