A Brief History of Enterprise Digital Analytics, or: How I Learned to Stop Worrying and Love Google Analytics

As the inaugural Analysis Engine blog post, I thought it might be helpful to explain why we built this thing in the first place. As we geared up for the launch, we showed the product to a lot of very smart people in the analytics space. Without fail, they have always stated that Analysis Engine creates the ‘last mile’ solution that lets big companies take advantage of the power of Google Analytics.

We believe that Google Analytics, used in concert with Analysis Engine, creates a digital measurement solution that is more powerful, more usable, more flexible and much more cost-effective than any other currently available enterprise offering. To properly understand why, I thought we would start with a quick history of the space.

First stop, the early ‘00s. It was a simpler time; your cellphone’s coolest feature was playing Brick Breaker and Coldplay was considered an awesome band. It was also an expensive and complicated time to manage a large digital property.

Most web solutions were custom software, often developed by in-house teams. This meant that any major updates to the site were coded by hand, unique to the business, and required ongoing internal maintenance and support. Web analytics often fell under the build vs buy umbrella and many large firms built significant (and often very screwy) internal measurement tools. For firms that wanted to buy a solution, the primary choice was Webtrends, which analyzed internal server logs, and increasingly newcomers like Coremetrics (now IBM Digital Analytics) and Omniture (now Adobe Analytics), which relied on site tagging and cookie data instead.

By 2005, very few firms were building their own measurement tools and there were a ton of options available in this emerging measurement marketplace. I would list them all, but suffice it to say that Omniture, Webtrends and Coremetrics were the category leaders. An arms race began between these companies to see who could build the most sophisticated measurement tool, and features rather than price became the focus of competitive sales situations. If you were an enterprise buying a web analytics tool between 2005-2010, the pitches you would receive would be on functionality, not value.

The problem with the features arms race is that it created a group of enterprise tools that were increasingly hard to use, implement and maintain. The project required to set up an enterprise analytics tool during this period was very costly.

From here, we started to see consolidation in the marketplace, with web analytics software companies buying each other, and eventually themselves being acquired by the big shops like IBM. Pretty standard stuff.

The one outlier in this story is Google Analytics, and it helps explain why we created the Analysis Engine.

In 2005, Google bought an analytics software company called Urchin and in the fall of that year released Google Analytics. Here are the two key reasons why this was such a disruptive move, and such a big deal for the state of measurement in 2014:

  1. Google Analytics was free.
  2. The mandate of Google Analytics was the be the best web analytics tool for everyone, not just the enterprise.

I was an analyst when this happened and trust me, it was a big deal. Even the early versions of Google Analytics had a very strong emphasis on being easy to set up and use. Over the subsequent couple of years, not only did millions of small web businesses start to take advantage of digital analytics, but a lot of large organizations got Google Analytics as well, even if they were already using one of the big enterprise tools.

I should point out that Google’s choice to give away a cutting-edge tool for free wasn’t made out of the goodness of their hearts. They very smartly realized that in better understanding data, businesses large and small would buy more advertising. It’s no coincidence that Google’s advertising products are automatically integrated into Analytics.

Google Analytics continued to evolve over the nine years since it’s launch, to the point where it became a technology leader in areas like attribution and segmentation. Based on customer demand for a SLA-supported offering, it even entered into the enterprise space with the creation of Google Analytics Premium in 2011. Unlike it’s enterprise-focused competitors, though, Google stayed true to its core mandate of being the best web analytics tool for everyone, and ease of integration and reporting has been a key element of every new update.

Back to the present: Digital executives making a decision on a web analytics tool are faced with a choice between either Google Analytics, or another enterprise offering. They have staff who love using Google Analytics, it seamlessly integrates into many of their key advertising initiatives, and setting it up and maintaining it are very cost effective. Despite this, 9 out of 10 times they are probably going to choose the enterprise solution, and it’s because the development mandate of GA:

A tool that has to be the best for everyone isn’t good enough for the enterprise.

There are key things that big companies need from software before they can buy it. It needs to have administrative, user rights and event logging functionality for big IT and HR groups. It needs to easily connect to all the other software they have acquired, and not act as a totally stand-alone solution. It needs to fit into big company workflows, where lots of people produce reports for a different group of people who consume them.

For these reasons, big companies are forced to write big checks for big implementations of over-complicated enterprise analytics tools.

That’s where we come in: Google Analytics is the best web analytics tool for everyone. Analysis Engine adds the features to make it the best tool for the enterprise.

Cheers,

Jim

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