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The Analytics Gap

The trend towards free analytics technology, accelerated by Yahoo's acquisition of IndexTools and plan to make it a free service , raises interesting questions both for vendors and for organisational planning, writes Lynchpin's Andrew Hood .

At a time when IndexTools is set to join the ranks of the free tools, it is fascinating to note that almost half of company analytics budgets are, on average, still set aside for technology investment, according to the soon-to-be-published E-consultancy/Lynchpin Online Measurement and Strategy Report.

According to IndexTools CEO Dennis Mortensen, 80% of the functionality of Omniture will, in effect, be available for no charge.

Avinash Kaushik's 10%/90% rule for technology versus people investment in analytics is all very well, but if the technology side will ultimately approach the £0 mark, what does that actually mean in practice?

Well, first of all, it might mean that those specifically chasing that technical investment will want to get in there fast and grab market share at any cost before the market evaporates.

It is likely that the consolidation we have already seen in the industry (for example Omniture's acquisition of Visual Sciences) will continue, and that the next player to make a move might well be outside the traditional web analytics sphere (calling Oracle?).

More importantly, it means that organisations need to formalise where analytics sits within their teams and processes. It's easy to get a budget for a free tool (and their pervasiveness is perhaps as much as anything down to that natural fact) but much harder to get the right analysis feeding into the business.

Analytics is absolutely key to strategy, and the industry needs to build services that genuinely help organisations bridge the gap between the technical barriers and the vital business information.

A sneak preview of the Online Measurement and Strategy Report, based on a survey of more than 700 company, vendor and agency respondents, will be presented in London at 16:00 on Wednesday 14th May.

Andrew Hood is managing director at analytics consultancy Lynchpin .

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