Coffee, Sun & Technology

I was thinking the other day about my quick stop at the eMetrics Summit in Santa Barbara, talking to former competitors, customers, etc. The Web analytics space is hot, customers are engaged, consultants busy, vendors optimistic - this is a healthy “industry”, no question. I do however think that the intense competition between the top vendors has somewhat killed product innovation. And it’s only now, 6-months into Perenety, that I am realizing that the next generation Internet - what some call Web 2.0 - needs a totally different kind of Web analytics. Let me explain.

Most analytical products available today have been designed in 2001-2002, when there was a strong need to measure marketing campaign ROI, after the dot-com bubble burst. I would even go further and say the only thing that mattered at the time was measuring Google Adwords and Overture (for 90% of customers at least), because Search Engine Marketing was the only marketing program that really worked and could be justified in those recession years. It’s interesting to remember that Webtrends at the time was an easy target for the newest vendors, primarily because they missed the SEM turn (they’ve nicely recovered since then). It’s also interesting that Omniture, which can be considered to be the current market leader, reinvented itself right at that time - repositioning itself, redesigning its product and aggressively targeting large content sites (automotive, publishing, corporate).

Since 2002, leading vendors have been adding powerful capabilities to analyze behavior on the site, nicely complementing the marketing analysis capabilities - and adding consulting brains to help customers understand the reports. And since 99% of customers typically use no more than 10% of the reports available to them, it is not too surprising to see vendors focusing on helping customers better use their product, as opposed to creating more features that will likely not get used. In other words, the Web analytics market is becoming a consulting business.

Web 1.0 analytics: [Marketing campaign] –> [Landing page] –> [Path on site] –> [Checkout sequence] –> $

Now some major changes are happening online - which are going to make the current analytics products look like Webtrends in 2002. These changes (RSS, Social Networks, blogging, etc…) are affecting even transforming e-commerce because more purchasing decisions are made outside of their site, on a forum, a comparison shopping site, or a blog - places where the marketer has no visibity and no control. Moreover, it is becoming increasingly difficult to effectively manage customer loyalty programs online because (a) customers are harder to reach via traditional tools like email, and (b) repeat customers and visitors are harder to track since they may connect from multiple devices and sometimes (up to 30% according to Jupiter Research) block cookies.

For all these reasons, it seems natural that marketers will need more effective ways to monitor what’s happening outside of their site - as well as tools to fight for customers before they even decide which product or service they really need. In my humble opinion, the two important variables here to be monitored are buzz and pricing. Product buzz determines which product you want to buy (for instance the Casio Exilim 7.2 Megapixels camera), pricing where to buy it from (for instance NewEgg). The site’s conversion efficiency then determines if customer Jane landing on NewEgg to buy the Casio Exilim camera will buy there or not.

Web 2.0 Analytics: [Buzz] –> [Traffic broker: Google, Pricegrabber, etc] — > [Site] –> $

I have no stat to share (sorry), but it seems to me that the amount of free, uncontrolled buzz has skyrocketed over the last 2-3 years. I’m also under the impression that pricing continues to be the most important factor when selecting retailer X over retailer Y. So instead of trying to lift conversion rates from 2% to 2.1% on the site by changing the color of the “Buy now” button, why not:

(1) Monitor buzz (measure online presence on blogs, forums, product reviews), against the competition
(2) Monitor pricing across major “traffic brokers”, against the competition
(3) Nicely integrate this into traditional analytics reports - and, as always,
(4) Act on the reports.

Easier said than done, but think about it…

11,000+ users/day click on “Forgot my password” on Meebo according to Elaine:

Our intuition is often off. Two releases ago, we considered eliminating the “New user?” and “Forgot your password?” links on the front meebo login page. Before doing so, we decided to track how many users clicked on the links. Good thing we didn’t eliminate them - turns out that 11,000+ meebo users depend upon these links daily!

Pretty interesting post on how the Meebo team uses analytics. Web 2.0 is a lot more analytical than Web 1.0.

I keep comparing Perenety to Fireclick, it’s almost an obsession for me to try to avoid the mistakes we’ve made or to copy things that worked really well.

In the early Fireclick days (1999-2000) we had a ping pong table in our board room, where we played at least 3 or 4 times a week. It was fun - a great way to unplug for a few minutes, and build some camaraderie. I’m sure every Fireclicker (Ram, Steve, Todd, Seb, Steph, Walt…) remembers what “full attack” meant - playing all your shots at 100%, taking all risks… [I’m smiling as I’m writing this…] - rather than playing a slow and relatively controlled game. Seven years later, I only remember the full-attack games, and I still laugh about them. Like the Steph/Ram vs Steve/Xavier where we played 3 full sets and we won the last one 22-20 or something like that.

We stopped playing ping-pong when we reached the 18-20 employee mark. After that, most fun activities were happening outside of the office. At Steve’s place, at Dave and Busters, or at One Broadway in Los Gatos. It was still nice but a little different - our share of fun had to be planned and organized.

It’s May already and I am proud with what we’ve accomplished here at Perenety. We’re a few days from our public alpha, with the strongest team, market strategy, product, and technology I could ever dream off. But when I go home at night I don’t think in those terms. I think about how early I can get to the office the next morning: 7:30? 7 maybe? And as I reflect upon why we’re so dedicated to Perenety, ALL of us employees and founders, I keep going back to the ping-pong anecdote: we just can’t wait to go play at Perenety - be around with team, brainstorm on new ideas, meet great people, see the little spark in our customers’ eyes… This is our new ping-pong game, a game I’ve been dying to play again for so long.