Users find value in competitive market for web analytics tools, study says

In a highly competitive market of about 50 vendors of web site analytics tools, users report getting high value out of products often purchased at steep discounts of 20% or more, Forrester Research says in a recent study. Although only 44% of respondents rated their analytical efforts as highly successful, 69% said they received good value for their investment and 62% said they would highly recommend their current vendor to a colleague.

Forrester?s study, ?What Matters to Web Site Analytics Users,? is based on a survey of 52 users, divided evenly among users of hosted applications and users of licensed applications. Users of hosted applications paid an average monthly fee of $7,400 after factoring in an average discount of 34% off the original price; licensed software users paid an average one-time fee of $74,500 after an average discount of 20%, Forrester says.

The discounts are being offered because of little differentiation among a broad base of vendors, Forrester says. Although its study focused on only 14 vendors, the entire market includes at least 50, the firm says. Survey respondents reported paying from less than $1,000 to more than $10,000 per month for hosted applications, and from less than $5,000 to more than $200,000 for licensed software.

And though the market?s pace is still set by fewer than 10 leading analytics vendors, even these vendors don?t stand out individually as they have in the past, Forrester says. For example, Coremetrics, WebSideStory, Omniture and Fireclick (now a part of Digital River) now all offer the ability to annotate web pages directly with site traffic and commerce data, and at least six vendors now offer the ability to analyze historical clickstream data down to the individual user level, Forrester says.

The largest percentage of users, 81%, said their most frequent and critical use of analytics tools was to create and modify reports on customer activity on their web sites. The next most popular use was analyzing search engine traffic, a task cited by 65% of users as the most frequent and critical, followed by creating segments of customers based on shopping behavior, cited by 57%. Other uses, in order of importance: analyzing A/B tests of site features or content; generating and analyzing e-mail marketing campaigns; performing ad hoc analysis using a data warehouse; analyzing site search data; analyzing intranet or extranet usage; and gathering and analyzing data from CRM or other applications.

The study noted some differences in the implementation and technical challenges users faced, depending on whether they were using hosted or licensed applications. Users of hosted applications cited deploying and maintaining data tags on web pages to collect clickstream data as their most common challenge during implementation, and they cited as their most common technical challenge the processing time required to prepare data for analytical reports. Users of licensed software rarely cited either of these problems.

Licensed users reported their most common implementation challenge as creating analytical reports that matched their business goals, a difficulty cited by only a few users of hosted applications.

Licensed users said their most common technical challenge was creating and updating custom reports, a difficulty cited as the second-most common challenge by users of hosted applications.

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