Measuring the Impact of Google Analytics

First published November 30, 2005 in Mediapost’s Search Insider

Google’s recent announcement of a free analytics tool has sent shockwaves through the online community. There’s nothing surprising about this. What is surprising is the impact and where it’s being felt.

I’ve been trying to figure out how to approach this story for almost two weeks now. This is my third attempt at this column. I rewrote most of it the day of my deadline. I suspect if I had a few more days, the story would rewrite itself at least a couple more times.

Here’s what I thought the story originally was. The giant, Google, launches a free service and in the process decimates the online analytics industry. I happened to be at a show a couple weeks ago where I had a chance to chat with John Marshall, CEO of ClickTracks, a highly respected analytics provider. Wonderful, I thought, an interview with a victim. This would be great: pathos, tragedy, conflict. I had me a column. John didn’t play along. This wasn’t a tragedy, he said. This would be good for the entire industry. There we had the first twist of the story, and the first rewrite.

I asked John what he thought when he heard Google’s announcement.”My first thought was that I was wrong,” he said. “I didn’t think you could provide Web analytics for free because you can’t afford the cost of support. Customers need a lot of hand-holding. Then, the more I thought, the more I realized that I may not have been wrong. Google is only providing support by e-mail. I don’t think that will be enough. There isn’t a single sale we make where the customer doesn’t have questions during the process. “The main limiting factor in analytics today isn’t technology, it’s people and brain power,” he added. “The fundamental challenge that remains to be solved is the interpretation of the numbers. There just are not enough people who can look at the numbers, get the message and implement the required solutions.”

“If you’re right, and not enough people know what to do with the numbers, won’t Google introducing a free tool ultimately help?” I asked him. “There will be more people than ever exposed to analytics reporting, because there’s no price barrier anymore. Granted, many will be lost, but many will also learn through trial and error. Will this build the overall demand for analytics?” “Absolutely,” he answered. “Google Analytics will ultimately be good for the entire industry. It will boost adoption. More people will use analytics. You have to remember, there have been free tools before. Analog was one of the original analytics programs, and it’s open source, free. In fact, it was developed by the CTO of ClickTracks. We know all about competing with free. We’ll gain more than we lose.”

OK, I thought. John’s putting a positive spin on this. But surely, when Google introduces a free product with a pretty good feature set, it will cause bloodshed. I wrote my second draft, which was along the lines of Google becoming the Big Box of the analytics industry, and wiping out a lot of independents. Thinking I had it locked, I emailed a draft to John for his feedback. My view was that while the chances looked good for quality tools like ClickTracks, there would still be significant pain.

Much to my surprise, John e-mailed back a totally different story. In the one week that had passed since we first spoke, business had never been better! Damn, another rewrite, with the column due in a day.

Here were some of John’s primary points.

First of all, people don’t seem comfortable with the fact that Google is holding all this data about their sites and its performance. “The privacy backlash has expanded in online forums and is creating a groundswell of concerns. Interest in our products is quantifiably higher than before!” wrote John. “Customers are simultaneously aware of Web analytics AND aware of data privacy concerns. The degree to which customers are coming in the doors here at ClickTracks and opening discussions with ‘is my data private?’ has surprised us.” The concerns about privacy have not been restricted to the US., he added. “Our products are popular in Japan where, like the US, there is huge skepticism towards centralized data collection. In our experience, customers want to own their data. Customers are suddenly savvy enough to ask this question before signing up”

Secondly, Google has clearly stumbled out of the starting gate, failing to scale quickly enough to meet demand. “Google is clearly struggling to support this service,” John wrote. “This raises concerns about data integrity and accessibility in the long run, especially for a service where the customer has no recourse.” John’s feeling is that the Google Analytics approach goes a step in the wrong direction, moving closer to third-party collection of visitor data. Google always maintains the same position on privacy. “Don’t worry,” they tell us. “We would never do anything evil with this information.” But they never get around to really telling us what their intention is.

As many are pointing out, the data could be used as intelligence to bump ad prices up or allow for cross site profiling of visitors. Sophisticated customers are aware of this and are asking a lot of pointed question before they commit to an analytics solution. I’m sure Google has been surprised by the impact of its announcement. Demand has been so great that Google has had to lock out users until they get a chance to catch up. But they probably weren’t prepared for the degree of concern over privacy of information, or the emerging portrait of Google as Big Brother.

At this point, I think it’s a pretty safe bet that this will be a topic for at least one or two further columns in the future. But for today at least, this column is done.

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