• by Mark Walsh  @markfwal, July 15, 2008

With more than two-thirds of companies satisfied with their Web analytics providers, competition will increasingly come down to pricing and flexibility rather than capabilities.

So says JupiterResearch in a new report on Web analytics firms that declares an end to the war over analytics features as customers focus on using existing tools to gain a broader picture of site activity.

"Despite some small skirmishes over capabilities like video and audio measurement, the Web analytics feature race is largely over," said John Lovett, senior analyst and lead author of the Jupiter study. Companies cited flexible reporting options as the most important factor they consider in choosing an analytics service.

That means they're increasingly demanding platforms with multiple methods of collecting data, unlimited ability to segment data, blended analysis and reporting on custom requests.

"Site operators and analytics clients alike informed JupiterResearch that data integration and the ability to stitch together a holistic view of customers' experience were primary areas of concern," states the report.

To that end, major analytics firms such as Omniture, WebTrends, and Coremetrics are integrating platforms that allow data to be passed directly from marketing applications such as e-mail, content management and search to analytics systems to generate a blended report.

Others, including Google and Omniture, are creating application program interfaces (APIs) for sharing data in various formats.

At the same time, the growth of free Web-based services such as Google Analytics has also increased pressure on industry players to deliver more bang for the buck. "The free versus paid Web analytics dilemma is on the minds of a great number of organizations," Lovett said. "Free tools can provide you the basics of Web analytics, but often fall short when it comes to integrating other data sources or analyzing data in non-standard ways."

While there's no neat dividing line between free and paid analytics services, "businesses that outgrow free solutions will seek advanced segmentation, custom reporting and integration capabilities with multiple data sources," he said.

For small and medium-sized businesses, free analytics tools can be an especially attractive option. Web analytics software from WebTrends, Google Analytics, IndexTools (acquired by Yahoo in April) and Lyris were rated the highest in that market.

Among large enterprises, Omniture, Unica, and Coremetrics had the top-rated solutions, according to the Jupiter study.