Arthur Cole spoke with Pedro Sostre, Sostre and Associates, a Web consulting firm. Sostre's book, "Sell Now: How Conversion Design Turns Online Traffic into Online Sales," is due out this fall.
Cole: Research from Jupiter and other firms suggests that businesses both large and small are ignoring Web analytics even as advertising and e-commerce activity are increasing. What's causing this and why should companies start ramping up their Web analytics capabilities now?
Sostre: I think it's been kind of a slow progression, but it's going the right way in terms of companies starting to move toward embracing analytics and what it can do for them. I think what was happening was that companies were looking at the wrong metrics for what they could get out of analytics. The original buzz words were "stickiness" and "eyeballs passed" and "page views." They weren't the kinds of numbers that, at the end of the day, affected business as much as they felt it should. It was misinformation for the first few years. The numbers weren't really translating into usable business figures.
Now, I see the trend going back to finding the relevant metrics for business models, whether it's e-commerce or portal activity. We're focusing on what the numbers mean. Real interactive companies are now looking at analytics to learn who the customer is and discover new applications for market and product development.
Cole: Google recently launched a free WA service called Google Analytics, which has some people wondering if search results will continue to be unbiased. Is there any way for Google to ensure that search and analytics will be properly separated?
Sostre: Personally, it's kind of hard to lie and not get caught. I think if Google were foolish enough to try and skew the numbers or do anything that's not on the level, they would be caught very quickly. Whether you love them or hate them, you have to admit that Google can get away with quite a bit. But they are starting to realize that they are accountable to everyone. It's just way too easy to get caught to risk jeopardizing their analytics service. And most companies are using more than one provider anyway.
Cole: So what can we expect to see in the future for WA? Data gathering techniques are fairly advanced, but what about the actual analysis side?
Sostre: One of the huge gray areas as the Web matures in the next couple of years is increasing convergence. It started that you could throw anything online and it was so new that people bought it. Then advertising and brand building started to take hold. Now, we're getting to the point where there are enough companies out there and Internet consumers are savvy enough that companies are optimizing the entire process to make sure they are closing sales and not hurting business. A good way to start is to analyze how people interact with a site and see where the weaknesses are and where sales could be increased. Conversion rates are going from 40 percent to 400 percent. The first step in finding out where a site is in terms of conversion is to see where it is losing customers. You can flag whether a particular marketing campaign is good or a waste of money. Maybe users get pretty far, but are leaving at the shopping cart. You can make intelligent business decisions because maybe the sticker is too high or the process is too complicated. You can refine the entire sales process.