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Marketers and ad agencies moving campaigns online that want to tie new media with traditional media such as TV, radio and print have, in part, prompted the uptick. U.S. companies will spend about $421 million this year to install, license, and contract for support and services -- climbing to $953 million in 2014, according to the "US Web Analytics Forecast, 2008 to 2014" report.
Forrester Research Senior Analyst John Lovett believes the industry has begun to get its footing, but maturity is still distant. Growth will emerge from unexpected places and become part of an array of integrated services supporting marketers. Web analytics can help companies identify profitable initiatives, prioritize marketing activities and focus on best campaigns. The macroeconomic conditions have forced the change.
Measuring social media has become important. Conversations about brands happen across the Web and not just on the company's Web site, so the ability to measure offsite activity has become important, Lovett says. "The sophisticated users rely on their Web data to become more relevant to customers," he says. "Rather than just send out marketing messages in a shotgun approach and trying to fill up the call center with leads, they look at the Web analytic data to identify customers at a certain stage in a product lifecycle."
By doing a little research on the back end to gather the data, it allows marketers to approach customers with specific messages that fit buying cycles, rather than approach them with a generic message they may disregard.
Thirty-eight percent of the total forecast revenue is generated from a mere 6% of businesses that operate Web sites, attracting 2 million or more unique monthly visitors. The remaining 62% of the total forecast revenue comes from the majority of sites generating less traffic, between 500,000 to 2 million unique visitors monthly. "They are using Web analytics to identify behavior, and then target their marketing based on that intelligence," Lovett says.
More small- to-mid-size companies will begin to adopt Web analytics this year. That's where he sees the most growth. Tools will become more "user friendly and drive action from the data." The industry will change from reporting to action, actually feeding data into campaigns to drive change and improvements.
Some large sites, with monthly traffic exceeding 10 million unique visitors, spend more than $200,000 annually on Web analytics. Industry averages hover around $15,000 per year for hosted services. The big spenders on hosted Web analytics represent less than 2%, with the majority of sites in the smaller traffic categories.
Lovett estimates that 73% of businesses use or pilot Web analytics technologies. Yet the reality is that not all pay for services rendered. Data from the Web Analytics Solution Profiler (WASP), a service that detects analytics solutions installed on Web sites, projects that market penetration for Web analytics is roughly 58%. WASP also estimates that 78% of total market share is currently held by free vendor solutions, according to Forrester.
Among sites that have installations of fee-based Web analytics tools, 37% also have free tracking products installed, thereby duplicating their measurement efforts. Forrester identified three key themes that could limit Web analytics success, including data turns into a commodity and Web analytics transforms into mere tools, human resources required to analyze data and convert information remains limited, and industry growth becomes stunted by increasingly complex challenges.
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You left one pitfall off the "hurdles and pitfalls" chart. Web analytics - or more correctly "site analytics" - measure traffic. If your goal is traffic and / or traffic optimisation that is fantastic. If your goal is to measure people, then be very careful with terms like "unique visits" and "unique browsers" as they are in the main "unique cookies' - which again, is fantastic if your target is cookies and not people.