My 5 predictions (and hopes) for web analytics in 2011

I don’t quite know how to bottle up the excitement that is brewing around web analytics at the end of this year. I’ve never seen something quite like this in our industry. The number of people looking to fill good analytics jobs is the highest I’ve ever experienced. The number of people in the industry who really get the big picture is starting to really become noticeable. 2011 really is going to be an incredible year.

But we are not without hurdles. The greater market doesn’t know what analytics is, really, and the idea they do have is a pretty bleak one for our collective future. They know they need it, they are excited to have it, they know their competitors do it, but they really don’t know what it is. The huge consulting firms are coming in and talking about how important it is, but they, too, don’t really know what it is. And the big problem is that we don’t really know what it is, either. The things we stress about this work are often the wrong things. We need to fix that so that we get this new level of appetite off on the right foot.

With that foundation laid, here are my predictions and hopes for analytics in 2011.

1: We will find out that we are not ready for our seat at the table (but we almost are)

We have been talking for years about getting a seat at the table. The truth is we’re really not ready for it. We are like the Jamaican bobsled team: we’re going to get invited to the Olympics, but we are going to fail gloriously while the real pros watch with a sort of proud sympathy. But I’m not saying we aren’t smart enough or good enough. We just aren’t ready. The good news is that we are close. Really close.

Our #1 challenge in taking advantage of the seat once we have it will be in the language we use and the order in which we relay information. By and large, we stick to our industry knowledge and vocabulary, and we lead with evidence before we get to the point, reiterating the process we go through in our analysis. In the boardroom, though, the language is about resource allocation and return, and you need to place your bets before you show your cards. Instead of starting with the data that led you down a rabbit hole that showed you a way to increase repeat or cross sales (they will be giving you a harsh “Get to the point” look), you need to start with a simple statement about resource allocation and return: “I believe that a $650,000 investment in improving our checkout process will lead to a $56,000,000 return. This is a [conservative / aggressive / moderate (pick one)] estimate, based on current consumer behavior, and I believe we could begin seeing results in as soon as 120 days. If you’re interested, I can share some background information on how I got these numbers.”

Then you shut up. If they ask you for detail, begin peeling back the layers of the onion. Try to keep it about resources, people, money, and time, moving slowly to your quiver of web metrics as more depth is requested. Remember that the best analysts in the world simply say buy, sell or hold. They don’t need to show how smart they are and risk confusing their audience. Make your message simple. Your goal at “the table” is to be an invaluable resource to help them make decisions. Puking data at them makes decisions harder. Keeping it simple (but having a lot of depth ready for when they ask) makes their lives easier, and it makes you a fixture.

2: Analytics will no longer be about measurement

This is one of the biggest cases of us shooting ourselves in the foot, and it’s something we can fix quickly. Right now, the industry places far too much value on the measurement side of our work, especially compared to the output side. In fact, measurement is often confused with, or worse yet called, output, and many of the vendors and tool providers sell against this concept: a dashboard that tells you how to run you media, a tool that tells you what people are telling you to change on your web site to improve experience, etc. But tools enable things, they don’t execute. It’s time to start talking about what you do, and the value you create on top of the measurement. Eventually, the measurement will be next to meaningless in the course of conversation about analysis. Of course, it’ll be important in practice (critical, even), but our focus on it will be very small because, frankly, the rest of the world doesn’t give a shit.

Measurement is just one of the three key points of analytics, and probably accounts for about 5-10% of its total value, if you asked me to put a number on it. The next key point is improved web and offline strategy in the form of good ideas that come out of measurement, and this probably accounts for about another 25-35% of upside or potential value of analytics. Focus a great deal more on that, starting immediately. People will no longer ask you for the information they will use to make decsions. They’ll instead ask you for your opinion.

The third key point of analytics is improving the operations of the business, and this should be the legacy of the department,accounting for 70% of the value this department can create. The analytics department is one of the only departments in the company capable of offering an unbiased assessment of how the cross-functional teams work together (or against each other) when working on the site or in other areas. Get involved in that conversation as soon as possible, because the greatest barrier to your company’s success is not the problems with your web site; it’s the operational disease that is resulting in those symptoms.

Tactically speaking, let’s start 2011 with a new hashtag, for one thing. #measure has to go. Now. Please post ideas for a better one in the comments, and I’ll be sure to run it up the flagpole at the WAA. Let’s change what we tell the world we do.

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

Right now, the average tool provider is telling your CMO that their tool helps companies make better business decisions. This is pretty close to a lie, and it’s a result of crappy analysts. The average CMO (and much more importantly, CEO or COO) doesn’t look at the analytics team as a group of people that help them make better decisions any more than they look at their can opener as something that makes their tuna taste better. So, naturally, they look elsewhere for this business insight, and the tools are more than happy to make that claim.

We need look no further than Michael Bloomberg for inspiration on how to handle this issue. Bloomberg sold financial institutions machines and software that would enable analysts to make better, more justifiable, and quicker decisions about investments. The machines were sold as a competitive differentiator, and not only did they make a huge difference in the ability to identify good investments, but they also shortened the time it takes to identify a good investment to a fraction of the time it took beforehand. So analysts were making better decisions more quickly, and exponentially increasing the amount of value they could create by allocating capital (and recommending others to do the same).

We have a very similar set of circumstances in our industry, but we are not translating our Bloomberg data into insight that drives decision making at the highest levels. We are doing a good job of using data to make changes on the web site, but when is the last time an analysis of yours was presented at a shareholder meeting?

Also, Bloomberg didn’t need the ego boost of telling fund managers that the Bloomberg machine would make them more money. He recognized that the analysts did that. He simply told them that a fund using this machine would have a huge competitive advantage because of how amazing it enables analysts to be. And he personally made billions by selling enablement, rather than replacement, of people.

Closing this gap in analytics means that we need to do #1, and quit with the measure business. Then, the company will see the value we create, and will invest in tools that enable analysts to be even more amazing. But #1 has to come first. That’s on us.

4: Analytics will separate from its association with other teams

Most companies can’t figure out where in the hell analytics belongs. That’s because they are unwilling to change a structure that “works.”

Have we really even asked ourselves honestly where the web belongs? The CMO is not the person for this. Most CMOs today are really closer to Chief Advertising Officers (slash punching bags on the hook for practically everything), and the web really isn’t an advertising venture in totality, although parts of it certainly are. The web is a heavily operations-focused venture with a complex set of teams and processes that really don’t make much sense to the average CMO, especially when compared to the rest of their job.

The whole concept of modern corporate structure has really only existed since World War II, so about 70 years. And the Internet has existed for nearly 20 of those 70 years, yet we refuse to create a new home for it. We are essentially trying to define the Internet using a dictionary from 1945, and I can tell you one thing: it’s not working.

So, I’m not suggesting that we all get our lanterns and pitchforks and crusade against corporate structure, but let’s do some thinking in 2011 about how to be successful. Part of that success leans on the analytics department being able to be unbiased, and that means separating it from marketing, product, IT, sales, or any other department, giving it some room to look objectively at the workflows that span these various teams to help the company make good, holistic decisions.

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

Well, I suppose this is sort of a, “no duh,” statement, but the media just might assimilate enough knowledge about tracking this year to put a real story together and create an Inconvenient Truth campaign against online data collection. To prepare for this, we have to remove ourselves as stakeholders and people who derive their living from this data. For one thing, we can still do plenty without a lot of it. Yes, your job will still exist. The good old days will be gone, but you know enough to still make a difference.

But forgetting a doomsday outcome for a moment (which I really don’t see happening), we need to have an objective view from which to speak. The problem with this data collection, in consumers’ eyes, is the fact that it is apparently being used to exploit them somehow. But that’s not why we, as analysts, gather data. While some of the businesses that pay us may wish to exploit consumers in some way (if I’m being dramatic), as analysts, we are active consumer advocates. Our data doesn’t show us anything other than what people were trying to achieve, where they were trying to go, what they were trying to do. Our interpretation of this information gives us a clearer picture of how to serve that consumer’s needs, and nothing else. From that point forward, we begin to marry their behavior with our business goals to architect a solution that produces profitable revenue (a concept we need to think more about: revenue on its own is not inherently good – revenue always has a cost). But the majority of our process as analysts is consumer-focused. We aim to understand them.

So, when we are approached by the media or as we approach them, we need to take care to not come from a position of self-preservation or corporate interest but instead talk about how we use information to improve consumer experience, just like any physical business who cares about their customers would. Zappos couldn’t do what they do without data. Apple couldn’t make better iPods without data. We are trying to understand consumers and make their experience with our brand just a little better.

But being the referee means that we will have to call some people out. There are some bad tools out there gathering more data than consumers are comfortable with, and they are dragging the industry down. To truly be the ref, we need to police the data collection in our industry and have a public forum for approval and disapproval of technologies, businesses, and practitioners. The code of ethics is a great start, and we can use it as a badge of approval, much like the energyStar sticker you get on your washing machine. It’s a small step, but it’s a step in the right direction of earning consumer trust by enforcing standards in our industry.

So.

I’m pretty damn excited about this year. Let’s pick up those torches and pitchforks after all and get things right. Let’s make 2011 an epic and pivotal year for this industry. I want to have eMetrics at the Four Seasons and see you guys on MSNBC. Let’s make it happen.

And what do you think? What are your predictions?


15 Trackbacks

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5 Comments

  1. I am sorry, all predictions must contain some sort of industry merger gossip. Please address this in your post as soon as possible. 😉

    But seriously, I like this post a lot. It is past time we collectively realized that “greatest web analytics ever” comes from People, Process and Technology, and not just technology.

    Posted December 13, 2010 at 5:59 pm | Permalink
  2. Haha, I predict that Kissmetrics will buy Adobe. There, I said it!

    Posted December 13, 2010 at 6:08 pm | Permalink
  3. Great points about how to speak once at “the table”. Don’t speak in a foreign language or people will just think you are showing off, will ignore you and ask for the report before kindly showing you the door. Start with the money, gather the interest and give details on an as-needed / as-wanted basis.

    Posted January 5, 2011 at 4:42 pm | Permalink
  4. Great information. If it’s okay with you, I’d like to post a link in my blog and hub.

    Posted August 5, 2011 at 2:39 am | Permalink
  5. I was curious if you ever considered changing the layout of your blog?

    Its very well written; I love what youve got to say. But maybe you could a little more in the way of content so people could connect with it better.

    Youve got an awful lot of text for only having 1 or 2 pictures.

    Maybe you could space it out better?

    Posted January 4, 2013 at 8:32 pm | Permalink