Yet again there's an interesting post on Avinash's blog about whether web analytics applications should be free. Avinash has been unjustly accused by a friend of his of asserting that all web analytics applications should be free, which he doesn't believe, though he does believe that a lot of people spend too much money on web analytics software, and not enough on web analytics people. I completely agree with his position.
In the web analytics industry, there is room for both 'free' and paid-for solutions. The 'free' solutions fall into two camps - those that are created out of the kindness of someone's heart (or are open source), which will necessarily be fairly rudimentary, and those which are subsidized by other revenue for the companies that create them, which are more sophisticated. This is the camp into which Google Analytics and Microsoft's forthcoming web analytics add-on to adCenter fall [disclosure: this is the project I'm working on right now]. Both of these solutions are subsidized by the revenues they (indirectly) generate on the ad networks of their parent companies.
So if you want advanced web analytics functionality but don't want to pay for it yourself, you need to be comfortable that the people providing it have their own agenda. And one of the key things you have to be comfortable with is that your data, and the presentation of it, is being hosted by a company who, with the best will in the world, aren't truly impartial - Google wants to drive Adwords revenues, and we want to drive revenues through adCenter. But nevertheless, there's been a lot of concern about entrusting your web analytics data to Google, and, when we launch, I'm sure there'll be just as much concern about our solution.
We've been having detailed discussions here about reassuring people that despite the fact that we have our own agenda to pursue (bringing people to our ad network), we will maintain the highest standards of impartiality and respect for the privacy of the data we're collecting, and actively work to help people understand marketing response across both Microsoft and non-Microsoft channels.
But many organizations will want to deal with a truly independent vendor, and, furthermore, one whose product development decisions are not influenced by the desire to monetize their ad network. In that case, the software's got to be paid for somehow, and at least if you're paying for it yourself, you have a nice straightforward relationship with the vendor. Not every type of site (for example, an intranet) can drive advertising revenues, so for these kinds of site, a paid-for solution is the best option.