I’m also excited to be going to IMC because there are a ton of great speakers in the line up, folks like my old friend Xavier Casanova from Liveclicker, Gary Angel from Semphonic, Anil Batra (who just became a father, congrats Anil!) from ZeroDash1, and Tom Leung from Google who I have never seen speak but have heard good things about.

If you plan on being at IMC and would like to set aside some time to meet or catch up, please feel free to email me directly and we can plan a time.

• Before the event, Bill Gassman from Gartner commented to me “the more things change,  the more things stay the same.”  While the technology has become more sophisticated and the practitioner base (at least the sample represented at X Change which clearly skewed towards expert status) become more experienced, internal process and organizational challenges continue to dominate the conversation and negatively influence our ability to get the job done.
• For sophisticated companies, there are still many questions but far fewer answers.  Campaign attribution, data privacy, reconciling panel-based and census-based methodologies, data sharing and integration, and I’m sure hundreds more topics are on our minds but in many cases some critical connection cannot/has not been made
• Points #1 and #2 aside, some of us are doing amazing things with web data!  I was amazed at some of what I heard regarding how companies are evolving their use of web analytic data.  Despite the difficulty associated with many aspects of doing our jobs, some members of the larger web analytics community are definitely Competing on Web Analytics and will undoubtedly raise the bar higher and higher.
• All in all, the expert analytics community appears to be a pretty happy bunch.  Nobody was complaining about layoffs or lack-of-budget, at least not that I heard.  The complaints I did hear were typical: “our vendor promised this but has not delivered”, “we simply cannot find qualified people”, and “this stuff is a lot harder than some people make it out to be.”

We will be publishing a document in the next few months providing a much more detailed look at what was discussed at the X Change (watch my blog for details) but if any of you participated in the event and have other insights please feel free to leave them below in comments.

I am tremendously honored to be a partner in the X Change conference and look forward to helping produce the conference for years to come.  If you missed the event this year, don’t make the same mistake twice.  Keep watching my and Gary Angel’s blog for details about X Change 2009!

If you’re already registered for the event, don’t forget to return your huddle selection forms, your tete-a-tete requests, and the list of questions that you’d like to ask our distinguished analyst keynote panel!

If you’ve been considering the event, don’t delay: Register now and join us at the 2008 X Change!

For X Change conference attendees we’ve added a networking reception on Monday afternoon that will occur concurrent to the “Expert Tete-a-Tete” event already planned.  Gary Angel, the CTO of Semphonic and our partner in the X Change has a great write up in his blog about the tete-a-tete.   When conference participants are done chatting with the great expert vendors and consultants who will be in attendence they’ll be able to join their peers in a private networking event designed to promote additional idea sharing and communication over wine and cheese or similar goodies.

For those you in the Bay Area unable to join us at the X Change, June Dershewitz is throwing another gala Web Analytics Wednesday event in conjunction with the conference but that is open to all web analytics practitioners.  Last time we had a conference-associated WAW in San Francisco it was crazy with over 400 attendees.  Hopefully this time things will be a little more subdued … you can sign up to join us at the official Web Analytics Wednesday web site.

Hopefully I will see some of you reading my blog at one or the other of these events, or both!

“Jupiter’s employees are also going to benefit from the combination with Forrester. Forrester execs have enthusiastically expressed to me their respect for the quality of our staff and are eager for us to become part of the expanded company. Jupiter folks will reap the benefits of being part of a larger organization, with its rich resources, track record of effective execution, and commitment to employee growth and career development.”

Somewhat ironic that FORR has been actively looking for someone to cover web analytics since Megan Burns (who will be at the upcoming X Change conference) has transitioned to cover customer experience more broadly.  John Lovett, in my humble opinion, will make a great Forrester analyst and was almost certainly the best candidate for the job … <grin>not that Mr. Colony should have paid a $23M bonus to his current employer.</grin>

While I am excited for all involved, this combination of companies does raise one specific concern within the web analytics sector: Instead of three independent voices in the community providing an objective assessment of the competitive landscape that can be compared and contrasted over time, now there will be only two, Forrester’s view and Gartner’s view.

Don’t get me wrong, I have a tremendous respect for all involved here — otherwise I would never have advocated for inviting Megan, John, and Bill to keynote the upcoming X Change 2008 conference I’m a partner in.  But I do have some small concern that the market’s view of the vendor landscape will soon be defined by one fewer data points, especially since Gartner has not done a formal Magic Quadrant on the sector recently (although Bill did publish a market note on web analytics on July 3rd that I assume is available to Gartner clients.)

I suppose my fears may be unfounded, but given the unusual (and perhaps unreasonable) amount of weight vendors, consultants, and companies alike seem to put on these constellations, waves, and magic quadrants, the loss of one-third of the available information may have implications that won’t manifest for quite some time.  In the context of the consolidation our industry has gone through in the last 24 months, I think technology buyers are even more likely to look for that “objective” viewpoint and rely on published research.

Wait and see, I guess, but I have a few new questions to ask Megan, John, and Bill in a few weeks at the X Change!

Regardless, I’m excited for the folks at Forrester and JupiterResearch and sincerely hope the acquisition proves fruitful for all involved.

I first met John years ago while he was at IBM SurfAid and I was at WebSideStory.  I was privileged to work directly with John and his team while I was an analyst at JupiterResearch, as I am again privileged to work with John on occasion now that I have started my own company.  And while I have tremendous respect for Akin Arikan, Dennis Mortensen, and Mark Wachen based on my past interactions with each, I can think of few people who would add more value to the current WAA Board of Directors than John Payne.

John was gracious enough to answer a few questions I had about his candidacy and qualifications despite being on a well-deserved vacation in Alaska.

EP: Tell us briefly about your work in the web analytics industry?

JP: Well I am probably the one with the most tenure in web analytics … note I avoided saying the oldest, which is also true ;-) I co-founded IBM’s Web analytics solution (SurfAid) in 1996.  In that role I have been involved in all aspects of delivering web analytics.  I am intimately familiar with the data and the challenges associated with performing meaningful, actionable analysis.  I am currently responsible for Product Management at Coremetrics.

EP: Why are you running for the WAA Board of Directors?

JP: Because of my experience in working with the data and how to build a viable solution around this data, I bring a unique and seasoned perspective to WAA. I am at a point where I want to help the larger web analytics community become more productive and effective.

EP: What three things do you believe make you the one candidate to vote for in this election?

JP: I am hands on … I know the data, the challenges,  the level of effort required to make the reports meaningful.  While I have been doing this a long time, I also see a vision for how this can evolve in the future, to capabilities such as analytics across domains that result in targeted content and predictive modeling for more effective content delivery.  Thirdly, my experience will help guide WAA to deliverable that will hopefully have higher value to its members and the larger web analytics community.

EP:  How do you feel about term limits for WAA Board members?

JP: Term limits are a great idea because a regular infusion of new energy and talent will keep the WAA more vital and relevant.

EP: Some have accused the WAA of being somewhat close-minded and having a “not invented here” attitude, something that has the potential to negatively impact the community as a whole. Can you tell me if you encounter this how you might approach the problem?

JP: Each idea needs to be assessed on its own merit. I would encourage full review and dialogue of all new ideas before any rendered decision.

EP: What is your favorite thing about web analytics?

JP: I really enjoy “playing” with the data and “torturing it until it confesses!”  Really, web site visitor behavior does not lie, and I enjoy finding the story that causes the web marketing team to grim with excitement as they lay out a strategy and measure their success.

EP: What is your least favorite thing about web analytics?

JP: I am always disappointed by some portion of the community who just wants answers without being willing to “bond” with their data and the tools that they need top use.  I guess my disappointment stems from the fact that I enjoy doing “deep data dives” so much!

EP: Thanks a ton John, now back to your vacation and best of luck in the election!

Those of you in the WAA should have an email from the association titled “Re: WAA Board of Directors Special Election - Voting Period Now Open” with your ballot ID.  Hopefully all of you will take the time to vote in this special election and show your support for John, Akin, Dennis, Nicholas, or whichever candidate you choose.

VOTE NOW IN THE WAA SPECIAL ELECTION (you will need your ballot ID and to log in to the WAA extranet)

Learn more about OMS Portland and register to join us today!

Jim, for the three of you who don’t know him already, is an accomplished author, an internationally known public speaker, the founder of the hand’s-down most popular conference on web analytics and marketing optimization, and a co-founder of the Web Analytics Association.  And did I mention that he is without a doubt the nicest guy in the entire industry.

Yep.

Jim is one of my personal heroes and he has had a greater influence on my career than anyone I know.  Jim was among the first to learn I was leaving Visual Sciences for greener pastures and has provided me invaluable advice over the past year.  So imagine my glee when, after his inviting me to participate in his conference for six years, I was finally able to repay the favor by inviting Jim to join us at the 2008 X Change conference in San Francisco!

He accepted.  Ecstasy!

In preparation for the X Change event I have been interviewing some of the great people who will be joining us.  While those interviews are being shared with other bloggers, I decided to keep the Jim Sterne interview all to myself.  Read on and learn a little more about “the Godfather of Web Analytics” …

EP: For the three people who ** don’t ** know you, tell me a little about yourself and how you got involved in the web analytics industry?

JS: My first life was in sales - business computers to companies that had never used one before. This was pre-PC and they were expensive, confusing, and confounding. It was great fun explaining to people just what they could accomplish with one. I love watching people’s eyes light up. That led to a life in marketing - software development tools mostly. Print ads, brochures, trade show booths, direct mail. That was pre-PowerPoint so we produced overhead transparencies on a copy machine.

In 1993 I saw my first website (Sun Microsystems) and got wildly excited. I kept asking webmasters from large companies for examples of good online marketing strategy and they kept asking me for my opinion. My opinion ended up coming out in the form of books, PowerPoint presentations and corporate workshops.

In 2000, after presenting at Matt Cutler’s NetGenesis user group meetings and a couple of national tours, we decided a white paper was needed to explain this stuff from soup to nuts. That led to the book which led to the eMetrics Marketing Optimization Summit which led to the Web Analytics Association which…. Oh - you asked for a “little” about myself. Sorry - got carried away.

EP: Honestly, did you think that the Emetrics white paper you did with Matt Cutler would have the impact it did?

JS: I love being at the leading edge, banging the drum to get people to understand what’s just over the horizon. I wrote five books about online marketing but they were just part of the noise. I had no idea that E-Metrics Business Metrics For The New Economy would be the only thing out there for so long and attract such attention.

EP: What made you decide to start a conference for web analytics folks? Had you done conferences before that?

JS: I got most of my consulting business from public speaking but the conference industry was very slow in 2000 and 2001. This was the “Dot-Bomb” era after all, I decided to produce my own conference in the winter of 2001 but pushed it off until 2002 due to September 11. Web analytics was the most interesting subject to me and so few people were paying attention. It was something that needed a drum and a flag and a parade.

EP: Which of your books are you most proud of? What other author’s book do you wish you had written yourself?

JS: Nobody ever forgets the first time - even if it takes three editions to get it right. Being introduced as “author of” for the first time is a head rush that is only equaled by handing a copy of the first edition to my father. But the most fun I had was writing a little volume for Lyris - the email company - called Advanced Email Marketing. It’s a work of fiction about a guy hired into a bicycle company to get them into email marketing. He has to explain how the numbers are of value to each of the different managers and executives in the company. Good story, not much of a plot but there’s a happy ending with a twist.

Which other authors’ books do I wish I had written? The usual suspects spring to mind: Yours, Avinash’s, Jason and Shame’s, and anything on Amazon’s Top Ten list.

EP: Corry Prohens from IQ Workforce recently asked me about “the Eric Peterson brand.” How much do you work to manage the “Jim Sterne” brand?

JS: I believe branding is the result of everything you say and do. Think whatever you like, but every time you make a statement, an appearance, or a product you are expressing your brand to the world. Form is as important as function. The means are as important as the ends. Therefore the answer to your question is; All the time.

EP: Which of the Web Analytics Association’s accomplishments in the past few years are you most proud of?

JS: I am ridiculously proud of approximately 300 people who are actively working all around the world to create value for other WAA members. I helped raise the flag, but all these people are energetically and enthusiastically building something to help the next generation of web analysts. I posted a list of WAA accomplishments as a Letter from the Chairman but it’s really the fact that so many people are donating their time and talent to the cause that has me beaming.

EP: Tell me, when you’re not making things happen in the marketing optimization industry, what do you do to relax?

JS: I love to travel - sick I know, given the frequent flier miles I’ve racked up. I collect meerschaum pipes, play Mah Jongg, edit church sermons, design jewelry and monitor some 4,500 Komodo dragons in the wild through a network of webcams and RFID tags from my iPhone.

EP: If you could change ** one thing ** about web analytics, what would that be?

JS: The same thing I’ve been trying to change all along: Get everybody to recognize the astonishing power and value of this information for improving customer experience.

EP: Given that your “Emetrics: Business Metrics for the New Economy” really got the ball moving in 2000, where do you see the web analytics industry in 2010?

JS: There will be more consolidation as larger web analytics companies buy smaller ones, business intelligence companies acquire web analytics companies and smaller firms drop off the radar in the wake of free tools. Some new tools and methods will come about but the Big Problem will continue to be growing awareness, in order to increase investment, in order to train more analysts. The people problem will be with us for some time to come because you can’t automate insight.

EP: Speed round: Short answers to the following questions …

Favorite food? Popcorn
Favorite hotel? Santa Barbara Biltmore
Favorite book? Cryptonomicon by Bruce Sterling Neal Stephenson
Favorite non-web analytics public speaker? Randy Pausch
Favorite professional athlete? Willie Mays
Favorite airline? United
Favorite saying? “Eighty percent of success is showing up.” - Woody Allen coupled with “Genius is one percent inspiration and ninety-nine percent perspiration.” - Thomas Edison

I hope many of you will be able to join Jim and I at the 2008 X Change in San Francisco, August 17, 18, and 19th. Learn more about the conference at the official web site.

“When the only tool you have is a hammer, everything looks like a nail, and your living at the bittersweet motel.”

Bittersweet is an apt assessment when it comes to producing this type of research as an analyst: non-vendor clients love the insights, vendors hate the comparisons, and all-in-all the results often fail to shed any truly new light on the market.  John should be complimented because despite publishing two somewhat poorly-resolved constellations, his work makes a few incredibly important points about the state of the market today.

I know that Stephane and Anil have already discussed the report, and nobody really asked me, but here are a few of my thoughts on John’s work.

If I’m Omniture, I’m not very happy about this constellation

Despite hundreds of millions of dollars of investment — including the acquisition of three of the company’s former rivals (WebSideStory, Visual Sciences, Instadia) and the roll up of Offermatica and TouchClarity — in the large Enterprise John’s assessment has Omniture in a three-way tie for “first” with Unica and Coremetrics.  Compared to my assessment in 2004 and Greg Dowling’s work in 2006 (published by David Daniels in February ‘07), John’s work shows that Coremetrics and Unica are actually gaining ground on Omniture from a business value and market suitability perspective.

This is important because it reinforces both John’s central thesis and one of the most important caveats in all of web analytics: it’s not the tool that matters, it’s how you use it!  Omniture’s own consultants make this point when they remind us that we need to work hard to take advantage of the systems we already have in place, and the reality of the situation is that you’re not going to be any more successful with Omniture than any other application until you invest in people, process, and technology with a realistic and well-considered business strategy.

Don’t get me wrong, I think that Omniture has brilliant technology and are in a great position in the market today — if they manage to actually integrate analytics, testing, targeting, and bid management in a truly meaningful way they will solve a bunch of real-world problems.  But despite the hyperbole, hype, and braggidacio, Omniture’s competitors near universally have a similar opportunity and thusly I agree with Lovett’s asessment that there is no single market leader in web analytics today, Omniture or otherwise.

If I’m Coremetrics, I am pleased as punch!

Coremetrics is in a funny position in the web analytics market.  Despite all of their competitors declaring them “done” and “yesterday’s news” they continue to rank well in both the JupiterResearch ranking and the Forrester Wave.  Maybe the reason is that Coremetrics is actually still very competitive and able to provide the level of functionality and service that their clients are looking for at a competitive price.  Could that be it?

In fair disclosure, I do some work from time to time for Coremetrics and I really like their team, but given their recent deployment of Coremetrics Explore and the expansion of Coremetrics Connect, I think Lovett’s work validates the observation that the only real difference between Omniture and Coremetrics is their general approach towards marketing and sales, not their technology.

Furthermore, despite having been long considered a high-end solution with a substantial price tag, Coremetrics actually takes first place for overall business value in the SMB sector beating not only Omniture but also Google Analytics and IndexTools which are free!  I commented as much in the press release Coremetrics issued for this report, mostly because this type of market expansion is no mean feat given the quality of the competition.  And to be fair, Lovett’s business value dimension encompasses more than just cost and includes flexibility, scalability, usability, and feature sets.

If I’m WebTrends, I’m bummed out!

Living here in Portland, Oregon I am perhaps more acutely aware of the challenges facing WebTrends.  Last week they lost their CFO to another local firm, they already had to part ways with their VP of Client Services, Kory Kimball, who was only appointed in January of this year, and they are still looking for a replacement for Kathleen Brush who was brought in by Francisco Partners as an interim CMO.  Now, to be fair, these staffing issues are offset by the fact that they still have some pretty bright folks on the team, guys like Barry Parshall and Aaron Gray, but leadership in this marketplace has to come from the top and right now, the top is looking kind of thin.

My advice to Dan and the Board at WebTrends is basically this: get someone who knows web analytics inside and out in a senior position ASAP and get them out there talking about the company, products, and market in general.  On this point I disagree with my good friend Jeff who says that “business is business” and executives don’t necessarily have to be domain experts.  When I look at the market I see folks like John Pestana from Omniture, John Squire and John Payne at Coremetrics, Akin Arikan at Unica, Dennis Mortensen at IndexTools, Brett Crosby and even the great Avinash at Google out there evangelizing for both their products and the entire field of web analytics.

Call me old school, but I think the same key insight that it’s not the technology, it’s how you use it applies everywhere.  WebTrends is not going to be able to compete on a feature/function level because, according to John, the feature/function war is over and done.  The competitive differentiation is going to have to come from somewhere else … and historically that “somewhere else” has been guys like John Squire, Akin, Dennis, and Brett working their butts off to help people understand that despite web analytics being hard, great gains are possible when everyone is invested in being successful.

Surprise, surprise, I was right about IndexTools

When I broke the story about Yahoo! acquiring IndexTools and pointed out that most people who have seen both applications consider IndexTools to be every bit as good as Omniture, Omniture complained.  Brent Higgleke, their VP of Strategic Marketing, commented on Julien Coquet’s post about IndexTools:

“This move by Yahoo! was done to compete with Google. IndexTools does not compete “toe to toe” with Omniture. The majority of their customers are small businesses (80% of IndexTools customers are SMB according to CMS Watch.) This is great news for small businesses that use Yahoo advertising. However, mid-market and enterprise customers demand advanced functionality, deep domain expertise and specialized services.”

Sounds good Brent, except you’re basically wrong.  Don’t hate me, but I’m gonna recommend that people go with Lovett’s assessment instead:

“[IndexTools] provides a profoundly capable framework for advanced analysis and offers flexible segmentation built on the premise that segment creation is best facilitated through exploration of data.  Although currently available only through certified partners, the new free pricing model of IndexTools (a Yahoo! Service) makes it suitable for businesses of all sizes that seek a flexible interface and possess in-house staff looking for insights within data.”

The notion that IndexTools is somehow inappropriate for the large Enterprise, is feature poor, or is otherwise unworthy of consideration in an RFP process when available is just plain silly. John said as much in his blog post, commenting:

“It turns out that IndexTools does have nearly 80 percent of Omniture’s standard off-the-shelf functionality (77 percent to be exact).”

Now, I think we all wish that John would have published his list of “basic” and “advanced” features so we could better quantify the “missing 23%” in IndexTools.  My suspicion is that the gang at Yahoo! are pretty conscious of John’s assessment and working diligently on the next generation of IndexTools, much like the gang at Google did with Google Analytics.

So I will state again, Yahoo’s acquisition of IndexTools is a long-term game changer.  Yahoo! has still not given a time-line for making the application freely available to all, but an entire network of partners is already out there ramping companies up at a rumored rate of over 200 accounts per week!  Obviously if Yahoo! becomes so distracted with their current business problems and never releases IndexTools then my assessment will change, but everything I hear is that my Christmas 2008 prediction is more or less correct.

Despite proclamations otherwise, people still care about data accuracy

Avinash Kaushik is perhaps most loved for his exclamation, “The data quality sucks, get over it!” which to those of us tasked with explaining the unexplainable resonates like crazy.  The problem with “getting over it” is that those crazy wonks over in the business, and especially the gang in the corner offices, still want us to produce accurate reports that can be trusted over time.  If you’re not sure about this, go down the hall and tell your VP that the unique visitor counts you have been reporting all year may be off by as much as 30% in either direction, you’re not sure, and see what he or she says …

Uh huh.

Lovett’s report seems to validate that nobody is getting over it and that accuracy is still important, especially in the vendor selection process (number three factor, following “flexibity of reporting options” and “ability to service business needs”.)  I do disagree somewhat with John’s assessment regarding what to do about the problem, he seems to focus on the need for annotation capabilities in the product, but at the end of the day companies deploying web analytics solutions need to have defined business processes to account for tag coverage, data filtering, cookie deletion as well as a data collection validation process that is actually followed on an ongoing basis.

The next big battle will be about data integration

This is something that John and I have discussed on-and-off for some time, the idea that data integration capabilities are key as increasingly “internet marketing” is giving way to capital M “Marketing” (and, because of this, “web analytics” is likely to give way to capital A “Analytics.”)  In light of this observation, John seems to be predicting that web analytics vendors will continue to build out functionality to allow them to be more deeply integrated into the business, while at the same time the existing Enterprise analytics vendors will enter the digital market via acquisition.

Hmm.

I think the problem with this is that these strategies have largely been tried and, for the most part, have failed to produce expected results.  John predicts that web analytics vendors will build or acquire content management and relevance engines, which we have already seen with WebSideStory’s original acquisition of Atomz which included the Atomz Publish platform (among other examples, mostly CMS vendors building out analytics capabilities but Interwoven’s acquisition of Optimost is tangentially relevant I suppose.)  Same for Omniture’s acquisition of Offermatica and TouchClarity.

Now I suppose it’s too soon to say if Omniture will succeed with “Test and Target” but there is no case to be made for WebSideStory + Atomz Publish being successful.  Perhaps this was a problem of execution, but I rather believe that most true Enterprise shops either A) already have CMS in place or B) are unlikely to purchase CMS from a web analytics vendor given the otherwise complicated-but-entrenched landscape.  It does look like Omniture is still supporting Publish so perhaps they will get traction that WebSideStory did not.  Still, I’m not going to hold my breath, especially given the recent upgrades that Lyris has launched around their Lyris HQ product and the integration of ClickTracks, mostly targeted at the same SMB market and available at a tiny fraction of the Omniture’s price.

Similarly, the big Enterprise software players have all had the opportunity to invest in web analytics for years now and none have taken the plunge.  Oracle and others were widely known to be looking at the sector but the only thing that came of all that was A) Microsoft buying DeepMetrix (nee Gatineau nee AdCenter Analytics) and B) Oracle buying Moniforce which I’m not sure really counts.  In the meantime, SPSS has stopped supporting NetGenesis as of February 28th of this year and only SAS and Unica are still out there looking at deeper Enterprise integrations as far as I can tell.

Now, I have my own thoughts about the future of data integration and how web analytics will be levearged in business, but hopefully you’ll come see me talk at IMC 2008 in Vancouver when I talk about “Competing on Web Analytics” and hear what I have to say in person.

What, are you still reading this post?

In summary, for the three of you still reading this exceptionally long post, I think John has written a great report on the state of the industry and the vendor landscape.  Every JupiterResearch client reading this blog should read it and give John a call to discuss.  Or, you could come to the X Change conference in San Francisco and talk to John in person, or you could come see both of us at Shop.ORG in September and watch us fight like cats and dogs about which one of us is right about data integration.  Up to you.

As an example of the kind of content published at YouTube, here is my good friend and Web Analytics Assocation Board member June Dershewitz and some of her thoughts about the conference. Cool, huh?

There are 15 different videos at YouTube from brilliant folks like Anil Batra, Dan Shields, Manoj Jassra, Marshall Sponder, June, Phil Kemelor, Gary Angel, and even yours truly who has never been known to shy away from the camera (although perhaps I should have that day, what the heck was up with my hair!)

Don’t know what the X Change is? Read all about it at the official conference web site.