• by December 19, 2000

A recent Gantry Group study of the Media Metrix Top 50 Web sites indicates that in the largest e-businesses, Web traffic is overwhelming the knowledge management systems that direct core marketing programs. The majority of those surveyed said the explosion of Internet traffic would likely overwhelm their systems within the next 12 months.

Nearly all participants also indicated that data analysis can dramatically improve the effectiveness of their sites as measured by customer retention and customer lifetime value -- by as much as 50 to 100% in some cases. Central to this issue is the ability to scale rapidly to accommodate growth of Web traffic and the ability to perform meaningful analysis beyond the analysis tools currently available commercially.

The results of the study also suggest that for these systems to extract valuable and comprehensive marketing information, click-stream data must be integrated with terabytes of offline transaction and demographic data.

The Gantry Group study highlighted a variety of interesting findings including:

* 40% of those surveyed said existing click-stream analysis and marketing recommendation systems are insufficient to support their corporate marketing goals;

* 60% believe their systems will not be able to support business goals and growth beyond 12 months;

* Slightly more than half the sites survey said they receive more than 20 gigabytes of data daily;

* More than half of those surveyed also said they expect the volume of Web data flowing through their sites will more than double over the next 12 months.

"E-businesses are collecting unprecedented volumes of click-stream data to assess site usability, predict buying patterns and evaluate content, but according to our survey most companies are just accumulating the data in the hopes that someday there will be effective analysis tools that will render it valuable," said Dawna Paton, partner at the Gantry Group. "Our study confirms the need for an end-to-end solution that offers end users speed, scalability, data integration and, most importantly, actionable insight into companies' customer databases."

The Clickstream Data Usage study consisted of 25 interview-style surveys of CTOs, vice presidents of marketing and data analysis executives in the Media Metrix Top 50 Web sites. Additional data was derived from a follow-on research program consisting of two focus groups of marketing vice presidents or directors, to explore issues raised from the survey in greater depth.