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August 31, 2007

Web Analytics in Europe

euro-cultures-for-dummies By now you may have read that I'll be appearing at OX2's Web Analytics Day in Brussels this month (on the 14th, to be precise). I'll be delivering the first public preview of Gatineau beta 1 and showing some stuff that so far has only been shared with "special friends of Microsoft" (i.e. people who've signed an NDA with us).

But my imminent trip to the "Capital of Europe" (Rene, you might want to ask some non-Belgians about that claim), plus Avinash's recent "Web Analytics industry 101" post, has got me thinking about the European web analytics industry, where I toiled for 6 years before coming to the US. And I felt that some of the vendors should get a mention. I know it's all about Omniture, WebTrends, Visual Sciences, Google and CoreMetrics (oh, and us) these days, but Europe has contributed some interesting players of its own. So here's a (non-exhaustive) list of who's who (or who was who) in web analytics in Europe, in no particular order.

IndexTools

Probably the best-known European vendor this side of the pond, hailing from (somewhat improbably) Hungary, IndexTools is run by the incomparable (and seemingly inexhaustible) Dennis Mortensen, who maintains a very good blog. Founded around the same time as WebAbacus (my alma mater - see below), IndexTools pains me slightly because when I look at it I see the company that I kind of wish WebAbacus had become. They've also recently made a successful leap into the US market (at least, I assume it's successful).

My only gripe with IndexTools is that when Dennis is asked "why IndexTools?" he often replies "because we're cheaper than the other guys!" This does a great disservice to the technology that Dennis and his team have built. Although a "lower-end" tool, IndexTools is a very nice piece of work, with one of its most stand-out pieces of functionality being an incredibly easy-to-use report builder that uses Ajax to achieve a kind of pivot-table-like UI inside the browser. So Dennis, stop selling your stuff short!

NedStat

Based in the Netherlands (but with offices in London, Paris, Madrid, Antwerp and Frankfurt), NedStat is the biggest European web analytics vendor. They've been around for ever - since 1996 - and could possibly lay claim to being the first hosted web analytics solution. In the early days their stuff was really rudimentary, though they picked up some good traction amongst media owners because they were able to support ABCe audits before most other vendors could.

Their current product set includes NedStat Pro (aimed at SMBs) and SiteStat (an "Enterprise" solution). NedStat Pro is now a kind of HBX-like solution (though a little lighter on functionality), with a strong focus on paid search management and reporting, and represents the bulk of NedStat's customers (they did have an even lower-end solution, but they sold it off a couple of years ago). SiteStat is a "custom reporting" solution, with the custom reports built by NedStat consultants. In the past, NedStat charged by the report; I don't know if this is still their business model at this end.

NedStat has suffered in the last 18 months with the appearance of Google Analytics, which has undermined their low-end value proposition, and the entry into the European market of Omniture and improved solutions and support from Visual Sciences and Webtrends. To be honest I'm not sure where they go from here.

Foviance (formerly known as WebAbacus)

Ok, I have to get a mention in for my former employer. WebAbacus (which merged with The Usability Company in 2005 to create Foviance) was founded in 2000 by spinning out the software development arm of Blue Sky Communications. Always an "Enterprise" (read: rather complicated) solution, WebAbacus was (and is) notable for its great flexibility and very strong ETL capabilities - as well as traditional web analytics, the software's been used to analyze online media delivery, call logs from interactive payphone kiosks, DiTV logs, search logs, and proprietary e-commerce engine logs.

Available now as a hosted service or installable software, WebAbacus is now folded into Foviance's "Experience Management Service", a consulting-led service that aims to help organizations improve the usability of their websites through a combination of traditional usability expertise (including lab tests) and quantitative behavior analysis.

Looking back, I regret that WebAbacus didn't follow the same trajectory as Omniture (also founded at around the same time), but the product has found itself a successful niche at the usability-focused end of the web analytics market, saving it from the harsh glare of the center of the market, where the more formidable US vendors play.

Site Intelligence

This is another company I have a soft spot for, even though they beat WebAbacus to the punch for a number of significant deals at a crucial time in the company's history. Site Intelligence was founded by John Woods (now to be found at Synature), and is also very much in the Enterprise space. They have some pretty major clients in the UK, including Tesco and Carphone Warehouse.

The Site Intelligence product, VBIS, is a pretty full-on web analytics data warehouse app, with good scalability characteristics (Tesco.com is a pretty busy website). The SI approach is very services-heavy, with custom development work often occurring for major clients. This obviously means that those clients can get pretty much exactly what they ask for, which has helped SI to win major deals.

I'm a little concerned about the future of SI, however, now that Omniture (with its Discover data warehouse product) is very much active in the UK. I'm not sure which nook SI could tuck themselves away in to avoid being swept away as major businesses migrate from custom solutions to "packaged" web analtyics. But if you have a big site and/or complex needs, you should definitely talk to SI as part of your selection process.

Clickstream

No trip down web analytics memory lane would be complete without mentioning Clickstream - surely one of the most colorful web analytics vendors to emerge from the UK, not least because of the entertaining names of its management team (Titus Suck sticks in my mind). Clickstream's claim to fame has always been a proprietary data collection mechanism that they used to claim (and occasionally still do) delivers "100% accurate web analytics data".

They originally entered the market as a direct competitor with the likes of WebAbacus and Site Intelligence, offering reporting services as well as data collection, and generated a lot of heat (though not much light) in the early part of the decade about data accuracy. But they got out of the actual reporting business in around 2004, concentrating instead on forging partnerships with web analytics vendors who could use their data for generating reports.

Clickstream's challenge has always been that, whilst alluring on paper, their technology is incredibly complicated in practice, whilst delivering marginal benefit in terms of accuracy (analysis of off-line browsing behavior, anyone?) We had our fingers burned a couple of times in trying to do joint projects with them in my WebAbacus days. In recognition of this, Clickstream have turned their offering into a hosted service with the promise of "instant, accurate web traffic data" without having to tag your site. All you have to do to get this data is redirect your DNS entries via Clickstream's proxy servers which will auto-tag your site. Redirect a major site's DNS through a small company's server farm? Hmm. Let me know how you get on with that.

Instadia

Danish web analytics vendor Instadia had a unique twist on web analytics - integrated survey results. Through one analytics/survey interface you could deploy a survey on your site and then integrate and cross-reference the survey results with the behavior patterns of your visitors.

Instadia was successful enough at doing this that at the beginning of this year they were acquired by Omniture, partly for their survey capability, and partly for their European client footprint. Former Instadia ClientStep clients are now being encouraged to migrate onto Omniture SiteCatalyst. I'm not sure what is happening with the survey capability, but I imagine we'll see something integrated into a future release of SiteCatalyst.

WebtraffIQ

There are a number of minnows that livened up the UK market in the early years (M-tracking, Thinkmetrics) but WebtraffIQ deserves a special mention for the chutzpa of its CEO, Marcos Richardson. I never actually met anyone who was using WebtraffIQ, but Marcos did a great job of stirring up controversy on the pages of NMA (premier trade rag for the UK online industry), so that the company punched above its weight.

Ultimately, though, Google Analytics did for WebtraffIQ's business model; Marcos has wisely rolled up the software part of his business and now concentrates on providing consultancy services around GA and other tools.

 

So that's it. Not a bad list now that I come to look at it. As I said, if I've missed your company (my visibility of the smaller players in continental Europe was not perfect), let me know, and I'll put in an honorable mention section at the end.

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August 29, 2007

Ian Thomas Lies

Have just finished watching the video that Avinash made of the presentation he gave at SES San Jose last week. He mentions (and is very kind about) Gatineau a couple of times - thanks, Avinash - but for me the real nugget of useful information in the presentation is Avinash's tip on how to find my blog if you can't remember the URL - just type "Ian Thomas Lies" into your search engine of choice (Avinash says type it into Google, but you'd all use Live.com, wouldn't you?), and this blog comes up as the no.1 result. Heh.

You can watch the presentation by clicking on play in the box below. The juicy Gatineau stuff comes around the 40th minute. But it's well worth watching the rest if you'd like a "web analytics industry 101" rundown of the main data collection methodologies and the major players. Avinash also makes some comments in the middle part of the presentation about the difficulties of monetizing web analytics which echo (to some extent) comments I made in a previous blog post on the same topic.

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August 20, 2007

Welcome to the world of Microsoft APS

APS-bead So, last Monday was a big day for me, and for a few thousand of my colleagues at Microsoft and aQuantive - we closed the aQuantive acquisition that we originally announced in May. Those of you who like to track every iteration of Microsoft's ever-changing organizational structure may already have read that we've created a new organization within the "Platform and Services Division" that is headed by Kevin Johnson, called the "Advertiser and Publisher Solutions Group" (or APS, as we acronym-heads are already calling it). APS will be headed by Brian McAndrews, former CEO of aQuantive and will provide ad buying and selling solutions for advertisers and publishers (hence the imaginative name).

So far, so "so what?" But actually the creation of APS is highly significant for Microsoft's online business - I'd go as far as to say it's the most significant development since the creation of MSN back in 1995 (or perhaps more accurately the creation of MSN.com in 1999, which heralded the start of Microsoft's foray into selling online advertising).

Why? Because up until now Microsoft's online business model has been as a "first-party" seller of ads.

Publish and be damned

MSN and Live.com are essentially just big publisher sites (or media networks, to use the fancy term), and the day-to-day business of making money from them has been a case of creating advertising opportunities (everything from banners on the MSN.com home page to ad spots within the MSN Messenger window) and selling this ad space to advertisers, either directly or through agencies or networks.

Sure, Microsoft is one of the most sophisticated media networks out there, with a full-fledged search engine and a whole suite of tools to sell, buy and place ads on our network, but we've always been limited (with some minor exceptions) to selling inventory from our own network. And how do you grow a first-party ad business? Well, you have to grow your audience, or you have to grow the amount they use your stuff (since the more often they come back to your site, the more times you can show them ads). We've been doing pretty well in both these areas, but big online portals are one of the more mature areas of the Internet, and the other guys have been providing some fairly robust competition in the area of search.

From first-party to third-party

So over the past year or so, we've been embarking on a different strategy; or, at least, a complementary one. We've been cutting deals with Facebook and Digg to serve ads onto their pages; we've been working on a contextual ad platform that will allow third-party publishers to monetize their content, and we've been acquiring companies like Massive (which sells ads inside video games) and adECN (an online ad exchange).

What all of these have in common is that they help us to sell ads on third-party sites, not just on our own sites. The aQuantive acquisition fits right into this strategy.

aQuantive's business is all third-party - they help advertisers to buy advertising, and they help publishers to sell ad space. The money's made in fees for providing those services. So they really understand this business, especially the third-party publisher part, where we have less experience.

Brian, meet Steve; Steve, Brian.

So the way to think about APS is as a third-party ad business within Microsoft. We already have a long list of advertiser clients, and a long list of publishers and ad networks (define), of whom one (albeit a really, really big one) is Steve Berkowitz's Online Services Business - that is, MSN and Live.com. With the creation of APS, Steve's charter just got simpler: his job is to generate the maximum revenue he can from the MSN and Live properties. He's running a media business.

Brian's job, on the other hand, is to buy and sell the most ads he can for the best price he can, by connecting various buyers and sellers of these ads. And to do this, he needs a great suite of products to help advertisers compose and upload ads, find the best places online to show those ads, decide on what price to pay, and understand how those ads are performing; whilst for publishers, we need products to help them make their ad inventory available to buy, decide on what price to charge, structure their inventory so they sell the most of it they can, and understand how their inventory is performing (i.e. how many ad clicks they're getting).

Plenty of technology, in other words, for a died-in-the-wool geek like me to sink his teeth into. And did you notice how measurement is present on both sides of the equation? Measurement (and its glamorous younger sister, optimization) is the bread and butter of the online ad business. So the next couple of years should be fun...

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August 17, 2007

Gatineau beta access request form online

In preparation for our first beta in the coming months, we now have a fancy online form that you can fill out to request access to the Gatineau beta program. You can access the form at this URL:

http://advertising.microsoft.com/microsoft-adcenter-gatineau

If you'd like to participate in the beta, and even if you've sent an e-mail previously to our beta request e-mail address, please go and fill out this form.

One of the things you'll notice if you read the text on the form is that you will have to have an adCenter account in order to use the Gatineau beta. If you already have an adCenter account, you're in great shape - just make sure you use the e-mail address that you used to register with adCenter in the Gatineau form.

If you don't have an adCenter account, you'll need to register for one as part of the Gatineau sign-up (once you receive your invitation). At the moment this means you have to enter your credit card details and pay a one-time $5 fee. We're looking to remove this requirement in due course, but that's the way it is right now.

And just to reassure you, if you fill out the form to request access to the beta, we won't charge you or bill you for anything until/if you actually sign up. So go register your interest now!

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August 07, 2007

Miscellany

Schotts-Miscellany Yet again I have to apologize for not posting more frequently. In lieu of a proper, substantive post about a weighty topic, here's a collection of tidbits from the industry and blogosphere:

Another civilized spat has broken out about the merits (or otherwise) of Technorati rankings for assessing a blog's popularity, spurred by Avinash's latest semi-annual Top 10 Web Analytics Blogs post (I'm in at #8, thanks principally to the large number of inbound links I get every time I post anything about Gatineau). Eric Peterson and Gary Angel weigh in on the side of the humans. Me? I'm happy for Avinash to continue to rely on Technorati rankings until my RSS subscribers (the other component of Avinash's new ranking algorithm) pick up.

We've been putting our hands in our pockets again  - this time to buy adECN, an online ad exchange based in Santa Barbara, California (horrible place full of reprobates, I hear). This acquisition, though small (especially compared to our recent splurge), is central to our strategy of building an efficient marketplace where buyers and sellers of online ads can find each other and do business efficiently. Unclear as to exactly what an ad exchange is? You need to read this excellent article by my colleague Eric Picard (he's not as mean as he looks in his by-line photo).

Visual Sciences is continuing its quest to find a buyer. This news isn't super-fresh, but it seems that Visual Sciences (formerly WebSideStory) is looking for a buyer, and has appointed an advisor. They have also announced revised Q2 earnings expectations, down a couple of million dollars from their previous estimate. So the question is, who would be interested in buying VS? By all accounts they've faced some challenges integrating Visual Sciences into the main company (with the rename, the have a Visual Sciences division within Visual Sciences Inc - too confusing), as Rand Schulman explains in a recent interview with Eric Enge. They have some very strong technology, but I'm having trouble imagining which single company would want both the VS and HBX sides of the business. Perhaps someone will buy up the whole thing and then sell off half of the business/technology? Or is the company too integrated to do this now?

There's been plenty of comment out there in the blogosphere about the pre-beta screenshots of our "Gatineau" analytics tool that leaked a couple of weeks ago. Much of the comment has centered around the demographic segmentation functionality that will be a central feature of the tool. It's interesting to observe the gap between what we consider to be acceptable use of anonymized data and what (some of) the rest of the world thinks. I'm still hoping to post a little more detail about the systems we use to ensure complete separation between the PII data we collect from our Live ID users and the demographic data that turns up in Gatineau, but I still need to check with PR/Legal, and I haven't had the time.

That's it - turns out I probably had enough content for a couple of posts, but then I would forget to get to the second one, so you get it all in a lump. 'Til next time...

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