Outlook 2011: Survey Report

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Web Analytics Association

Outlook 2011: Survey Report

Prepared by the Web Analytics Association February 2011

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Notice To Readers

Copyright and usage guidelines:

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A Message from the Chairman

We’ve come a long way since the Web Analytics Association was founded in 2004. The industry is maturing, the respect for web analytics is growing and the application of web analysis to business problems is becoming more mainstream.

The individuals we surveyed are growing more experienced. Those with 10 years of more experience went from 5% in 2009 to 10% in 2010 and 17% this year. This is one sign that web analytics as an industry is maturing.

Other indications of industrial maturation is that Business Intelligence is more responsible for web analytics than ever. The Marketing Department was in charge of web analytics in 46% of organizations in 2009 and then 41% in 2010. This year, that’s dropped to 34%. IT is giving up control as well, as ownership of web analytics is shifting more and more to BI. The Business Intelligence and Analytics department was responsible for web analytics in nearly 25% of organizations in 2011 compared to only 19% last year.

At the same time, concern about funding for web analytics has become a smaller challenge from previous years. In 2009, 40% said that securing investment for web analytics would be their hardest challenge.

That dropped to 27.5% in 2010 and didn’t even make the top ten list this year. Organizations are recognizing the value of web analytics and are willing to invest.

The final indication of industry maturation is the desire to integrate web data with other marketing data.

We may have been sidetracked by the need to get a handle on social media metrics, but we know that it too is yet another stream to be added to the marketing intelligence mix.

Driving web decisions with web data has been our private purview. Driving marketing decisions with web data has been our near-term goal. Now it looks like the rest of the organization is recognizing the value of driving business decisions with web data. We seem to be going from strength to strength.

Happy reading.

Jim Sterne

Chairman, Web Analytics Association

About the WAA

The Web Analytics Association was founded in 2004 and opened to general membership in February 2005. The WAA unites and fosters the interests of industry practitioners, vendors, consultants, and educators, who use, sell, install, implement, consult, teach, or train in the field of web analytics. With over 1,500 members, the organization has committees and initiatives for education, advocacy, standards, research, events, marketing, public sector, international, and membership. More information about the WAA can be found at webanalyticsassociation.org.

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Executive Summary

From November 12 to December 10, 2010, The Web Analytics Association presented a survey to web analytics end-users, who were asked to participate through web analytics-related web sites, e-mails and events. A total of 356 web analytics users from the around the world participated in the survey. The survey examined the current state of the web analytics industry, and asked participants questions such as:

What is the purpose of web analytics as a function in your organization?

• What kind of web analytics solution do you use?

• Are you satisfied with your vendor?

• What features or capabilities would you like to see?

• Does your organization use more than one web analytics solution?

• Why or why not?

•

The survey asked questions about future initiatives, priorities, and challenges for 2011, such as:

What are your biggest challenges likely to be?

• What do you perceive are the greatest challenges facing the entire web analytics industry?

• What will be your top web analytics initiatives?

• How much will your online analysis budget change over 2010?

• Where will your investments go?

• Which channels have established key performance indicators (KPIs)?

• Where do you plan to establish and implement KPIs?

•

The survey also asked about current levels of web analytics expertise and examined how much of a priority organizations are making web analytics:

How would you rate your knowledge of the latest web analytics trends, strategies and

• technologies?

In which areas would you most like to improve your knowledge?

• Which department in your company is primarily responsible for web analytics?

• How much of a role does IT play in the decision-making process when selecting web

• analytics solutions or marketing applications?

How many full-time employees in your company are responsible for web analytics?

• In addition to full time employees, which of the following does your company use to provide

• web analytics support?

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Survey Findings

Examining the results of the survey, there were three key findings that provide insight into what the future holds for the web analytics industry:

1. Spending Continues to Grow: This year, 54.6% of organizations indicated they’d be

increasing their spending. That’s a very slight dip from last year, when 55% said they would. Of course, a large percentage (42.9%) say they’ll keep spending where it is right now. But what’s really encouraging is how few—only 2.6%—plan to decrease their investments in online analysis in the coming year.

2. Data Integration, Training, Tools Top Priorities: Integrating data with external or third- party applications will get the most investment, with 49% saying it’s the top priority. 44.4% plan to invest in training and education for web analytics staff, and 40.1% will be spending on add- on tools. Data integration is a priority but also a potential problem. When asked they perceive are the greatest challenges facing the entire web analytics industry, multichannel measurement received the most overall responses.

3. Social Media is Here, and Mobile is Next: Nearly 65% of organizations are planning to establish and implement social media KPIs in 2011, and 49.5% say they’re planning to do so for mobile media. However, only 23.7% of respondents say they have established KPIs for mobile right now. This is a huge opportunity—2011 could be the year of the mobile marketing boom—

but only if the right measurement strategies are in place.

Read on to learn more about the current state of the industry and the future of web analytics, and get an up close look at the survey results, including comparisons to data collected from the previous WAA Outlook survey reports. Before we examine the key findings of the survey, let’s take a look at the profile of our participants: their job function, company size, industry, and geographical location.

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About the Participants

Job Function

As we can see here, the survey respondents have a wide range of job functions, with web analysts in the lead with 34.4% and online marketers following at 16.9%. The “other” category, at 11.2%, includes those with jobs in finance, content development, market research, public rela-

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1.7%

2.9%

4.1%

4.4%

5.2%

11.1%

11.2%

16.9%

34.4%

Business Development IT Product Management

Project Manager ECommerce Business Intelligence Executive Management Consultant Other (please specify) Marketing: Primarily Online Web Analyst

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51-100 employees

7%

101-500 employees 18%

1-50 employees

32%

501-1,000 employees

7%

1,001-5,000 employees

9%

5,001+

employees 27%

About the Participants

Company Size

This year, there are more respondents working for large employers—in fact, 27% said they were with a company with over 5001 employees. Last year, it was 21%, and the year before it was 15%. The number of smaller employers has also shifted. Last year, 46% of respondents said they were part of businesses with fewer than 100 employees, and this year, that percentage has dropped to 39%.

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1.2%

2.1%

2.4%

2.9%

3.2%

4.1%

4.4%

5.6%

6.2%

7.6%

9.1%

9.7%

10.6%

28.5%

Entertainment Telecommunications Manufacturing Automotive Travel & Hospitality Insurance Healthcare Government Education Media Financial Services

Retail Business Services Other (please specify) High Tech Agency/Consultancy

About the Participants

Industry

When it comes to the type of industry we’ll be looking at, agencies and consultancies are first with 28.5%, and next we have high tech at 10.6%. The “other” category includes non-profit, energy, and real estate. After that, we have business services, retail, financial services and media industries.

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About the Participants

Geographical Location

The majority of respondents are currently located in the US (56%) and Canada (14%), with 19%

located in Europe, the Middle East, and Africa, 8% in Asia Pacific, and 3% in Latin America.

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US 56%

Canada

14% Asia Pacific

8%

Latin America 3%

Europe Middle East

Africa 19%

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Survey Results

We surveyed over 350 professionals in the web analytics industry to find out what their outlook will be in 2011.

• What are their challenges?

• Where will they be spending their budgets?

• What are the most important issues they foresee, and how will they be turning those potential pitfalls into growth opportunities?

Survey Results, Part 1: The State of the Industry

Before we dive into the outlook for 2011, let’s take a look at the current state of the industry.

What is the purpose of web analytics as a function in these organizations? What kind of web analytics solution do they use? Are they satisfied with their vendors? What features or capabilities would they like to see? Do these organizations use more than one web analytics solution? Why or why not?

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5.6%

32.7%

41.0%

48.6%

49.8%

67.3%

73.7%

79.7%

Other (please specify) Budgeting and planning for upcoming business objectives Predictive metrics for developing future

marketing campaigns Baseline information for site redesign Determining the best creative executions through A/B and multivariate testing Optimizing performance of and conversions from marketing campaigns Analysis of past performance Optimizing web site functionality and conversion

Survey Results, Part 1: The State of the Industry

What is the purpose of web analytics as a function in your organization?

Most organizations have been primarily using web analytics to optimize their web site functionality… and that hasn’t changed much over the past two years. Last year, 78% were using web analytics for optimizing site functionality and conversion, and this year, 79.7%

are. However, more organizations are using web analytics for determining the best creative executions through A/B and multivariate testing this year—49.8%, compared to 36.9% last year.

It’s interesting to note how many organizations—73.7%—are using web analytics for a rear- view mirror look at past performance, while less than half—41%—are using them as predictive metrics for future campaigns.

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0.8%

2.8%

6.9%

14.9%

26.6%

45.2%

None Small vendor solution in one department,

one domain Home-grown solution Other (please specify) Moderate vendor solution across departments, more than one domain Free vendor solution Large-scale vendor solution across global

enterprise and multiple domains

Large-scale vendor solutions lead the pack with 45.2%—that’s up from last year, when 40.2%

said they were using them. And there has been an interesting shift in the use of free vendor solutions … the percentage of organizations using them has gone down. This year, 26.6% are using free solutions, while nearly 30% of organizations said they were using them last year.

Moderate vendor solutions are being used by 14.9% of organizations, 2.8% are using home-grown solutions, and 2.8% have a small vendor solution in one department with one domain. The “other” category, at 6.9%, represents organizations that use multiple solutions or hybrid solutions. And the number of organizations who don’t use any kind of solution is negligible—0.8%. That’s down from 1.1% in 2010 and 2.7% in 2009.

Survey Results, Part 1: The State of the Industry

What kind of web analytics solution do you use?

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2.1%

5.8%

8.2%

21.0%

28.8%

27.2%

7.0%

1 Extremely dissatisfied

2 3 4

Neither satisfied nor

dissatisfied

5 6 7

Extremely satisfied

Survey Results, Part 1: The State of the Industry

Are you satisfied with your vendor?

Good news for web analytics vendors… most respondents in this survey indicated they are satisfied with the vendors they’re using. In fact, 7% said they are extremely satisfied. Only 21%

said that they’re neither satisfied nor dissatisfied with their vendor, and 16.1% ranged from mildly to extremely dissatisfied.

When asked what they’d like to see in their web analytics solution, the most common comment from survey respondents is that they’d like to have better customer service and support.

Advanced segmentation features were also high on the list, as well as more efficient ways to integrate web analytics with other solutions.

One respondent said they’d like to see “More seamless integration between the vendor’s modules, and stronger, more organized relationships between the vendor and their third-party partners.” And as we’ll see, data integration is going to see a large amount of investment in the coming year.

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No, we all use the same

solution 39%

Yes, various departments use different vendors

61%

Survey Results, Part 1: The State of the Industry

Does your organization use more than one web analytics solution?

For the first time since we’ve conducted this survey, a clear majority of respondents (61%) say they are using more than one solution. Last year, 49% of organizations indicated that various departments were using different vendors, and two years ago, 44.3% said that was the case.

When asked why they do or do not have multiple solutions, the responses varied. Many of those who said they are using a single solution indicated also that they are using Google Analytics, and they said that cost savings was the reason. The majority of those using more than one solution said that one web analytics solution was unable to fill all the different needs in their organization.

Survey Results, Part 2: Looking Ahead

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21.7%

25.6%

26.0%

27.1%

29.1%

31.0%

31.4%

34.9%

35.3%

36.0%

Best practices implementation Internal collaboration between departments

Data integration with external or third-party applications Staffing

Mobile Failure to take action on the data Executive management awareness and support of web analytics

Social Media Business decisions driven by analytics

Actionability of the data

Survey Results, Part 2: Looking Ahead

In 2011, your biggest challenges will likely be which of the following?

Here’s an interesting shift. In 2009, the largest hurdle organizations predicted for themselves was funding—40% said it would be their biggest challenge. In 2010, funding dropped to sixth place, with 27.5% predicting that it would be a big challenge for them. This year, funding didn’t even make the top ten shown here—only 15.5% said it would be a challenge.

What do they see as the biggest challenge? Like last year, actionability of the data is at the top, according to 36% of respondents. Making sure business decisions are driven by analytics was next with 35.3%—it also came in second last year. Social media will also be a big challenge for many in 2011, according to 34.9% of respondents.

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Survey Results, Part 2: Looking Ahead

What do you perceive are the greatest challenges

facing the entire web analytics industry? (select top 3)

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9 17 12

15 5

26 21

28 30

35 29 29

11 14 23 23 26

10 23

16 20

29 17

41

17 13

18 16 24

20 15

19 18

18 36

34

Consumer education Education Measuring new media

Integration Lack of process in web analytics

Data accuracy Lack of qualified staff

Privacy Lack of standards

Actionable data Perceived value of web analytics

Multi-channel measurement

Top challenge Second challenge Third challenge

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Survey Results, Part 2: Looking Ahead

What will be your top web analytics initiatives in 2011?

According to our survey respondents, the top initiative in 2011 will be making sure business decisions are driven by analytics, with 69.3% selecting it as their main priority. And 61% said that acting on the data to improve site performance would be key. Most organizations seem to have all the information they need—but they realize that they aren’t using that information effectively Next on the list of top initiatives is best practices implementation at 46%, and ensuring executive management awareness and support, with 40.1%. Developing and implementing processes, training and education, integration of current and new solutions and KPI development round out the first part of the list of top web initiatives.

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38.0%

38.3%

39.0%

39.7%

40.1%

46.0%

61.0%

69.3%

KPI development Integration of current and new solutions Training and education Developing process/

implementing process Executive management awareness and support Best practices implementation Acting on the data to improve site performance Business decisions driven by analytics

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Survey Results, Part 2: Looking Ahead

Top web analytics initiatives compared to 2008-2010

Let’s take a look at the top four web analytics initiatives compared to those in 2010, 2009 and 2008. They were very similar, and respondents were equally focused on productivity enhancement such as developing best practices and getting executive management awareness and support. Acting on the data to improve site performance was an option added last year, and it

n=469

43.5%

39.3%

47.8%

39.4%

49.4%

65.1%

41.0%

48.1%

69.2%

63.5%

40.1%

46.0%

61.0%

69.3%

Executive management awareness and support Best practices implementation Acting on the data to improve site performance Business decisions driven by analytics

2011 2010 2009 2008

n=287 453559 596

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0.0%

0.7%

1.5%

0.4%

42.9%

13.8%

17.1%

10.2%

13.5%

Decrease more than 30%

Decrease 20-29%

Decrease 10-19%

Decrease 0-9%

Flat Increase 0-9%

Increase 10-19%

Increase 20-29%

Increase more than 30%

Survey Results, Part 2: Looking Ahead

In 2011, how much will your online analysis budget change over 2010?

Great news in uncertain times—online analysis spending will be increasing significantly in 2011.

Of course, a large percentage (42.9%) say they’ll keep spending where it is right now. But what’s really encouraging is how few plan to decrease their investments in online analysis. All together, only 2.6% will decrease their budget any amount. And no one is making drastic, 30% level cuts.

It makes sense that as web analytics budgets will increase or remain steady. According to eMarketer, “The economy may be on an upward trajectory, but continued caution among advertisers will lead to a continued shift toward online advertising... eMarketer… projects a 10.5% increase in US online ad spending next year, followed by double-digit growth every year through 2014 when spending will reach $40.5 billion. ‘It may seem ironic, but marketers’

economic concerns are leading them to spend more for online advertising,’ said David Hallerman, principal analyst at eMarketer. ‘This trend reflects how most forms of internet advertising are now seen as more of a “sure thing” than most traditional media.’” (“Online Ad Spend Continues Double-Digit Growth.” December 6, 2010)

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1.5%

29.7%

68.8%

3.9%

44%

52.1%

1.3%

43.5%

55.2%

2.6%

42.9%

54.6%

Decreasing Remaining flat Increasing

Survey Results, Part 2: Looking Ahead

Online analysis budget change: 2008-2011

In the 2008 survey, 68.8% of respondents said they would be increasing their investment in web analytics. In 2009, that number went down to 52.1%. In 2010, it increased to 55.2%, and now it’s decreased just a bit, to 54.5%. So, we’re still not seeing increases at the levels of 2008, but analysis budgets are still seeing a significant boost.

n=275 542568 475

2011 2010 2009 2008

4.7% 4.7%

8.6%

19.5% 24.5%

26.8%

35.8% 40.1%

44.4% 49.0%

Purchase of primary web analytics tools—migrating to a new platform with the same solution/vendor

Purchase of primary web analytics tool—first installation Switching your primary web analytics solution/vendor Upgrade of primary web analytics tools—migrating to a new platform with the same solution/vendor

Engage web analytics consulting Increase investment in training and education for

consumers of web analytics reports and analysis Increase web analytics staffing Add-on tools, such as behavioral targeting

or paid search management Increase investment in training and education for web analytics staff Data integration with external or third-party applications

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Survey Results, Part 2: Looking Ahead

In 2011, your investments will go towards which of the following?

When it comes to following where the money will go, we see that data integration with external or third-party applications leads the list, with 49% saying that they’re planning to invest in this area. 44.4% will increase investment in training and education for web analytics staff, and 40.1%

will invest in add-on tools such as behavioral targeting or paid search management. In addition, 35.8% will use the money to increase web analytics staffing. When we look at current staffing levels for many of these organizations, we’ll see that it’s a good thing.

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2011 2010 2009 2008

4.7%

8.6%

19.5%

24.5%

26.8%

35.8%

40.1%

44.4%

49.0%

Purchase of primary web analytics tools—migrating to a new platform with the same solution/vendor

Purchase of primary web analytics tool—first installation Switching your primary web analytics solution/vendor Upgrade of primary web analytics tools—migrating to a new platform with the same solution/vendor

Engage web analytics consulting Increase investment in training and education for

consumers of web analytics reports and analysis Increase web analytics staffing Add-on tools, such as behavioral targeting

or paid search management Increase investment in training and education for web analytics staff Data integration with external or third-party applications

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7.8%

11.0%

12.3%

12.8%

15.5%

16.0%

16.4%

23.7%

27.4%

32.9%

37.4%

39.3%

75.3%

Radio Location-based Media Other (please specify) Television Viral Marketing

Widgets RSS Consumer-generated Content

Mobile Media Print Media Twitter Online Video

Social Media Facebook E-Mail

Survey Results, Part 2: Looking Ahead

For which channels do you have established key performance indicators (KPIs)? (select all that apply)

E-mail is clearly the marketing channel that is most established as far as KPI measurement goes—75% of respondents say that they have KPIs for this channel. However, when it comes to Facebook, just 39.3% say they have key performance indicators in place, and the same goes for other social media channels. For online video, 37.4% have KPIs, and for Twitter, it’s 32.9%.

Print is at 27.4%, and only 23.7% have KPIs for mobile media.

And that’s likely to become a problem for marketers and web analysts alike in 2011. According n=219

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4.0%

9.9%

12.9%

14.4%

19.3%

19.8%

24.8%

40.1%

40.6%

42.1%

49.5%

64.9%

Radio Television Print Media RSS Widgets Viral Marketing Location-based Media Consumer-generated Content E-Mail Online Video Twitter Mobile Media

Facebook Social Media

Survey Results, Part 2: Looking Ahead

Indicate whether you plan to establish and implement KPIs for measuring the following technologies and strategies in 2011: (select all that apply)

Nearly 65% of respondents are planning to establish and implement social media KPIs in 2011.

49.5% plan to do so for Facebook, and 42.1% for Twitter. And 49.5% say they’re planning to implement KPIs for mobile media. As MarketingSherpa put it, “Marketers have not adopted mobile strategies in large numbers. However, many have started experimenting with SMS,

mobile web sites and mobile apps—similar to how marketers experimented with social marketing in 2009. It’s clear that mobile marketing is still emerging—in 2011, mobile looks to become what social media was for 2010.” (“Consumer Marketing Trends from 2010,” Dec 16, 2010.)

It could be that 2011 is the year of the mobile marketing boom. We’ll see what happens—and find out how web analytics is going to measure the results—in the coming year.

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Survey Results, Part 3: The Industry Up Close

Now let’s look at the current levels of web analytics expertise and find out how organizations are making web analytics a priority. We’ll see how practitioners rate their knowledge of the latest web analytics trends, strategies and technologies, and find out in which areas they would most like to improve their knowledge. We’ll also see which department is primarily responsible for web analytics, and how much of a role IT plays in the decision-making process when selecting web analytics or marketing solutions. In addition, we’ll discover how many full-time employees are responsible for web analytics, and the many ways organizations have been getting web analytics support.

Survey Results, Part 3: The Industry Up Close

How would you rate your knowledge of the latest web analytics trends, strategies and technologies?

3.6%

16.9%

46.0%

33.5%

Poor:

Could be better

Fair:

Somewhat able

Good:

Capable at web analysis

Expert:

Extremely proficient

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7 to 10 years 18%

10+ years 17%

1 to 3 years 33%

Less than 1 year

5%

4 to 6 years 27%

Survey Results, Part 3: The Industry Up Close

How many years of experience do you have in web analytics?

Another year has gone by, and we’re seeing a more experienced group of web analytics practitioners. In fact, the percentage of those with 10-plus years of experience has gone up significantly. This year, the number is 17%, up from 10% in 2010, and 5% in 2009.

Plus, there are fewer respondents with very little experience. Last year, 12% said they had less than one year of experience—this year, only 5% said so. So it appears that in 2011, web analytics professionals will have more expertise and more experience than before.

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31.0%

31.8%

33.5%

33.9%

41.6%

51.4%

53.9%

55.5%

Segmentation Analytics reporting Statistical Tests Measuring Web 2.0 Technologies Social Media Marketing Targeting and Segmentation Predictive Modeling Mobile Analytics Behavior Analysis A/B and Multivariate Testing

Survey Results, Part 3: The Industry Up Close

In which areas would you most like to improve your knowledge?

When it comes to areas where practitioners want to increase their expertise, A/B and multivariate testing takes the lead at 55.5%. Last year, this area came in fourth at 52.3%. Interestingly, last year, Social media was second on the list (63.4%) while this year, it drops to sixth place. It may be that web analytics practitioners have already done their homework and improved their knowledge of social media marketing… or else they’re not as concerned about it this year. But they should be.

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Survey Results, Part 3: The Industry Up Close

Which department in your company is primarily responsible for web analytics?

Of those we surveyed, 34.4% of respondents said that Marketing was the department primarily responsible for their web analytics. Business Intelligence and Analytics were responsible for web analytics in nearly 25% of organizations. IT was responsible for it in nearly 10% of those surveyed. Last year, marketing was at 41.2% and Business Intelligence/Analytics was at 18.8%, whereas IT was at 5.8%. So we’ve seen a shift there, especially when we look at 2009, when Marketing was primarily responsible for 46.3% of organizations.

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0.8%

2.0%

3.2%

7.5%

8.3%

9.1%

9.9%

24.9%

34.4%

Audience development Product development Customer Experience/

Marketing Science eCommerce/

Online Operations Web services Other (please specify)

IT Business Intelligence/

Analytics Marketing

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Survey Results, Part 3: The Industry Up Close

How much of a role does IT play in the decision- making process when selecting web analytics solutions or marketing applications?

n=256

20.7%

35.5%

31.6%

7.8%

4.3%

Minimal input Average input Major input Primary decision

makers Don't Know

When it comes to selecting web analytics solutions or marketing applications, IT continues to play a role in the decision making process. In fact, while only 7.8% said IT was the primary decision maker, 31% indicated that they have major input and 35.5% indicated that IT has an average level of input. Just 20.7% said they had minimal input.

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Survey Results, Part 3: The Industry Up Close

How many full-time employees in your company are responsible for web analytics?

It’s interesting that 35.9% said that they have only one full-time employee responsible for web analytics, even though we saw previously that 43% of respondents said they were with a company with over 500 employees. In fact, when we look only at those large organizations, 26.2% said they had only one full-time employee devoted to web analytics. Of course, many companies, both large and small, are getting web analytics support from other areas as well see.

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8.2%

35.9%

16.3%

6.9%

12.7%

8.2%

5.3% 6.5%

0 1 2 3 4-5 6-10 11-20 over 20

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4.8%

19.0%

24.3%

40.7%

61.9%

Part-time employees Analytics agencies Contract employees Consultants Employees with a partial commitment to web analytics

Survey Results, Part 3: The Industry Up Close

In addition to full-time employees, which of the following does your company use to provide web analytics support?

Here we see where the help is coming from—61.9% are using employees with a partial

commitment to web analytics, 40.7% are using consultants, 24.3% have contract employees, and 19% are getting their analytics from agencies. Just 4.8% have part time employees providing web analytics support.

About the Survey

From November 12 to December 10, 2010, The Web Analytics Association presented a survey to web analytics end-users, who were asked to participate through web analytics-related web sites, e-mails and events. A total of 356 web analytics users from the around the world participated in the survey. Respondents were asked approximately 35 questions about their use of web analytics today and their planned usage in 2011, their personal experience and level of expertise in the field

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Outlook 2011: Survey Report

Web Analytics Association