Google Analytics Draws Industry Reaction

On November 14, 2005, Google announced its free, hosted web analytics service. Based on the Urchin analytics platform, which Google acquired earlier in the year, the service boasts website analysis tools aimed at executives, marketers, and webmasters.

According to a Google press release, the tools are being made available to help businesses understand their customers and build better websites and assist Google customers monitor their AdWords pay-per-click campaigns.

Industry Reaction

The response among the web analytics industry to Google’s free offer has been mixed.

Karen Hudgins is a marketing specialist with Sane Solutions, the maker of NetTracker analytics software. She responded, “We applaud Google’s entrance into the web analytics market. As more reputable companies engage in offering web analytics services and products, this further exemplifies the importance of website analysis and increases the market’s awareness of web analytics. In turn, this expands the market for all web analytics companies, especially those offering enterprise web analytics solutions.”

Mini Peiris, senior director of project management for NetSuite, had similarly positive things to say about Google Analytics but noted some limitations.

“Google’s offering allows businesses to analyze their site traffic and provides some valuable insight. However, to truly grow an online retail business, it is important to tie web analytics through to revenue and close the loop. These revenue-based metrics allow businesses to make decisions based on total ROI rather than just traffic or overall percentage conversion. It is understandable why they [Google] chose to make it free since it does not offer the revenue-based metrics that truly benefit a company’s top and bottom lines.”

However, Stephen Messer, CEO of Linkshare, an analytics and affiliate marketing firm, cautions, “Nothing is more expensive than free.” Referring to questions about how Google could use the data, Messer stated, “Since Google collects the data, they presumably own it and can do with it as they please.”

Michael Stebbins of Clicktracks, another web analytics firm, shared this view. Stebbins stressed a growing discontent among web users that Google Analytics will infringe on their privacy. “First, marketers do not want their conversion data used against them in increased ad costs. But of even greater concern to both marketers and visitors alike is that Google, as a mass advertiser, has not ruled out the use of cross-site visitor profiling and ad targeting.”

Google’s Response

A spokesman for Google strongly disagreed with this view.

“Our business model is fundamentally based on trust,” responds Richard Holden, the project management director at Google. “If we don’t have user trust, then we don’t have a search business. If we don’t have a search business, we don’t have an advertising business. Doing what our competitors are suggesting would be counterproductive for us.”

Holden says that Google is providing the free analytics tool to help marketers measure the effectiveness of their advertising and, in a more general sense, to help developers create better websites. “In the end, it is the customer that benefits by being able to find the information or products that they are looking for more easily,” stated Holden.