A Market DividedBy Mel Duvall | Posted 2002-08-13 Print
With big intelligence software vendors moving into their turf, Web analytics companies must evolve or die.
A Market Divided
The market remains highly fragmented with no one vendor owning more than 14% of the pie. NetIQ claims the top spot due to the popularity of its low-cost WebTrends log analyzer product. Eight companies closed their doors in 2001, including Audientia and Primary Knowledge.
Aberdeen Group estimates the Web analytics market suffered a 7% decline in sales in 2001. It forecasts that the market will recover somewhat this year, and anticipates further growth after that.
The evolution within the industry is being driven by customers who need to perform the same kind of in-depth analysis of their Web business that they have been doing in their offline businesses.
"What we are attempting to do with Web analytics is essentially the same sorts of things we do in our stores," says Gary Beberman, director of technical research at Macys.com, the Web site for the San Francisco-based retailer.
"I want to look at where customers go once they enter our store, how they gather around the equivalent of store escalators, and what departments or merchandise catch their attention. I then want to use that information to guide us in how we put merchandise that the customer is most interested in, front and center on their screen."
Macy's has been using a Web analytics package from Accrue for about two years, and decided earlier this year to step up to its more advanced Accrue G2 suite. A deciding factor, says Beberman, was a feature in the software that allows Macy's to determine the exact path a customer used to reach an individual product, and how the purchasing rate varies by path.
Ideally, Beberman would like to take all of the information about a product being gathered from the Web analytics software and combine it with existing internal data and outside data, so marketing and planning personnel could work from a single dashboard. But for now, that remains on a wish list.
That desire to combine Web data with other sources of information is a recurring theme among users. And, Aberdeen analyst Guy Creese believes, provider-delivered Web analytic services will eventually overtake licensed software providers.
In fact, Dow Jones & Co. says it decided to switch from Accrue to a hosted offering from digiMine earlier this year, because it would have been too costly to build custom connectors that would allow it to combine its existing customer data with information coming from its Web properties. Dow Jones operates the Wall Street Journal Web site, which has 646,000 paid subscribers.
"DigiMine combines the data for us and produces reports for our review. It allows us to understand the value of different customer segments much better," says general manager of consumer electronic publishing, Todd Larsen. "Accrue has some nice technology, but our fundamental goal was to be able to marry our data."
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