What Does Web Analytics Consolidation, Fragmentation and Wal-Mart-ization Mean to You?

There has been plenty of discussion over the last few days about the consolidation of the web analytics marketplace due to the Omniture/Visual Sciences deal, and some comments on my last posting speculating about the future of Coremetrics and WebTrends.

What strikes me about the discussions of consolidation, is that the very concept is really more relevant if you invest in web analytics companies, rather than use their products.

I wanted to suggest a different theory based on the point of view of a web analytics consumer, rather than a web analytics investor: that the web analytics marketplace is not simply consolidating; it is in fact fragmenting, and there are plenty of options to consider if you are purchasing web analytics solutions.

From an offering prospective, Omniture has acquired two companies (Instadia and Visual Sciences) that are also based primarily on a SaaS/page tag collection model, and also focused on a large company customer base. In this vendor segment that leaves Coremetrics' and Fireclick, and IndexTools as the main competitors, and if you are in Europe, you could also include Nedstat. So within the SaaS/page tag segment of the market,you could say that there has been some consolidation from a company standpoint. However, unless you require complex segmentation, robust Excel reporting, tons of data processing and custom querying, in many respects the functionality is all comparable.

Now let's look at the segment of vendors that offer hybrid solutions, i.e., page tag/log files, SaaS and licensed options. Sadly, many web analytics consumers dismiss these as "log file" solutions...thanks in large part to the marketing hype of SaaS/page tag centric vendors, poor data processing reputation of first generation log file solutions, and reinforcement of others who have only "discovered" web analytics in the last 5 years. From a web analytics consumer perspective, having the potential advantages of hosting and controlling your own data, capturing web site performance data, and the flexibility of using tags for event tracking can be very attractive. ClickTracks, Unica, WebTrends are all worth considering as options...and all have impressive product development paths going forward.

And finally there will likely be quite a bit of activity in specialized web analytics tools for Web 2.0 content that will challenge the Wal-Mart concept of analytics that's become the status quo. I don't mean simply integrating different types of analytics methodologies, but new tools used to analyze evolving content and applications at more discreet levels than current offerings. At the recent eMetrics Summit and through the research I'm conducting for the next edition of the Web Analytics Report, I've learned about ClearSpring, a widget analytics tool, Visible Measures, a video analytics tool, and even an analytics solution for Second Life ad campaigns, called VTracker. And of course there are already existing blog specific analytics tools out in the market already.

Sure, the Wal-Mart, one-stop-shop oriented vendors enable you to track Web 2.0, but newer tools that are lightweight can address specific analytics questions with a lot less fuss than the "all in one" analytics packages. As we've seen with the parallel adoption of Google Analytics in companies that already possess analytics tools, Web 2.0 specific measurement may be another function that can be reported upon outside of the primary web analytics solution.

While its likely that the web analytics marketplace will see more consolidation, the "new wave" of specialty tools suggests more fragmentation at the lower end. And if you think about it, that has always been the life cycle within analytics...players come, players go, and vendors keep evolving the technology to keep up with what needs to be measured.

For perspective, consider that of the first generation analytics big dogs...NetGenesis, Accrue and WebTrends... only WebTrends is on the scene today. We'll see who survives intact on this ongoing evolution, and what new players will emerge. Having been in web analytics since 1996, I'll quote the French novelist Alphonse Carr, "The more things change, the more they stay the same."

So, enough rambling for now...I'm interested in hearing from you: What do you think about consolidation vs. fragmentation, and how are you using lighter tools with your "Wal-Mart" solutions? I look forward to reading your comments.

Comments

[Sean Burton]

I'm inclined to agree to an extent. The American and European markets are still quite different, with more small-medium sized vendors in Europe.

The recent Omniture acquisition of Visual Sciences does lead to a consolidation, but whether this will be good for the actual client only time will tell.

Personally, I'd say that we are seeing a polarisation in the market, with one side focusing on high-end features, and the other focusing on ease of use.

SaaS is seeing a big growth as is the education/training as end users are finding that to make the best use of an analytical tool, especially from an ROI perspective, requires a higher level of resourcing than often anticipated.

The focus for the next few months will be about the ability to make the best use of the data companies hold, and thus enable businesses to become truely data driven.

[Larry Larmor]

The other big area where fragmentation is happening is in "non PC" measurement.

For example measurement of Mobile users - where extra information is available from Mobile Carriers (very value add ISP's) - e.g. www.bango.com/analytics and www.amtheon.com

You can also imagine Wii and other game machines or set top boxes being viewers of web ads / sites and requiring extra info.