The reading level for this article is All Levels

First they gave us a good search engine. Then they gave us two gigabytes of free server space for email. Now they have given us a high quality web analytics system, for free. Let me just repeat that. They have given us a web analytics system FOR FREE. So what’s this system like? What are its features and how do I see it affecting the web analytics marketplace? This article explains all.

The Web Analytics Marketplace

For a long time now the market has been split into the companies that could afford good tracking at the enterprise level, where the average yearly fee is about $40,000, and those that could only afford around $500-$5000 per year. I don’t see the companies marketing to the enterprises being affected too much.

Enterprise level companies have so many different needs, such as security of their information and high level support, that Googles offer, while probably tempting, will not be a viable solution. Google have slow support and I don’t see that being any different for their analytics solution. In fact I think Google will most likely rely on outside agencies to support the product. I also can’t see the big companies (especially the big publishers and advertising firms) happily handing over all their data to a company that either is or most likely will be their competition.

The companies who will really benefit are the ones that either use 3rd party tracking and pay a comparatively small fee per year or don’t currently use analytics at all. The vendors currently serving the SME sector had better get into the enterprise market. If they don’t they will be out of business within a year because the features of the Google system are as good as some enterprise products I’ve worked with. I’m not usually one to predict impending doom, but I would imagine that the web analytics vendor space could be down to as little as 30 companies from about 120 next year. This is simply because there is very little need to use any paid tool at the lower end of the market when there is a fully featured one available for free.

What features?

Well, I could write an entire book. The system has all the basics, the page views, the visitor counts, the path tracking, the technical info like browser/platform/resolutions, so pretty much everything you need to get the basic reporting done and dusted. However it’s also got what you need to get going with some decent analysis.

For instance you can track scenarios (i.e. figure out where people drop out of a shopping cart or sign up process). You can get demographic information such as what city and what company people are browsing from as well as a global overview to see instantly where most of your visits come from. You have a website overlay so that you may see what links people are clicking in a similar way to that pioneered by Clicktracks. You can cross match one statistic with another, so if you wanted to know how many people whom had visited only your landing page also bought a product or signed up you could find it out. You can find out the top entry pages, exit pages, bounce rates and really drill down into path analysis.

Perhaps most interesting though is the very comprehensive tracking you can do with PPC campaigns, as you would expect from Google. This alone was all I was expecting Google to give away when they acquired Urchin. I figured Google’s strategy in buying Urchin on demand (the system that Google Analytics used to be called) would be to scale down the features and concentrate on the PPC reporting for their customers, leaving the fully featured Urchin system as a separate product. But no, this is the full Urchin feature set, a product you used to pay at least $200 per month for. So is there anything here you should be wary or cautious about?

Beware the lawyers

There are some things about the system you should be aware of that Google (at the time of writing) have not covered to my knowledge. I’ve had discussions with some of the enterprise vendors who have expressed valid concerns about the legal implications of the cookie injection method Google use. Google use a first party cookie. This means that the cookie that is placed on the visitor’s browser is unique to your website – though this is a good thing in my opinion. It is more accurate than third party cookies which are often blocked by software meaning the visitor counts are usually wrong.

The enterprise vendors however all make sure that their clients have the correct privacy statements regards the use of cookies. Their concern is that legally, at least in Europe you have to state somewhere on your website (IE in your privacy policy) that you use cookies to track visitor behavior. Google haven’t told anyone to do this currently, though this may change as their offering matures. However if you’re in Europe and your privacy statement tells visitors that you’re using a cookie to track them then you have nothing to worry about.

Another thing that has had some users complaining is the initial problems Google have had due to high demand. Google tried to give away too much too soon and the system can’t handle it, teething problems which I’m sure they’ll solve eventually. The final thing is that the data is not real time, it’s six hours old, but really you can’t expect everything for free. The legal issues are the only real problem to look out for in my opinion.

Legal matters aside&ldots;.

Google Analytics is the best thing to happen to the Internet marketing industry since pay per click was introduced. It really is that important and I’m telling you this for your own good. It’s free, feature rich, and it’s a powerful tool that means you have no reason not to start using web analytics. I’ve been banging the web analytics drum for ages and one of the biggest objections has been the price of the tools. Well that price just got as good as it can get. So what are you waiting for? Finally I have to add, respect to Google! Giving this away helps the industry tremendously, web analytics tools are necessary; finally we have a good free one.

Editors Comment
Since writing this article Google have responded to the legal concern raised. You may see their response by visiting this page. It shows that Google have actually addressed this issue in the same way as other vendors do.

This Search Engines article was written by Steve Jackson on 12/5/2005

Steve Jackson is the Editor of the Conversion Chronicles, a website conversion rate marketing newsletter dedicated to improving website conversion rates. He is also the CEO of Aboavista a web conversion and web analytics consultancy based in Finland and the USA. You can get a free copy of his e-book sent to you upon subscription to the Conversion Chronicles web site.