My 2 predictions (and hopes) for analytics in 2012

Last year around this time, I did a post outlining some predictions and hopes for analytics in 2011. It’s a good thing I am okay with making a fool out of myself. Regularly. Like, with amazingly high frequency and dependability.

Here’s how last year’s predictions and hopes turned out:

1: We will find out we aren’t ready for our seat at the table (but we almost are)

Like a big fat jerk, I compared us to the Jamaican bobsled team. That we can show up at the executive roundtable, but we aren’t really ready to compete at that level.

Do I think I was wrong? Maybe not. Do I think we made progress? Definitely. Do we still have room for improvement? Also definitely.

Analytics is already seeing more than just a sliver of dawn light. We are coming into a more fully-illuminated state, and Sterne’s netting of great speakers and real world success stories demonstrates that. Our ability to see analysts who have graduated into central, executive roles demonstrates this maturation. We are getting there. And it’s accelerating.

Many analysts in 2012 will be faced with a decision of whether they want to ride the bigger waves, as they begin to appear. They are riskier. You are more likely to face plant or even drown, but if you can ride these bigger waves successfully, you get more exposure and the mobility to get your ideas (and your title) to places where your abilities will make heads spin.

2: Analytics will no longer be about measurement

I tried to find a picture of a dead horse that wasn’t offensive. I couldn’t.

Let’s not dwell on this: we use measurement to generate ideas to put into practice to drive real world outcomes. It’s our own decision whether we open conversations with the word “outcomes” and work backwards, or open with “measure” and try to work toward outcomes. You all know how I feel about this one, so we can just move on.

3: Vendors will stop selling “insight” and begin selling enablement and competitive differentiation

Ha, well I was on vacation looking at a snow-covered mountain when I wrote this last year. The world seemed so right. So much promise. And I was heavily dosed on crazy pills.

The point of this is to say YOU are the one with the insight. Remember that. The tools will never stop claiming they generate ROI, insight, cure sickness, and bake bread.

They do not bake bread.

Vendors will continue to sell in a way that works. It’s up to us to sell ourselves even better. We are what makes the technology work. Not the other way around.

4: Analytics will separate from its association with other teams

I think we’re really getting there with this one. We are less IT, less marketing, less product, less x, more us. The less we align with any one arm or discipline, the more we are able to be real analysts, weighing our various options and competing priorities to come up with holistic, realistic options for our company to invest in. Thoughts?

5: Privacy concerns will come to a head in the media and we need to address it well, as the referee

This wasn’t as sensational as I had dreamed up. There was a low simmer, but nothing that broke out into rioting in the streets and knee-jerk legislation.

The EU is preparing tin foil hats for all of its residents with some business-crushing upcoming laws around first party cookies and data capture opt-in. The good old US of A will lag a long way behind because of our powerful lobby, and that’s where we need to be smart. It’s very important for our businesses to be able to articulate the value of analytics in terms of how data is used to improve customer experience and marry that to real outcomes in terms of both consumer satisfaction and business outcomes.

Brands that people respect can do a lot of good for our industry: if TOMS shoes can show how web analytics led to more sales, more donations, happier customers, more activity in the social space that boosts awareness, nobody’s going to start thinking TOMS is creepy. It’s time to paint what we do in terms of the good it does and be proud of it, rather than trying to hedge the assumption that evil companies are using data to do evil things (which they are).

Consumers need to see both sides, so just like everything else, they realize that good people do good things with analytics and bad people may do bad things; but analytics itself is not the bad thing.

Our success in protecting what we do and how we do it will not come from our direct interaction with the government. It will come through educating the executive suite on the value this presents (and threat that losing it represents), and allowing the guys who talk to the media, stock analysts, and the lobby take care of it for us.


So, that was last year. How about this year?

My wishes for this year are a little simpler and conveniently less quantifiable. I’d love to hear your thoughts on how you already do these things, whether you think these represent a bad or unrealistic approach, or whatever other feedback you have.

1. Analysts need to stop talking about savings

No business on earth is saving for retirement. No business wants to move to the beach or the mountains, live a comfortable life, pay for its grandchildren to go to a good college. No business really cares about savings. Businesses care about spending to grow.

The concept of the capital markets, and funding in general, is all about growth. Most companies are physically worth only a small fraction of their market capitalization. All of the extra money is there for growth. When companies have an IPO, get venture funding, or even get a loan from the bank, that surge of cash is used to fund an accelerated pace of innovation, production, sales, etc. Money is used to buy hard capital (machines, buildings, trucks, copiers, etc.) that will fuel growth, it is used to pay higher salaries for smarter, more innovative people, and more of them, it is used to advertise, and more.

Companies want to spend, not save. Spending is what makes money come in the door. The only reason that money is coming in today is because spending happened yesterday, last month, last year, or 5 years ago. It led up to this moment.

When a business “saves” money and doesn’t put that money to better use somewhere else, that money just sits as cash, which provides little to no return to the business (unless it’s being saved for a large event like an acquisition, etc., or there really are zero viable places to spend). There may indeed be a few scenarios where saving is the only option, but what really matters is more effective capital allocation.

So, let’s stop talking about saving and start talking about reallocating. And in a big picture sense, too. Don’t limit your reallocation thinking to the web site, your digital marketing, or even digital itself. If you find $20 million of “wasted” paid search budget, go to the top and figure out where, anywhere in the organization, a $20 million investment will have the greatest return. Put your money back on the table and keep playing. Saving is quitting.

2. Get businesses to take “I didn’t know we had that” out of their vocabulary

How many times have you been in a meeting where people were recapping a bad decision and someone brought up the fact that there was substantial data, market research, or other evidence that could have helped the business make a better decision, only to hear one or more people say, “Well, if I knew we had that information, I would have used it!”?

Once is too many times.

People, especially in larger organizations, ask for what they think is available. In fact, they may not even reveal their true need, and their request is for specific reports or slices of information they know the organization has on hand:

  • “I need a report of traffic source ROI by month and callouts on strategy/tactical shifts on the chart.”
  • “I need to know the average time from the first time a visitor comes to us until they purchase, by campaign.”
  • “I need a report that shows us which keywords drove the most pageviews in the first quarter.”

Each of these requests is really about something else. Someone is trying to spend their marketing budget more effectively, understand how long after tactical shifts the business will have to wait to see impact, or see how effective their past efforts have been. Each report request is something the requester already knows exists, and it allows for little creativity, analysis, or true assistance with their core effort or goal.

In a perfect world, though, we would hear this:

“What information can we drum up that will help me make decision XYZ?

When people state the nature of their need and simply ask what is available, our role transforms radically. We understand their true need and can bring a creative mix of data, qualitative and quantitative, to evaluate and influence the decision, either making it more quickly or better.

Easy enough?

This second one is more of a hope than a prediction, but knowing the people in this industry, nothing surprises me any more. There are some truly talented and determined people in analytics, and it’s going to be another great year for us.


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5 Comments

  1. I think two components of predication(/hope) #2 are –
    a) Analytics needs to become truly integrated with the rest of the business – if we are off in our own bunker, of course others in the business won’t know what data we have and how we use it. While it’s great for Analytics to be its own department (rather than sandwiched into IT, Marketing etc) it can’t be a black box.
    b) Different areas of the business need to communicate better. Too often the left hand doesn’t know what the right hand is doing, and Group A doesn’t know that Group B has X data that could bring it all together.

    I think my other hope would be that “web” analysts start thinking outside the web. (And not just in the “we know we should, but we still haven’t gotten around to it” kind of way.) If we can see data as just data, and decide whether it will help us solve a business problem (regardless of where it comes from) it will help us provide more value.

    Posted December 27, 2011 at 4:46 pm | Permalink
  2. Michele,

    I think you are spot on with that last point. Business problems are larger than just a website. In many cases, the reason websites are designed and funciton a certain way is the result of business rules (good and bad). Changing and improving a website can lead to findings that extend far beyond the site itself. “Web” analytsts uncover plenty of opportunities to make businesses a whole lot of money off-line, and they shouldn’t be afraid (I’m not sure if they are or are not) to show how big of an impact their work can make on the whole business.

    -Jordan

    Posted December 27, 2011 at 5:41 pm | Permalink
  3. Good stuff Evan.
    I particularly love your point about savings. Businesses, organizations and associations that are innovating today are investing for growth. And they’re using data to make those investments wisely. That’s progress.

    Posted December 29, 2011 at 12:29 am | Permalink
  4. Evan – I think we agree in principle but not in semantics. Do analysts need to stop talking about savings? Not at all – because it’s not saving vs. reallocating, it’s saving IN ORDER TO reallocate. So your conclusion is right on.

    Yes, “I didn’t know we had that” is a killer and the solution is two-fold. First, analysts need to market their services inside the company. Let it be known that you are an available resource. Brown bag lunches, internal seminars, newsletters – whatever it takes.

    The next step is to train those around you to stop getting drunk:
    An unsophisticated forecaster uses statistics as a drunken man uses
    lamp-posts – for support rather than for illumination.
    Andrew Lang

    Get people to ask you for recommendations instead of a report that proves their point. Get them to include you at the beginning during brainstorming rather than the save-my-project scramble at the end.

    Conclusion: We are in violent agreement!

    Posted December 29, 2011 at 7:10 pm | Permalink
  5. Thanks, Jim!

    I guess my point was saying that if “saving” is just a mile marker on the way to reinvestment or reallocation, we may be more successful leaving the “saving” word out entirely. E.g., not making it a goal, but a mechanism. Almost the exact feeling I have around “measure.” Yes, we do it, but that’s never the point itself. Analysts help you reallocate — not save — to realize the greatest return (just like Wall Street, but without the rampant corruption!), and they help you learn how to make better decisions more quickly, not measure.

    I suppose there is really no harm in talking about the intermediate steps, but what I’m assuming is if we state a goal, the tacit steps on the way can be assumed, rather than explicit.

    I love what you are saying about saying “YOU are a resource.” Not the tools you have access to: yes, the tools and data are also a resource, but ultimately by that information flowing through the analyst, it gains context and value while losing noise and confusion.

    While I’d usually say violence is never the answer, here, it seems to be!

    Posted December 29, 2011 at 8:51 pm | Permalink