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Software, services determine online ROI

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Strange things happened on the way to developing tools that would show the return on investment of your Web site.

Marketing goals came into conflict with computing priorities. Short-term goals began fighting with long-term desires.

What were once called "Web log file analysis tools" became expensive, powerful software capable of measuring your off-line and online ad efforts. They can become the heart of your marketing efforts, if you can afford the time and money to buy, install and manage them.

But now you don't have to buy software to get many of these benefits. Primary Knowledge, New York, is offering the capability through outsourcing, while eAnalytics, a new offering from AdKnowledge, Palo Alto, Calif., offers it in conjunction with ad serving.

Good reports

You can get a good Web site report by buying software, buying a service or moving your Web ad serving.

Buying and installing software may be the most fundamental change you can make, says Bill Piwonka, a product manager at WebTrends Corp., a Portland, Ore.-based software maker, and it holds the greatest long-term promise.

"Even for a medium-sized corporation, the Web server is just one part of the e-business system," he says. The e-business system also includes servers for streaming media, fire walls, e-mail, databases and intranet proxies--WebTrends' software lets you measure all of them.

"Don't base ROI just on what's on the public Web site," he says, adding that by measuring everything, you have a more complete picture of your electronic business.

But you may lack authority to order a revolution, so WebTrends' latest product, CommerceTrends, has a more modest aim, to let you calculate the ROI of marketing campaigns used to drive people to your Web site.

"It translates traffic into forecasted revenue for true ROI analysis," Mr. Piwonka says.

You might also get that kind of report by switching to AdKnowledge for your ad serving. The company is combining data from a ratings panel of 30,000 Web users with its own data warehouse to deliver new services under the eAnalytics label. The panel, from MB Interactive, San Francisco, delivers demographic and behavioral data that lets AdKnowledge's Voyager Profile describe just who is being exposed to your ads, says Steve Findlay, VP-eAnalytics.

Another new service, called DataDNA, uses AdKnowledge's data warehouse, where users are identified through tiny files called cookies, "to piece together what users do over time in reaction to an ad," Mr. Findlay says. "This can help you answer what's the right frequency for an ad."

DataDNA can also measure the branding impact of your ad on people who don't click through to your site. "By piecing together their activity and looking at tracked advertising to see if they appear later, we can measure the value of the reminder," Mr. Findlay says.

While AdKnowledge hopes eAnalytics makes the company more competitive with ad networks such as DoubleClick Network, New York, Primary Knowledge is focused entirely on giving reports, says Primary Knowledge CEO Peter Adams. The company moves your logs into its data warehouse, to which you log in through its extranet for queries and reports.

"We're collecting data about all types of e-customer interactions," Mr. Adams says, "including all kinds of online advertising, Web site interactions, interactions with e-mail and even off-line interactions like direct mail and call center data. We then provide a focused, decision-ready report and analysis tools that help quantify all your ROI."

Integrated databases

Software programs written originally to analyze traffic on your Web site have grown in complexity and ambition. The goals now are to deliver reports on all servers and ad buys.

Most of these programs are priced based on the size of the files you have and the number of servers to be analyzed. While $10,000 is a good starting price, the software alone will usually cost at least $25,000, and then it has to be installed and managed to be useful.

"The log file is still the core, but other data, including customer data from other systems, goes into the report as well," says Joel Yaffe, an analyst with Giga Information Group, a Cambridge, Mass.-based market research firm.

Gradually, these Web site analysis products are becoming decision support tools, says Donovan Gow, a research analyst for the Aberdeen Group, a Boston-based market research firm. "The general view of most traditional decision support players is that the traffic analysis companies aren't doing something that robust," he says.

But that will change, Mr. Gow predicts, and the most successful makers of site analysis software will, like net.Genesis, Cambridge, Mass., "aggressively tie into other data sources."

Steve Podradchik, CEO of Marketwave Corp., a Seattle-based software maker, explains the challenge facing his company and customers: "The Web is becoming an integral part of all advertising," so analyzing only your site is last year's news. "Tell me where I sell more, what's the business metric and how do I get more good customers." That means integrating the Web log database with all the data systems a brick-and-mortar company has.

Tools such as Marketwave's Hit List Live turn your Web logs into a database, then offer analysis software on top of it. Linking that data to other databases is done through open database connectivity, supported by all major database vendors.

How this is done, and what happens to your data along the way, varies from program to program.

WebTrends first builds a proprietary flat file, called FastTrends, for faster analysis within the software, Mr. Piwonka says, but then lets you export that data to an ODBC source.

Accrue Insight software, on the other hand, uses application program interfaces to import data from other sources, says Vito Salvaggio, VP-marketing for Accrue Software, Fremont, Calif.

Sources such as demographic data, transactions and registration information can then all go into an Accrue data warehouse, so you can look not just at online buyers, but "what you know about the customer in toto."

Little at a time

All the current and coming potential of Web site analysis tools for measuring ROI sound great, but most companies can't afford to do everything at once.

Lee Wright, president of People Design Technology, a Dallas-based consulting firm, faces this challenge every day for his clients. He recommends keeping a final goal in mind.

"Those who recognize the value of the data may be fighting so many fires, they need to outsource," Mr. Wright says. But in the long run, you've got to gain an intimate knowledge of your customers' needs to deliver your best to them, he says.

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