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Buy analysis software or outsource service?

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The choice of whether to buy software to make your own ROI analyses on your Web site or to buy that capability from an outside vendor is one of the key challenges Web marketers face today.

"We're seeing a lot of movement, not just on site analysis programs, but in other enterprise applications, toward the hosted model," says Donovan Gow, a research analyst for the Aberdeen Group, a Boston-based market research firm.

Peter Adams, CEO of outsourcer Primary Knowledge, New York, says he can provide "a more complete package" than software companies by combining your data with raw files from other customers, and by collecting data from all of a client's "touch points," including e-mail servers.

Tara Agneta, marketing coordinator for Sane Solutions L.L.C., a North Kingstown, R.I.-based maker of NetTracker software, says her product lets you analyze data you'd never give to outsiders, such as logs of proxy servers, "to see employee use of the Internet."

Marissa Gluck, an analyst with Jupiter Communications, New York, says the best service bureaus will offer more than the work of software.

"The value of the service is the analysis and data mining," she says. "It's really hard to hire good analysts. Most agencies won't have the resources to do that."

What that means is outsourcing and the wise use of software make sense, says Lee Wright, president of People Design Technology, a Dallas-based consulting firm. Outsourcers will give you good ideas about how to target customers and improve results, he says, but the goal is much grander: integrating customer information.

Joel Yaffe, an analyst with market researcher Giga Information Group, Cambridge, Mass., says you can increasingly combine buying software and outsourcing with one contract.

Accrue Software, Fremont, Calif., and net.Genesis Corp., Cambridge, Mass., are now offering to outsource applications for clients, even though that's not their core competency, to secure more business long term. "A number of vendors are looking at the space, from a service as well as a tools perspective," Mr. Yaffe says.

Steve Podradchik, CEO of Marketwave Corp., Seattle, which makes the Hit List line of Web analysis software, concludes software or services is "not a replacement situation -- it's not either-or. If your investment is heavy enough, you need both kinds of things."

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