Companies under invest in web data analysis

Many companies are failing to invest in the brain power which can help them get maximum value from their web analytics packages, according to new research.

The second day of the eMetrics Marketing Optmization Summit in London seems like a good time to share some key findings from the Online Measurement and Strategy Report 2008 which E-consultancy has produced in association with Lynchpin.

While a great deal of progress has been made in the use of web data to drive more informed business decision-making, it is clear from our research that many organisations are struggling to develop a framework which allows them to identify and act on the key information.

This isn’t really about how much money is being spent on web analytics. It’s more about how that money is being invested.

According to our survey of several hundred organisations, spending on technology accounts for 45% of company spend on web analytics compared to 18% for consulting and services, and a further 36% on internal staff.

Admittedly, many companies probably underestimate the amount of time (and money) consumed internally on analytics, but the current split here is way off Avinash Kaushik’s oft-quoted rule of thumb which suggests that £90 should be spent on people power for every £10 on technology.

Another finding from the survey was that 43% of organisations do not have any dedicated web analysts.

A propensity to think that the technology package takes care of everything probably helps to explain why less than a fifth of companies (18%) have an internal strategy that ties data collection and analysis to business objectives.

For the record, a bit more encouragingly, more than half (56%) of responding organisations said they are “working on this”, while a further 22% say that they don’t have such a strategy.

The research also found that only a quarter of company respondents (25%) say that their web analytics “definitely” provide actionable insights, with a further 56% saying that this is only sometimes the case.

It is certainly true to say that it is difficult to find people with the right skill set to turn data into tangible next steps. However, this is no excuse for a lack of planning in this area or failure to appreciate the value which a strategic approach to analytics can bring.

Andrew Hood, managing director at Lynchpin, believes that the industry as a whole needs to work harder to ensure that web analytics provide value for organisations.

"There is a massive disconnect between the analytics market and what business needs," he says. "It is vital that the analytics sector addresses this issue and provides the business consultancy and online strategy needed to unlock the potential of analytics software.”

Going back to the ratio of spend on technology and people, it will be interesting to see how this changes, given the likelihood that web analytics will increasingly become commoditised as a result of the free tools available in the marketplace.

Our research findings show that, at least as things stand, companies are using Google Analytics as a complementary tool rather than something which is replacing paid-for solutions.

Of the 246 responding organisations using Google Analytics, only 52 of these (21%) are using this tool exclusively.

For the full research findings, read the Online Measurement and Strategy Report , which is available to subscribers or on a pay-per-view basis.

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