Eric Peterson on ‘Free vs Fee’

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image Eric Peterson has published a report which draws on some of the data he got from his web analytics practitioner survey a couple of months back to highlight that organizations who use free tools tend generally to be:

  • Small
  • Less committed to web analytics
  • Less strategic in their user of web analytics
  • Newer to web analytics

Eric uses these conclusions to argue that organizations who standardize on free tools are in danger of under-investing in web analytics. The argument sounds alluring – if you’re too cheap to invest in web analytics software, you’re probably too cheap to invest in all the other things you need to do to make a success of web analytics – but I worry that Eric has his reasoning backwards. For me, use of a free web analytics tool is likely to be a symptom of a lack of ability (or desire) to invest in web analytics, not the other way around. A lack of ability to invest in this area is particularly pronounced in smaller organizations, of course.

Eric makes a great point in the report that just because a company is small it doesn’t necessarily follow that the web isn’t important to that company. This is true, but lots of things are important to a small company – paying salaries, keeping creditors at bay, unblocking the toilets, making sales, doing tax returns, keeping the website running, and so on. it’s no great surprise that web analytics comes some way down the list, even to small companies who are primarily web-based.

It’s true that larger organizations should have more resources to devote to web analytics, including perhaps paying for a tool (and, more importantly, paying for the all-important service capability that comes along with such tools), but even here there is a wide spectrum of importance of the web to an organization: an online travel site that transacts close to 100% of its business through the web is going to take a different attitude to web analytics (or should do, at least) than a concrete manufacturer whose website is primarily informational. Though to be fair, Eric’s poll was amongst self-defined web analytics professionals; you’d expect to find them in organizations that take the web reasonably seriously.

Interesting to see the debate on this stirred up though, particularly considering my day-job. Nice work, Eric.

7 thoughts on “Eric Peterson on ‘Free vs Fee’”

  1. Ian,
    Good point, and interesting assessment of my conclusions. Perhaps some part of my motivation to write this report was the increasingly common attitude you hear from various parties talking about how “free web analytics solutions are the future” and “free web analytics is the gateway to ** everyone ** in the organization falling in love with web analytics …” While I like free stuff as much as the next guy, I’m personally quite suspect about statements like these.
    I guess it’s just too many years in the industry hearing how “this” or “that” are going to revolutionize web analytics forever — path analysis, multi-dimensional analysis, browser overlays, etc. I’m still more or less waiting for that day to come and thusly am a wee bit pessimistic after nearly 10 years chugging away at this stuff.
    And don’t get me wrong, I love Google Analytics 2.0 and am anxiously awaiting Gatineau (as are the teeming masses it appears!) But firmly believe two things:
    1) Web analytics is HARD
    2) There is no substitute for real commitment in web analytics
    Maybe I’m wrong. Do you think I’m wrong? Do your readers? Maybe I am, but I’m still waiting for someone to tell me a compelling story about how “free web analytics” changed their business forever.
    Cynically (but I like to think practically) yours,
    Eric T. Peterson
    Web Analytics Demystified, Inc.

  2. Eric,
    I don’t think you’re “wrong” or “right”. You’ve accumulated data based on a survey (which I took BTW) and have basically reported on it. The numbers don’t lie, unless everyone filling out the survey wasn’t being honest, which I don’t believe.
    I would just like to say that it is very easy to interpret the report and the survey results as “If you can’t afford to use paid-analytics tools, you’re going to be 2 steps behind everyone else”. The analyst behind the screen and using the analytics program is just as important (if not more important) than the program itself. Just because you own a Lamborghini, doesn’t mean you can win a race against a Jeep.

  3. Free Web Analytics tools cost you in other ways

    This is been on my mind for a while; in Eric Peterson on Free vs Feethat I just read about on Ian Thomass Lies,Damned Lies…blog – Eric makes a point that he alluded to at the last Emetrics Summit in…

  4. Hi Ian, as a web analyst for a london agency I run GA on over 50 sites for large clients such as Saab and smaller clients such as Royal Liver (an IFA portal). However I also run paid for analytics solutions on the larger sites where we need to segment/run different scenarios (which you can’t do with GA). There is alot of stuff you can do with GA once you work out how to use the advanced filters though (even getting your internal search keywords which lots of people don’t know about – will this be possible with Gatineau?). As someelse said a b2b company or site for online branding/informational purposes usually doesn’t see the need to invest in a costly analytics solution (even if they are a big company – here in england anyway) – there also some pretty good not too expensive ones like indextools, clicktrack pro and netinsight.
    Marianina –

  5. Hi,
    (*Isn’t this just an alternative way of re-stating the 10/90 rule?)
    As you rightly say, especially in the case of small businesses, constraints on time, effort and budget mean that if free tools are used, they may not deliver the kind of effective insights which are vital to drive (any) business forward.
    I would also argue though that perhaps this also has something to do with semantics.
    For example,it is far easier to explain the concept of SEO to a small business owner – even in such glaringly simplistic terms as ‘get top results on Google!’ ‘drive trillions of visitors to your site!’. It is a tangible.
    The difference with ‘web analytics’ is that it is still scary (=data!number crunching!), non tangible and about as ostensibly sexy as ‘bank statement’. So, in this context, it may very well just be regarded as just an add on – ie, nice to have as a freebie if you have a Google a/c by virtue of doing a couple of PPC ads, nice to have an ad hoc glance over once in a blue moon.
    Maybe web analytics as a discipline needs to sell itself better as a core business function and as the missing piece of the jigsaw puzzle.
    Instead of being so inward looking, get out there and hammer home the point that a structured, systematic ongoing process will deliver a real, tangible understanding in terms of what is making your business tick (-or not) and will provide directions going forward. (Mo’ money!)
    The irony is, at least as far as I see it, is that it is actually far more exciting to be a small company if you are using free tools effectively in a structured, systematic ongoing process.
    Ok, so the numbers might not be 100% accurate (-let’s not split hairs) but in terms of the trends and insights it can give you; well, it is fantastic, not least as you do not have to trawl through several layers of bureaucracy to get the say-so to change things/try out ideas in a comparatively short period of time.
    To paraphrase Nike, it really can be a case of ‘just do it’.

  6. In my view, free web analytics are better than no web analytics, which given the price of some of the high-end packages, could be the choice of many small- and medium-size businesses.
    Having covered the web analytics market for awhile (I wrote the first industry analyst report on it back in 2000), I’ve always been struck by how many enterprises have gone through multiple web analytics packages. The average seems to be around two or three, but I’ve talked to some enterprises that are on their fifth. It seems to come from the fact that enterprises need to crawl before they walk, and walk before they run in web analytics. They boot out a rudimentary package to get a better one, and then boot out that one to get a more sophisticated solution.
    Therefore, I view free packages as the first step on that odyssey. Because they’re free, they bring web analytics to companies that can’t afford much. Over time, some of those companies see the value of more sophisticated analytics and buy a package. Others don’t, and stay at the rudimentary level. Different strokes for different folks.

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