Google's Foray Into Web Analytics: Does Low Cost Mean Low End?Google's Foray Into Web Analytics: Does Low Cost Mean Low End?

Web analytics' time has come, according to Jupiter Research, which estimates that 83 percent of U.S. businesses exceeding $1 million in revenue haven't invested or are underinvested in this type of software. "Companies have more data than they know what to do with, which is why there has been rapid uptake of Google's free [Web analytics] service," says Jupiter's David Schatsky, senior vice president.

Executives at more established, dedicated Web analytics companies — a camp that includes CoreMetrics, Omniture, WebSideStory and Webtrends, among others — say they're counting on Google's service to spur growth and whet appetites for more robust capabilities. Meanwhile, Google is moving it's "low-end" offering upstream, and Yahoo recently chimed in with its own, very different online marketing service.

In mid-December, Yahoo and Marketing Management Analytics launched a service that helps advertisers determine the effectiveness of ads on Yahoo, comparing the impact on sales against ads in other media, whether on another Web site, on television or in print.

"Rather than focus on how specific Web camps push sales through online channels, we look at helping customers determine how much to invest in online marketing relative to other investment opportunities," says John Nardone, chief client officer at Marketing Management Analytics. "We don't look at online analytics in isolation, as we think companies have to consider all options. We look at consumer promotions, sponsorships and other facets of a marketing mix that drive business."

Jupiter's Schatsky says he believes the companies most likely to succeed in the Web analytics market will be those that can link operations and analytics — not only defining and interpreting metrics but helping companies to act on analyses.

Google Analytics provides dashboards as well as marketing, merchandising and site-optimization reports derived from the tag-based measurements of site traffic. By implementing JavaScript into page headers, companies can see how visitors found and interacted with their Web sites, such as what PDF downloads and JavaScript and Flash events took place. Google is offering unlimited page views to customers of its AdWords advertising service and 5 million monthly page views to noncustomers.

Competitors cast Google Analytics as a "one-size-fits-all" approach that does not measure up to software and services from established players. "You have to be able to tailor and customize analytics to individual markets and needs to have a significant impact," says Gail Ennis, Omniture's vice president of marketing. She contends Google's offering lacks "end-to-end visibility" into campaign results; measurements of specialized variables such as revenue, sales and subscriptions; and integration with third-party software such as sales force automation and campaign management.

But Google is honing its service and it's "working with some of the largest advertisers and publishers in America — even customers of other Web analytics software solutions — to improve the product," says Richard Holden, director of product management for Google.

Holden says Google isn't focusing on small, low-traffic environments. The company offers three levels of support. Low-end customers might have to rely on help files and tutorials, but higher-end clients will have access to technical support and third-party teams that can provide sophisticated sales engineering.