Changes in the Web Analytics Market Landscape

The real evolution of the Web Analytics Industry, in my opinion, began when Urchin was acquired by Google back in 2005. In reality, web analytic tools already existed prior to this event, and Urchin was not the first company to use a JavaScript agent. However, what made their solution unique was that (a) they were acquired by Google and soon became a standard solution for most sites, and (b) their JavaScript agent was more than just a pixel request sent to the server.

Over the past few years, we have literally seen hundreds of companies that provide all kinds of segmented web analytic capabilities. From a small industry with very few solutions and almost no successful M&A or investments, this industry suddenly became fertile ground for hundreds of solutions and services. All the industry’s “monsters” (i.e., Unica, CoreMetrics, Omniture, etc.) have since been acquired, and dozens of start-up investments and acquisitions are performed each year.

To date, 99% of the services use the same “old” technique that Urchin used in 2005. Thanks to JavaScript, and mainly due to the privacy ignorance of the users, the software providers, and the authorities, it is possible to obtain services that can tell you almost everything there is to know about your users. This includes anything from something as trivial as pages that the user visited on your site, to invasive things such as other sites the visitor visited earlier, sentences the visitor copied to his/her clipboard, and every keystroke and mouse movement that the visitor performed on your site.

However, it seems that we are now looking at the beginning of a strange phase in the Web Analytics Industry: From almost zero privacy we are moving towards almost zero transparency. From being able to track almost everything about the user, you will soon have to once again rely on the IP and other server-side techniques, in order to identify the user. And you will have to ask your visitors to opt-in, in order to be able to track their activity.

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Lately, these changes can be seen almost every day: companies (both vendors and clients) are being sued for privacy issues, new laws and restrictions are being passed, metrics that you used to rely on no longer exist, etc. Technical changes have been made that no longer enable you to identify the user, and companies such as Google have changed their privacy policies, and now even hide search terms when they refer a visitor to your site.

Don’t get me wrong, I’m all for user privacy. I believe the user should be able to understand what can and cannot be tracked. As a user, there are definitely things I would prefer to keep to myself and not share with the site I am currently visiting (for example, the site’s ability to access my browser’s history). However, I do think that the present approach should be less extreme.

Not only is the present situation extreme, but it is also rather confusing. There are hundreds of tools that the website owner or customer (web analyst/marketer/blog owner) can use, there are very few all-in-one suites, the price range is almost inconceivable, the customer has to continuously choose between services and turnkey solutions, there are no set standards, there an infinite number of terminologies and metrics, etc. On top of that, the customer also has to deal with privacy changes, which in turn lead to technical changes, loss of functionality, and in some extreme cases, lawsuits…

As always, it seems that we have to go from one extreme to the other before finding the right middle ground.

In my next post, I will try to explain why in my opinion – and probably that of others – we are entering an era of mergers and acquisitions (but not for positive reasons), consolidation of services, and to some extent: a “Natural Selection” between the numerous services available.

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