Google launches free web analytics solution
Google today launched Google Analytics, a free web analytics solution available globally, only a few months after acquiring web analytics vendor Urchin. The free tool is uncapped for AdWords customers and free up to 5 million page views per month for all other users.
Google Analytics is functionally rich and sufficiently sophisticated to meet the needs of most web analysts. Based on our knowledge of Urchin and a brief review of the new offering, we think it won’t be the Rolls Royce of web analytics solutions – but it will appeal to the masses.
So what does this mean?
With hundreds of small web analytics vendors competing for a share of the under-a-billion-dollar industry, market consolidation seems more imminent than ever before. This will accelerate downward pressure on margins to attract new customers for existing providers. However, it does not mean that the market will decrease. Rather, it will grow in new ways.
We do not expect those who have made prior investments to migrate to Google in a hurry. They are more likely to attract newbies to web analytics and those who rely on Google AdWords for website traffic generation.
Google makes its money from AdWords. They have the lion’s share of the paid search market. According to research from ZDNet and ClickZ, Google had 35% of the $4.2 billion paid search market in March 2005. The search engine optimisation (SEO) market is larger than this, with many specialist consultants and service providers earning fees on top.
Notably, Google will introduce the analytics discipline into their vast installed paid search customer base – hence the name is Google Analytics, not Web Analytics.
Integrating a solution into their strategic cash cow, paid search advertising, from what was once regarded as a totally separate field, shows how serious they are to grow market share by adding value to an existing offering.
The previous remedy of blindly dumping traffic to websites for success is no longer an excuse. Incumbent search specialists will need to align with web analysts or upskill in the area to provide a responsible customer experience and offer optimised websites.
A minor point is the removal of potential consolidation issues between AdWords and other web analytics solutions when you migrate to Google. Those of us in the web analytics space experience first-hand the difficulties of consolidating results from one system to another. The use of Google Analytics will make this issue disappear.
But there are challenges ahead. The AdWords customer base does not always overlap with web analytics users. Paid search fits more in the domain of advertisers and campaign managers. These people will gain easier access to a platform to understand what goes on inside a website, like never before. Web analytics is, however, not defined by the platform only. It is the insights gained from the reports and functionality provided by the platform. To succeed, Google needs to educate the users on Google Analytics.
In our opinion, Google Analytics positions web analytics more clearly inside the realm of marketing.
PS. Read what Eric Peterson said about the announcement.