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Market Trends - Web Analytics:  Three Trends for 2004

An increasingly mature market and set of technologies are combining to create three trends in the Web analytics sector:

From Clickstreams to Multi-Streams

Two years ago, the market definition of Web analytics was "clickstream analysis." However, leading-edge enterprises have gone well beyond this one-dimensional definition and now combine demographics, psychographics, search term analysis, survey results, usability studies, and competitive benchmarking — among other mechanisms — to answer the complex question of, "What are my online visitors trying to do, and how can I keep from frustrating them?" Although vendors have been slow to pick up on this trend — the recent alliance between Coremetrics and Endeca is a notable exception — this movement towards leveraging multiple streams of information will only accelerate, as the data is available and improves the accuracy of the analysis.

From Best-of-Breed to Consolidated Suites

Web content management, search/categorization, personalization, and Web analytics vendors have spent the last decade improving the capabilities of their offerings. Based on very different technological underpinnings, these applications have historically focused on increasing feature counts rather than their integration capabilities. However, as these applications become mature and enterprises begin to focus on the process (optimizing the Web site) rather than the different technologies (Web content management, Web analytics), there is an inexorable drive towards integrating these applications into a suite. DoubleClick, Keynote Systems, and Watchfire all offer examples of this trend. This type of consolidation occurred on the desktop (Microsoft Office) and in the Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) sectors, and Web analytics will be no exception.

From Feature Counts to Vertical Expertise

As of early 2004, the major Web analytics vendors had reached feature parity, in terms of data collection methods (browser-side tagging, import/export data for analysis), reporting (drill-down reporting, browser-based dashboards), and analysis (path and funnel analysis) capabilities. At this point, the market battleground shifts towards vertical expertise, as enterprises want to install a solution that uses their vocabulary and is optimized for their business. Coremetrics was the first to take on a vertical focus, and other players are not far behind.

May 2004

© 2004, Ballardvale Research. All rights reserved. Reproduction without the express written consent of Ballardvale Research is strictly prohibited. Information is based on best available resources. Opinions reflect the analystís judgment at the time and are subject to change.

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