2006 was a busy time for the web analytics industry in terms of mergers and acquisitions - see vendor timeline (pdf). Probably the most significant event was the announcement by Microsoft in May that it had acquired Deepmetrix - a Canadian based web analytics tool. The similarities with Google’s purchase of Urchin a year before (April 2005) are striking - both in terms of strategy of the parent company and the features of the product they acquired…
Both companies (Microsoft and Google) are major Search Engine players and both have Pay-Per-Click advertising networks. This is a clear signal that online marketing and measurement/accountability are now going to be mainstream. Only a year or so ago, web analytics was considered an optional extra for online marketing campaigns. Now the two will become synonymous. Much of this has already happened with Google Analytics, but it is significant that Microsoft has come to the same conclusion.
Microsoft in October said publicly that they will start to role out their version of Deepmetrix in late Spring 2007. What will be interesting is whether it will be free - as is the case for Google Analytics. I would say almost certainly so, but may only be to adCentre advertisers in the initial phase, as opposed to all users - as was the case for Google Analytics. That would enable them to scale more efficiently than Google did when they had to introduce their throttled invitation system one week after launch (it lasted 9 months!).
Similarities of Urchin v Deepmetrix*
- Both companies were of a similar size around 30-40 staff.
- Both companies had a similar sized and loyal customer base.
- Both companies have a hosted (ASP) service and software solution.
- Both companies targeted the market at similar price points (mid and high tier clients).
- Both companies use essentially the same page tagging technology (javascript) to collect data for their hosted service.
- Both companies have a very close feature set - site overlay, geo-overlay, campaign breakdown, x-segmentation etc.
*Since the launch of Google Analytics its feature set has moved on significantly. Also ,since the notice of the Microsoft acquisition, Deepmetrix is no longer available to trial. So it will be interesting to see what additional features Microsoft have added in the past 12 months - or maybe that time is required for the integration with MS’s adCenter…
Our web analytics market predictions for 2007…
- MS releases “DeepSoft” or whatever they rename Deepmetrix to. Likely to be free.
- 100% advertiser adoption - continued rapid growth in adoption of web analytics tools to the point where whenever you setup an online advertising campaign, analytics will be a part of it by default.
- The number of mergers and acquisitions will continue to increase. With both “DeepSoft” and Google Analytics, are there opportunities for other tools other than large well established vendors that provide heavy customisation i.e. WebSideStory, Omniture, Webtrends. Other tools, excellent though some are (e.g. Indextools, Moniforce, Nedstat, Xiti, Instadia, Redeye) I feel will have to merge or partner to survive - either with other vendors or with agencies that build their marketing services around such products (similar to Webtraffiq and Clicktracks in 2006).
- As has already started to happen in 2006, web analytics terminology will simplify and become more business orientated and less technical. Expect to see buzz words such as “accessibility” and “discoverability” in the near future. At some point even web analytics as an industry term may disappear as the technique merges with business intelligence (that’s probably 2 years away, but it will happen!).
Happy new year to our subscribers!
January 10th, 2007 at 7:09 pm
It will be interesting to see if some of the smaller vendors will merge. Not with major vendors, but a smaller (less established) vendor merging with another smaller vendor. I can think of at least one good match. I can definitely still see a market for niche vendors or vendors that offer competitive pricing models or local offers.
January 13th, 2007 at 4:50 pm
I like your predictions for 2007. I would also be interested to see what kind of impact this (Google and Microsoft) will have on HitBox and Omniture when it comes to renewals. Will large corporations absorb the costs and what they know with their existing web analytics tool, or will some simply migrate over to the free tools. My guess is that the small guys, and most new sites will go with the free tools out there, while some of the larger sites will stick with what they know.
January 13th, 2007 at 5:13 pm
Lars: yes, the market definately has room for niche players - especially tools that can be fully customised. After all no one WA tool can do everything. My question would be how big is that niche market and can it sustain the R&D required to keep it viable? I am not sure it is now (certainly not in Europe), but if such vendors can stick around for a year or two, may be it will.
Jeff: I don’t think choosing GA (or MS - assuming it will be free) is a question of size of company/web site or the cost of the tool, though being free is an obvious USP that is hard to beat. I feel it is more to do with the level of bespoke custom installation of the tool required for the site in question and the large cost of that.
For example, some small sites (i.e. number of pages) can be very complex at gleaning a story and therefore require a complex bespoke tool with lots of engineer man hours to get the product implemented. The beauty of GA is that the setup is just so damn simple. So the question for the complex sites as to which vendor to choose is, does the effort of the complex implementation and on-going maintenance justify the benefits and insights gained compared to a tool such as Google Analytics? Of course for some sites that may be yes, but our experience in Europe would suggest that this is avery small number indeed.