I caught up with Joe Davis, the CEO of Coremetrics, to discuss the future of paid web analytics, conversion attribution, and more.

Joe, do you think the ambitious additions to Google Analytics may “force” companies like Coremetrics, and all other vendors offering paid solutions, to release a basic version for free?

Google has done a good job of really raising awareness of the power of analytics across their customer base, and their customer base is huge. And for that we’re grateful. Think of all of the little companies – I’m talking one or two-person shops – all over the world who use Google Analytics, but who would never otherwise have invested in an analytics solution.

But now take a step back and think about larger companies, those in the small-to-medium business range and above. Those companies have more complex business models, and they see the value of purchasing their analytics solution from a neutral third party. They’re usually looking for a more sophisticated solution than what they can get for free and they’re willing to pay for cutting-edge technology. So we’re not really worried about Google forcing us to offer a free solution. We’re focused on pushing the envelope of what an analytics solution – and complementary applications – can do, and we believe there are customers willing to pay for that.

What is your strategy to address conversion attribution?

I feel very passionately about attribution. The reason so many companies don’t tackle attribution at is that it’s really, really hard. It’s much easier to just count clicks or impressions and not give true attribution a thought.

But these old models are hopelessly flawed. If you’re assuming that they’re giving you any kind of actionable insight into your business, I’ve got news for you: you’ll either lose your job or your competitor is going to eat your lunch. Period.

As a marketer, you should demand to know the ROI of your many campaigns because they represent a huge expense. They shouldn’t be a black box. The ROI should be backed by hard and defensible data, not by strange double counting and convolutions. As CEO, I demand that of my team. And my board of directors demands it of me.

What kind of services can we expect to see get added to your offering?

I don’t want to give away too many state secrets here. But I’m happy to give you an idea of the things we’re thinking about right now. We’re thinking about how to make numbers matter to different stakeholders in an organization.

It’s not about the data (and this is a mistake a lot of our competitors make); it’s about what the data allows you to do.

We’re looking at ways to make it easier to drive data-driven marketing and business decisions in an organization. We’re looking at delivering even more personalization, at ways to better target people to fundamentally improve their online experience. We’re looking at bridging the gap between the online and offline worlds. And we’re working with our clients to help them identify ways to invest in analytics and applications today so that they can leapfrog their competitors as the economy starts to pick up steam.

Where do you think web analytics will be in a year?

Well, I’ve left my crystal ball at home, but I can say that it’s a very interesting time to be in analytics. We have customers whose in-store sales have fallen off rather dramatically, but whose online businesses are still growing.

More and more companies are shifting their marketing investments to online not only because it’s measurable, but also because it’s improvable. In some ways, the economic situation has been something of a lightning rod for our industry because marketing is under greater scrutiny than ever and CMOs need to build the case that their departments are delivering measurable value.

And our customers are seizing on analytics as a means of creating extremely personalized, targeted and brand-relevant experiences for people. I think we’ll see personalization accelerate and become more sophisticated. We’re excited to see the ways in which social media, especially Twitter, are adding to the analytics picture and I expect to see some more innovation in that arena.

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I have interviewed Avinash Kaushik, Analytics Evangelist for Google. The reason for the interview is his upcoming presentation at IMC Vancouver 2009.

Avinash, have you noticed any effects on the web analytics industry due to the financial difficulties on markets?

Of course. It’s a mixed bag. Some of my dear friends have been laid off, breaks my heart (both for my friends as well as for companies that are being shortsighted).

Decisions around investing in tools are getting pushed off, or in a number of cases people have called their paid analytics vendor to see how they can reduce the code on pages or sample in order to reduce the “pay per page views” cost. As you can imagine, this is not a great strategy.

Yet companies are investing more marketing and sales dollars online (or decreasing it at a much less accelerated rate compared to offline) because of the sheer accountability the channel brings with it.

I think of the current challenging environment as an opportunity for analytics (tools, vendors, professionals) to step in and earn their wings. Let’s stop producing reports; let’s become analysis ninjas and add value to the business today. Not next month. Today. We have data; we are smart; we are supremely placed to ride this wave on top.

If you were to give some advice to companies facing a downturn, what would that be?

For individuals, see the last sentiment above. For companies, now’s the time to move away from “faith based initiatives” and exploit the sweetness of data-driven decision making. Save money (reduce cost). Improve revenue (profitability).

What do you think it will take for all organizations to adopt an analytics-driven business culture?

A crisis (like this one). Embarrassment (seeing their competitors shame them).

What insight gleaned from data has surprised you the most?

One of my greatest was how astonishingly monetizable the Long Tail of Search was. It was this magnificent intersection of marketing strategy and a surprisingly hidden data manifestation. So sweet. If I might add another, Voice of Customer (VOC). I have yet to read a hundred open text survey responses on any site and not find something actionable.

What’s the biggest mistake made by web analysts, or analysts in general?

Focusing too much on giving decision makers what they want, rather than giving them what they need. Sure it is hard. But at the end of the day, the analyst is smartest about the data and the hidden insights. So start with adding 10% Need to the Want. Over time add more (remember you are in the right; it will get easier over time).

Being a Google Analytics Evangelist, you are a big fan of giving people equal opportunity to act on data. If you could democratize data one step further than today, what would you do?

There is a subtle difference in my role at Google. It is not Google Analytics Evangelist. It is Analytics Evangelist, Google. The reason I mention that is my focus internally at Google is to help us create better customer facing data products, be they web analytics (Google Analytics), web optimization (Google Website Optimizer), or competitive intelligence (Insights for Search, AdPlanner, Software Based Keyword Tool, etc). My focus externally is to help the grander ecosystem be a lot more data driven by using tools in those three areas, to recognize value, and to execute.

That context will help me answer your question better. What I would do is to integrate more/faster. There are great opportunities to integrate to give marketers and analysts a more holistic view of their data, and provide much better insights faster. There are a couple of areas I am very passionate about, very tough problems we are working to solve, but if I tell you what they are, I might have to send an NDA to your entire audience and that would just be too hard.

Bonus questions for this blog:

You’re a busy guy. You run ZQ Insights, help Google, write long and insightful blog posts, act as Chief Education Officer for Market Motive, speak at events around the world, and sit on several boards of advisors. What’s your secret to being so efficient and productive?

1) Sleep is optional.

2) Love what you do. And I do.

3) Have an incredibly supportive wife (I have one and she is the wind beneath my wings).

What are your ambitions with Market Motive?

John, Michael and I are quite blessed that Market Motive is doing well and delivering value to its customers. Our suite of products at the moment includes self-driven marketing education, certification courses, and topical actionable workshops. That is a result of listening to our customers and identifying market niches where Market Motive can deliver unique value.

Our near term goal is to keep on that path.

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Avinash Kaushik is speaking at IMC (Internet Marketing Conference) Vancouver 2009 in September. He is the author of the best-selling book Web Analytics: An Hour a Day. He is also the Analytics Evangelist for Google and the cofounder of Market Motive Inc.

 

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