The web analytics industry has been marked by a growing amount of activity in the US in recent years. Since 2001, three major businesses have changed hands for more than $400 million in total, and Microsoft has made a "significant investment" in a fourth. The size of the deals underlines the increasing importance of the industry.
The news will come as no surprise to traditional marketers who have been watching the growth of the internet as a sales tool over recent years. But for CEOs and sales managers who have yet to benefit from the power of online marketing, it should emphasise the value of web analytics as part of a serious internet marketing strategy.
Web analytics from dotcom boom to resurgence
It is also unsurprising that the biggest deal in the web analytics industry so far came when WebTrends, an Oregon-based internet market research firm, was acquired by Internet infrastructure firm NetIQ Corp for $148.2m in the aftermath of the dotcom boom.
As internet businesses fell out of fashion, rival WebSideStory floated on the stock market in 2004 and its shares "only" raised $58 million. A year later, WebTrends was bought by a private equity firm for $94 million – two-thirds of its 2001 value, but still a significant sum.
Another web analytics company, Omniture Inc, raised around $120 million from a stock market float in 2006. And WebTrend's owners have hinted that they may sell it again following what Computer Business Review called a "recent resurgence of interest in hosted (on-demand) web analytics."
Microsoft gets into web analytics
Clearly, a lot of people think there is money to be made in the web analytics business – not least Microsoft, who announced in 2006 that it had made a "significant investment" in DeepMetrix – yet another company dealing in web analytics and other online marketing tools.
Not content with that, Microsoft then signed a "multi-million a year contract" with WebTrends, ostensibly to improve its adCenter, recently re-launched internet search engine, Office Live and MSN offerings.
The draw for companies and investors sinking money into companies like WebTrends and WebSide Story is the ease of measuring web analytics and the wealth of data it brings.
Benefits of web analytics
Compared with analysing the success of a TV marketing campaign, which takes focus groups, surveys, several months and still only produces "best guess" results, web analytics provides instant, accurate metrics to judge the return on investment of a web marketing campaign.
With a little further analysis, web analytics almost tells a marketing manager where to spend the next part of their budget to make it most effective. And, of course, with internet advertising growing faster than any other medium, the measurement of it is a growing business too.
Web analytics and the WebMarketing Group
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