Web Analytics Responsibilities Will Move to Media Agencies
Based on my experience, the majority of web analytics (WA) tools are currently managed by a single, in-house person. More than likely, the WA tool is underutilized and the WA team is too small and undertrained. Heck, web analytics is hard. ;) I predict that within three years, media agencies will build out ‘web insights’ specialties and capitalize on the web analytics opportunity. Why will they be successful? (Disclosure: I work for an Omnicom Agency)
Current Lack of In-House Ownership
Where does WA expertise & ownership reside in your organization? Marketing? IT? Somewhere in the middle? Both? There is no consistent answer. And I doubt everyone in your organization that could find value in WA data uses it (or even knows it exists). Rarely is WA tied into major company marketing priorities, but most analysts agree it should be. The proverbial WA ball has fallen (or will fall) through the cracks somewhere between Marketing, IT, Web Dev firms, and interactive agencies. My argument: the group spending the most money to drive web traffic should “own” the full user experience and thus, web analytics. Typically, this group is an outside agency focused on display, email, paid search & SEO. Website performance, usability, and page optimization has a large impact on these online investments and are factors directly tied to performance/ROI and overall marketing strategy.
Current Lack of Talent & Economies of Scale
There are not enough talented analysts to meet the current demand, much less the future needs of our data-driven, B.I.-focused industry. “Experience”, although important, is not the same as talent. Similar to SEO, scarcity of talent leaves a large gap between those who dabble and those who specialize/excel. Independent specialists/consultants will realize that nearly the same WA tactics (data insights and actions) have major gains for clients and economies of scale are found. To get access to the top tier of clients (and dollars), these specialists will either join or become acquired by large agencies to add additional value to the current agency optimization techniques.
WA Insights Improve Agency Work
Tastes Great or Less Filling? …Put it on the website and see what visitors respond to more. If a company invests in a regional TV/Radio media buy, what results were seen online from the area – and was it ROI positive to justify expansion into new markets? For the Fortune 500, agencies are firmly entrenched in building the websites and driving the traffic to increase the company’s revenue. With WA being the ultimate tool of understanding the online experience and improving it, shouldn’t agencies put it to work to support their vision? I can’t think of a more appropriate group to gain insights and take action from the data that results in a major impact to the entire business. When you can make millions of dollars in online spend convert 1% better by improving the cart process, you just made the client a heck of a lot of money and the agency more valuable to the client by increasing the media ROI. Further support of the growing importance of the media agency was seen in AdAge’s “Why You Should Be in the Media-Agency Business.” The article cited a recent Booz Allen Hamilton study that asked marketers which organizations would become more important to them by 2010. Media companies, media planners and communications planners topped the list, with 52% of respondents believing they would be more integral.
Media strategists will seize the WA opportunity. Clients are demanding agencies to be more accountable for online performance as well as more data-backed “proof” for business strategies and tactics. The recent trend of the digitalization of offline media will only increase the need for talented analysts to interpret the data for the media agencies. Only time will tell. In the meantime, please share your thoughts.
Jeff Campbell
VP, Product Development
Resolution Media
Jeff K added the following ...
– Jeff –
Nice, thought provoking post, but I don’t buy into your predication completely. Obviously you have a self-serving interest in making your case. 
The case of any inconsistent in-house ownership does not translate to “let’s give it to someone else”. From my experience in dealing with large and small data-driven organizations (not just web analytics) there is often a lack of clarity of who owns or has access to corporate data…or even what to do with the data once they have it.
While it maybe true that most money that drives traffic is often an outside agency that does not mean they are or should be the “owners” of the web experience or web analytics. Agencies are partners (good ones I hope) and their responsibilities should not be to usurp actionable insight away from the clients in order to be the gateway of information.
As you point out, clients are demanding for better accountability by the agencies. Should agencies have ability to access and analyze data that is pertinent to their work? Without a doubt! But a company is not going (or certainly should not in my opinion) to give up ownership of this important marketing and sales channel. Also, as Ian points out that agencies are integrating their services, how can clients be assured that there are no conflicts-of-interests? Kind of reminds of the 90’s when the Big 6 (or 5 or 4) were doing auditing and consulting for the same clients
– Ian –
I think you hit it a good valid point (or was that a warning?) to agencies who lag in building out a solid data analysis practice.
I also believe web analytics will disappear as we know it or morph into something more reflective of what is really taking place – I prefer to call it Marketing Analytics – for lack of a better term.
Anyway - good post Jeff
Debbie Pascoe added the following ...
Jeff, interesting post. I read this several days ago and am only now finding time to compose a response.
Your comment: Based on my experience, the majority of web analytics (WA) tools are currently managed by a single, in-house person.
My response: Based on the survey I conducted in December – Where in the Organization is the Web Analyst? – of 74 respondents, 48% had teams of 2-4 members performing web analytics duties, 21% had more than 4. This survey was a follow-up to a survey conducted in December titled “Where in the Organization is the Web Analyst”.
Here’s a link to the survey results: http://weblog.maxamine.com/survey-results/
Your comment: I predict that within three years, media agencies will build out ‘web insights’ specialties and capitalize on the web analytics opportunity.
My response: They should develop more expertise around web analytics. Currently we frequently see what seems to be a disconnect; site creative design is not always aligned well with business goals. When agencies have more visibility into a more complete “cause-and-effect” picture, it will ultimately enable them to be more aligned with their clients needs.
Your comment: …the group spending the most money to drive web traffic should “own” the full user experience and thus, web analytics.
My response: One question in the survey asked ‘what department is the web analyst part of?’ While no group emerged as the de facto “home” for web analytics, Marketing departments do hold the largest share at 33.8%. 6.76% said Business Intelligence. 10.8% selected eCommerce, while several respondents identified e-variations. I believe when I do this survey again,the marketing department share will be larger.
Your comment: For the Fortune 500, agencies are firmly entrenched in building the websites and driving the traffic to increase the company’s revenue.
My response: Yes agencies are firmly entrenched. However I have to disagree with the direction you are going here. No agency can understand a company’s business as well as the business itself understands it. Agencies have x number of resources to serve Y number of clients, and the challenge to balance those resources against your own revenue targets is constant.
Organizations may look to their agencies to gain a better understanding of the direct relationship between the creative aspect of the site and the business outcomes they need to accomplish (making a sale, generating a lead), and use web analytics to measure that. I can not see them wholesale turning over web analytics to an agency. To do that means that the agency takes over the day-to-day management of the web analytics implementation, not just the interpretation of the bits most directly related to sales and lead generation.
Companies serve many other stakeholders – investors, customers, employees – all those interactions have to be measured and analyzed, and preferably by one instrumentation of the site (and for F500, it’s not one site, its many woven together). We are seeing lots of instances of sites where the site owner has one chose web analytics vendor, then separate, some sections have been instrumented with a different web analytics vendor by an agency charged with a specific task. This results in a bunch of disparate, disconnected data sets and it adds unnecessary weight to page load times.
Your comment: Clients are demanding agencies to be more accountable for online performance as well as more data-backed “proof” for business strategies and tactics. The recent trend of the digitalization of offline media will only increase the need for talented analysts to interpret the data for the media agencies.
My response: I couldn’t agree more. As mentioned above, we frequently see a disconnect between the creative elements of web design and the business drivers. Site owners are becoming much more in-tune with this, and are demanding accountability as a result. This trend will absolutely continue and gain momentum.
Anon added the following ...
As a web analyst in the process of moving from an agency back to client side, I feel that until agencies truly embrace relationship marketing they won’t see the full benefit of having a proper web analytics department.
As Jim Novo likes to put it, there are lots of people talking the talk but few walking the walk, but its encouraging to see more RFPs requesting relationship marketing programs. Hopefully these will drive change which is inevitably hard for advertising people who are used to traditional marketing techniques.
Nick Potter added the following ...
Although I wholeheartedly agree with the statement:
“the group spending the most money to drive web traffic should “own” the full user experience and thus, web analytics.”
I’m not necessarily sure this results in the arguement that web analytics should reside with a media agency.
At the end of the day isn’t it the internal marketing departments that are spending the money employing the media agencies and suggesting what campaigns should/shouldn’t be run?
Historically in the company I work for, web analytics was used in some places but managed and controlled by IT. Part of my job has been to standardise this and move ownership to those in marketing. But it has been tough due to the second point you make.
Marketing people often don’t understand some of the technical aspects of the web, and using/creating reports within web analytics solutions can be seen as too technical. Previously, we had the opposite situation with IT giving new reporting requests a low priority due to a lack of understanding on the marketing side. So I do think it takes a very certain talent to manage and work with web analytics.
Whilst I don’t doubt the media agencies will need access to the data in order to continuously review/improve campaigns along client guidelines, and therefore will need staff versed in use of the available tools and with an comprehensive understanding of web analytics, I don’t see this as a pure agency activity, and would expect continued in-house ownership of web analytics, albeit by a suitably experienced marketing professional.
Jeff Campbell added the following ...
Great feedback everyone - and some interesting points made, thank you. I was indeed being a bit dramatic in the “100%” take-over of WA responsibilities by agencies, but it hopefully made you think about the possibility. I think we’d all agree that agencies should take a larger role with WA results and onsite engagement (and dare I say clients need to loosen the reigns?).
Debbie, I fully support your frustration with web dev firms focusing on creative/award winning websites over e-commerce/conversions/usability. As an SEO, we typically have to undo/redo much of what a client just paid another agency big bucks to create – what’s the point of a fancy site if the search engines can’t find you (i.e. flash) or purchasers aren’t patient enough for the ‘Loading…’ to complete? Like it or not, it’s happening way too often, possibly because there is no owner to web analytics giving them quantitative direction (or even post-launch feedback), be it client- or agency-side. Who will step up?
Jeff K, your point of agency overlap was interesting. Multiple agencies will continue to be involved with a single client’s adv/marketing objectives (and always will be, per the “jack of all trades” logic), but there has definitely been a client-driven trend to consolidate business under a single adv. holding company (WPP, IPG, Publicis, Omnicom, etc.) and openly share data under that umbrella. It’s a start at least, but there is potential for competitive overlap.
Debbie, depending on your survey audience, I wouldn’t be surprised if the BI groups gain ownership share over marketing in the next round (everyone seems to want to build a BI group), but I’m done making predictions for now 
Thanks again for the interesting points. Keep the comments (and disagreement) coming!
Lars added the following ...
I too believe that media agencies need to get better at web analytics, but let me pour some gasoline on the fire.
I have experience from working as a web analyst and Internet marketer for a Global Fortune 500 company.
I was NOT impressed by the work media agencies did, and was happy to bypass them. They did not provide any value from a direct sales point of view (just from a fluffy branding perspective).
In fact, I’ve argued that they currently do not want to get involved in web analytics because then they will have to tell their clients that a lot of what they have pushed in the past doesn’t work from a performance marketing point of view.
As long as there is big bucks in fluff they won’t see a need to change.
Jeff Campbell added the following ...
Lars (or anyone),
“As long as there is big bucks in fluff they won’t see a need to change.”
Any thoughts on why companies continue to throw big bucks at fluff (cause you’re dead on)? We, as web analysts need to stop this, right? Why haven’t we or what’s stopping us?
Debbie Pascoe added the following ...
Question: Any thoughts on why companies continue to throw big bucks at fluff (cause you’re dead on)? We, as web analysts need to stop this, right? Why haven’t we or what’s stopping us?
RESPONSE:
It is simply the product of people viewing the web as business asset through too narrow a lens for far too long.
If your concept of “success” was…shall we say limited by certain pre-conceived notions, would you choose to date the beauty queen that makes her case wearing a thong bikini, or the conservatively-dressed-with-business-case-coming-out-of-every-pore agency? Hands down, the bikini-clad beauty queen is the sexiest and most fashionable….and then what?
Companies are increasingly understanding the importance of web-enabled information/products/services to their bottom line. Today, people are struggling with clarity; they are, however, increasingly overcoming this hurdle.
Agencies can gain - and have gained - advantage (intentionally or unintentionally) as a result of this lack of clarity by site owners. Agencies tend to employ creative types that may be fabulous at what they’re fabulous at. Unfortunately, what they’re fabulous at can - and often does - work at cross-purposes with what the client needs to accomplish.
Downside: if you are the CMO who engaged an agency to create a totally-sexy, total-flash-with-no-discernible-connection-to-the-bottom-line web site, we’ll look for your name in an upcoming news article, as someone who “has decided to leave to pursue other interests”
As you can see by Jeff C’s response to my response, his agency has had their share of undoing the damage that can and does occur.
As site owners become more attuned to the strategic importance of their web properties, the people they put in charge of these decisions will, in turn, be more attuned to all the contributing factors. As that occurs, agencies that don’t fully understand the interrelationships of structure, strategy, and optimization, combined with purpose, will be sidelined in favor of those that do.
Lars added the following ...
I’ve come across many media agency people with a background in print media. They’re happy if they get what they got in the old world. That’s another reason.
We need to become embedded in media agencies, or become a filter between media agencies and advertisers. Currently the latter seems like the easier route.
Sometimes I even argue whether media agencies have a future. Business models change on the Internet, and companies like Google facilitate change.
Lars added the following ...
Many of the people we need to talk to think that events like SIME (http://www.sime.nu/) are much more cool than events like eMetrics(http://www.emetrics.org) or IMC (http://www.internetmarketingconference.com).
How do we make accountable marketing (more results, less surface) more appealing? I mean, it should be a no-brainer, but it isn’t.
Move budgets from marketing or communication units to sales units. Sales units have to make every dollar count.
Nick Potter added the following ...
Jeff,
I agree on your thoughts that it may well be BI that takes ownership. Even where I’m working there is a massive move to consolidate the analytics data with the already built and robust BI systems and people are looking at ways the various tools available can provide suitable feeds into the proposed data warehouses.
Ultimately this would mean web analytics data just becomes another data source that feeds into the warehouse and which you can base your queries on. The interesting thing about this is that the vendors front end tools may become less important (certainly from an enterprise point of view) and instead it will be the quality of their back-end data systems/schema, along with their data collection methods and any pre-formatting/cleaning of data they can do prior to feeding in the data, that will be the driving force in selecting a vendor.
Joseph James Geertz added the following ...
Lars (and Jeff, with regards to your question to Lars),
With the big bucks thrown at fluff issue, I don’t believe the question is as difficult to comprehend as you portray it.
Media agencies are in the position of power in the marketplace. Companies that depend on media agencies over web analytics service companies are following accepted business practices. To do otherwise is a risk. If you (you in this case being individuals in those companies with the authority to decide between ma and wa) take a risk, and suffer bad financial results, you get blamed and you suffer consequences. If you follow accepted business practices and suffer bad financial results, it was probably someone else’s fault. CYA.
Second, I don’t believe all web analytics companies are selling more results, less fluff. Many web analytics companies appear to take routine statistics (web visits, time spent, penetration, et al.) apply some voodoo math to the statistics and pop out values that are alleged to have meaning. Plenty are unsupported and unsubstantiated fluff. So a consumer needs to take a risk going away from the media agency then has to be bold enough to believe they can separate the quality web analytic company from the fluff.
Do media agencies have a future? You bet. They are the ones with the clients. All they have to do is follow the trends and do what the clients want. If the clients want web analytics, the media agencies will buy web analytics companies and make them subsidiaries (a process currently underway). Then a client employee can take the safe road and hire a media agency and get web analytics data.
Lars added the following ...
Well, there are rotten eggs everywhere, but while some web analytics firms deliver fluff I’ve yet to come across a major media agency not delivering fluff. It may be different on your market though.
I agree though that assumptions are being made based on some very general top level wa metrics sometimes.
I don’t necessarily think buyers are cowards. I think it’s more simple than that — some have very little knowledge (if any) in web analytics. Why buy something you don’t understand? If you don’t know what you’re missing out on, why worry?
I still believe it’s possible to build collaborative web services that render media agencies redundant. Power to the advertisers!
ian added the following ...
Jeff,
Excellent post - and great to see someone else prepared to make a concrete prediction!
I completely agree with your prediction, though with one modification, which is related to my earlier post here. Another way of saying that web analytics will “disappear” into related disciplines is to consider the emergence of a rich kind of media analytics which is essentially a fusion of the kind of data & reporting traditionally provided by ad servers with the site-side data that has been hisorically offered up by web analytics tools. It is these tools that I believe media agencies will embrace (and, even, develop) as a way of providing accountability and ROI measurement for their clients.
The reason I’m making this rather pedantic-seeming distinction is that I feel there will be another ’side’ to the web analytics industry, much more focused on on-site behavior analysis, with deeper links into CRM solutions and the like. This side of things will be more difficult for media agencies to reach into, since the actionability of the data will require the co-operation of the organization that builds and manages the web site.
As agencies start to re-integrate, combined media/creative agencies will be able to play on both sides of this game, but there will still be plenty of scenarios where the two are kept separate. Even ‘integrated’ agencies such as our own Avenue A|Razorfish keep the media (Avenue A) and Creative (Razorfish) parts of their business somewhat separate, partly to ensure their independence, and partly in reflection of the day-to-day political environments they encounter in client scenarios.
But as I said, ultimately I wholeheartedly agree with your premise: signficant media & creative agencies will need to embrace web analytics as a way of increasing the value-add they offer to the client (especially on the media side, where media buying is under constant price pressure, and switching costs for the client are relatively low) and deepening client relationships. Agencies who act sooner rather than later to build data analysis practices will steal a march on their less fleet-footed competitors.
Cheers,
Ian