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Free Internet analytics tools: Too good to be true?

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Any marketer worth her salt knows that the most powerful word used by marketers is “free,” and when that word is used to market to a marketer, they are often every bit as tempted as any other customer. However, in the case of free Web tools, the term doesn’t always translate to best practices.

Marketers using free Web analytics tools are more likely to treat analytics as a casual endeavor, according to Web Analytics Demystified, in a report the company is releasing tomorrow called “The Problem With Free Analytics.”

The research that serves as the foundation of the report revealed 35% of analytics practitioners surveyed use free solutions on an ad hoc basis, while fewer than 20% of those using licensed solutions reported ad hoc use.

“They’re not doing regular reporting,” said Eric T. Peterson, CEO and principal consultant at Web Analytics Demystified, a Web analytics consulting company.

“You need a process-oriented approach to really take advantage of Web analytics.” Peterson said the findings are based on a survey of 856 Web analytics practitioners.

Free analytics really took off following the introduction of Google Analytics. While the original product debuted in November 2005, a significantly enhanced version released in May has attracted more interest.

Meanwhile, marketers that pay for licensed tools, such as Omniture, Visual Sciences and WebTrends, tend to commit more resources to Web analytics. Eighteen percent of those using licensed solutions said they are understaffed for Web analytics, compared with 42% of those using free Web analytics.

“Companies using a paid service are farther along in corporate-level adoption of Web analytics and they tend to have better processes in place,” said John Lovett, a research analyst at Aberdeen Group, a Harte-Hanks company.

Peterson said better processes mean more commitment to managing the data, whether a marketer is using a paid service or a free service.

“You have to be committed to Web analytics,” Peterson said. “You have to be willing to assign resources. You have to hire people or assign people internally to manage the data. You have to be willing to commit to the process of understanding and doing it.”

He admits it is not easy. “There’s more to it than a nice looking interface,” he said.

For many companies, there is simply not enough manpower to dedicate resources to Web analytics. According to a recently published report from Aberdeen Group, more than half of analytics users (53%) said their No. 1 frustration is that there are not enough resources dedicated to managing analytics.

One marketer BtoB interviewed said no one service can do it all, so he is using a paid service and a free product, as well as his own log analysis.

“We use Omniture as our paid [analytics tool], and we use Google Analytics as our free and we do log analysis [in-house],” said Paul Holstein, senior VP at CableOrganizer.com, a cable and wire management product marketer.

“Omniture is a great package but it doesn’t do everything.” Omniture cannot calculate bounce rates by keyword or refer, and it cannot calculate “time on site.”

“Time on site is also standard [in Google Analytics], while Omniture still struggles with bounce rate and time on site,” he said.

In addition, Google Analytics held appeal for Holstein because it is integrated with Google AdWords, Google’s paid search product, and Google Web Site Optimizer, its free multivariate testing tool. He has been using Google Analytics for about six months and Web Site Optimizer for three months.

However, there are places where Omniture shines. “Google Analytics does a terrible job with segmentation,” Holstein said. “Omniture is far superior. Their tool, Discover, lets you do segmentation and correlation on the fly.”

Omniture is also real-time, with updates to its data within minutes, whereas Google uses once-a-day “batch processing” to update the information. “If you want to know how you are doing today, you have to wait until tomorrow,” Holstein said.

Google Analytics does have a cost but, rather than dollars, marketers that use it correctly expend sweat equity. Peterson recommended that companies that have decided to go with a free solution “need to work overtime to be successful in Web analytics.” He also said that companies that choose to use free solutions “should seriously consider using the money they saved on technology to hire smart people” whether it is a staff hire or a consultant. “You have to do one or the other,” he said.

Finally, he said that companies that are serious about doing Web analytics but are not able to commit the necessary resources needed to use a free tool successfully “should consider buying.”

“The Web analytics vendors like Omniture, WebTrends and CoreMetrics have spent a lot of time and money to put together service organizations that can offset to some extent dedicated resources and the ‘work overtime’ commitment,” Peterson said. “I’m not saying for-fee solutions are necessarily better than free solutions, but before any marketers commit to either, they have to think about how they will use the technology successfully.”

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