If you missed it yesterday, please check out Part 1 of Compete’s interview with author, blogger and analytics evangelist Avinash Kaushik, which discussed Web Analytics 2.0 and the best tools to use, among other things.

Are free tools really all that a company needs? When should you pay for premium content?

No.

Scared you, did I not? :)

No, free tools are not all that a company might need. I covered some examples in a previous answer about cases where you might want to get a paid solution. Here is one more scenario, you really want to create a data warehouse environment where you merge your web data with the rest of your company data. In that case I would just go with Unica because it makes it easy to get a standard data model and provides an easily organized output that you can plonk in your data warehouse or in front of your BI tool.

What is important to realize that as Marketers / Website Owners you don’t have to live in a data famine, you don’t need PhDs to use web analytics tools, you can do an astonishing amount of tracking and analysis with even a free tool. Zero barriers to you becoming smart. So start there. Then let your needs evolve you into the right paid solution.

Here is my recommendation for a process: How to Choose a Web Analytics Tool: A Radical Alternative

How can organizations encourage more of their employees to use analytics (especially when they’re already paying for the solution)?

I recently wrote a post that focused on just this topic (and pointed out why Analytics is like Angelina Jolie!). Here were my recommendations:

1. Do Something Surprising: Don’t Puke Data Out.
2. Start With Outcomes / Measuring Impact, Not Visits.
3. Create Heroes & Role Models (and no, not yourself, put your red cape back).
4. Web Analytics 2.0 Baby! Use Your Customers & Competitors… :)
   
   

5. If You Want Excitement, Make It Fun!
   Hold contests.
   Hold Internal “Conferences.”
   Hold Office Hours.

Let me touch briefly on one of them here, Outcomes.

I find that most Analysts focus on visits and visitors and time on site and page views and what not. There is nary a sight of Outcome. I always implore them with this: “A million people came to the website, so what the heck happened? Did we make money? Did we create satisfied customers?”

Tying things to Outcomes means that people are focusing on things that matter, to their company (revenue), to their customers (satisfaction, net promoters), to themselves (bonuses!!!) - That is the key to your success.

How can people best use behavioral segmentation when gathering competitive intelligence?

Segmentation is key to truly finding any insights from your web data (be it yours or that of your industry/competitors). That’s because unlike old channels the web is used by a much more complex set of your customers and for solving many different types of problems those customers have.

We are quite used to using behavior as a key segment for our offline channels, think TV. Applying some of the same approaches on the web can be instructive.

Some of the ones I find to be insightful are types like: “people who visit this site also visit that,” “people who use these keywords also look for those other things or end up at these places,” “here are the clusters of behavior that are becoming more prominent in people who visit the biggest site in the industry,” etc.

What’s your perspective on capturing the voice of the customer using web analytics?

It is quite simple really: If you are not doing this then you will not be successful. You might not quite die, but you won’t come any where close to being as big as you potentially could be.

There are so many limitations to what you can do in response to your customer needs offline, many of those disappear online. You can respond to segments of your customers (say using better content targeting systems), you can involve them in identifying the right pricing structures or the optimal website experiences (using experimentation and testing systems), you can get them to identify the core things you stink at on your website (using surveys), you can get them to help themselves by improving your tech support websites, and on and on and on.

If you don’t, at the minimum, have at least a simple but effective survey listening mechanism (like 4Q) and you are not doing at least A/B testing (using free tools like the Website Optimizer) then you are not playing the “online game” as well as you can. And you can bet your competitors will get ahead of you.

The web is a rare medium where you can truly practice customer centricity. It is time to shift the power away from the HiPPOs (Highest Paid Person’s Opinion) in your company and to your Customers. Do it, you’ll love it.

What’s the most surprising thing you’ve discovered using Web analytics?

How very wrong we are about what our customers actually want / need.

Or put another way, overlaying our own intentions and our experiences on top of the clicks data is a huge mistake. Because we are not the customer. We need to involve our customers and listen to them to truly understand how best to interpret the massive amount of data we have.

And here is another fun thing: The web, through analytics, is amazingly awesome at getting out there fast, with mostly baked ideas, take a risk and learn very quickly. Traditional Marketers are deeply risk averse because it takes too long to find out you made a mistake.

Consider a catalog for example. You make a mistake and it will take three months to find out (from idea conception to approval to printing to mailing to customer reaction to you finding out). On the web you can find that out in less than 24 hours, because you have access to all the wonderful analytics data!

Who should we interview for the Compete Blog next?

My good friend Mitch Joel (wistimage.com/blog/). I don’t know of anyone else who has a better handle on all things Social Media and Web 2.0 and Marketing 2.0 and how the web is fundamentally altering our lives. He is a true evangelist, and a fantastic speaker to boot.

For five years Compete has invited marketing pioneers from across the US to participate in its annual Client Forum. Among this year’s presenters was author, blogger and analytics evangelist Avinash Kaushik. He entertained and educated us on how to turn web analytics into actionable insights. I decided to interview him for the blog to share what we learned with anyone that could not attend.

During the Compete Client Forum you spoke about the flaws in just using traditional metrics for measuring online marketing and the critical need for marketing strategies to deliver actionable insights. What are some of the pitfalls that online marketers fall into?

The biggest one is that unfortunately a lot of online marketing remains a faith based initiative.

In one of the most data rich environments in the world, the web, faith based initiatives are a sub optimal outcome.

The flaw is less that Marketers are using traditional metrics, it’s more that the world view of what should be used and what might provide the most amounts of insights has been severely limited.

The web is astoundingly measurable, and while it is not perfect, the insights that you can get from your web data far surpass those you can get from any other channel. At a very low cost to boot!

Here’s an example: Just compare the measurement of success of a GM Chevy advertisement in Time magazine and on Chevy.com (or a banner running on yahoo.com). In the former case you know how many subscribers Time has and you also know how many people buy it. At best you have a measure of possible “impressions”. At best. Now in case of the latter you know exactly how many people saw it, how many interacted with it, how many go to the site and maybe configure a car, and… a lot.

Online Marketers have just started to understand the power of data on the web, the onus is on all of us to lean, make things easy, and show much more of the web is accountable.

What is Web Analytics 2.0?

Traditional Web Analytics was all about clickstream data. Log files. JavaScript Tags. HITS, Visits and other such nice stuff. It helped us progress to understanding What was happening on our websites.

But even though we all did our best it did not yield the kinds of insights that would be actionable and, dare I say, earth shattering.

The problem was that all that data was sub optimal at explaining Why. And that right there was the key.

Without the Why, the What is not very actionable.

So a little while back I proposed Web Analytics 2.0, the next generation approach towards getting both the What and Why answered. Here is the official (well my) definition:

Web Analytics 2.0 is:

1. The analysis of qualitative and quantitative data from your website and the competition
2. To drive a continual improvement of the online experience that your customers, and potential customers have
3. Which translates into your desired outcomes (online and offline)

More at webanalytics20.com.

Everyone is making promises around their Web analytics solutions — what’s the bare minimum that should be included?

Here is the great thing, 80% of the data you will get out of any web analytics tool is the same. So it would be really hard for you to screw up.

The bare minimum that is included probably should be the 80 or so standard reports that you’ll get out of the free Google Analytics solution or the free Yahoo! IndexTools solution or the one from Microsoft. That means reports that show you traffic sources and keywords, allows you to track your paid search campaigns as well as organic traffic, easily illustrate what content is consumed and is of value (and what content is yucky and bounces traffic!), the ability for you to segment your data (at least to some extent), empower you to track rich media (flash, ajax, video etc) without having to create fake page views and of course finally a full complement of ecommerce tracking.

You can get all that for free now, so when you buy a solution it is a good idea to request that you get more than everything above.

And you can. For example some of the paid solutions provide a great ability for you to bring complex sets of data into the tool (beyond clickstream), others thrive on their ability to bundle testing solutions, others still provide you the ability to truly do some amazing and advanced segmentation.

Identify your needs, make sure you are not paying for features and data you get for free, then buy the tool that is right for you.

Here is a post you might find relevant in that process: Web Analytics Tool Selection: Three Questions to ask Yourself.

What are some of the free analytics tools that you use and like?

I have eight tools on my blog. I guess I am “special”. :)

I use Google Analytics and IndexTools amongst the free more widely used tools. GA is simply the most easy to use tool and I am simply loving how people are creating plugins on top of it (like the one report I really wanted “What’s Changed”). IndexTools is so great to create custom reports, when I have a fast question I just throw the Metrics and Dimensions on a “page” and boom (!) I have what I want, ten seconds!

I also dabble in ClickTale and CrazyEgg. They both have free versions and while they don’t have the depth of standard WA tools, each answers an interesting question uniquely.

While it is not free I am rather fond of ClickTracks. It is not very expensive. My fondness is because for such a low price I can get infinite segmentation capabilities (some call it “n dimensional” segmentation) and also the ability to “reprocess” data.
Now I don’t really need to do that on my blog, after all it only gets 45k Visitors a month, but it is fun. :)

Stay tuned for more Q&A with Avinash…

For the past year I’ve offered analysis on this and other questions relating to the ongoing presidential election. I recently had the opportunity to speak on the topic at Compete’s Client Forum. I was privileged to have been joined on the stage by Evan Tracey, COO of TNS Media/CMAG. Those that follow the election have likely seen Evan on the major news networks providing insight into how the campaigns are spending their advertising dollars.

I started things off by presenting data to highlight how the Internet landscape has been transformed in the four years that have elapsed since we were discussing Swift Boat Veterans and President Bush’s National Guard service. At this time four years ago, the words facebook, twitter, youtube and flickr had yet to enter our lexicon. These sites, as well as their rivals and imitators, have seen incredible growth in a short amount of time.

As voters have gravitated to these sites, the candidates have rushed to embrace the platforms as tools to more effectively engage and organize their supporters as well as solicit campaign contributions. All of the major candidates made at least a cursory attempt to have a presence on these social networking and video sites this election; however, the Democrats have far exceeded their cross-aisle rivals (Ron Paul’s efforts being a noted exception) in leveraging the power of these tools to their advantage.

Compete’s FaceTime metric looks across candidates’ official websites, social networking and video sites to assess the degree to which the candidates have used these new channels to earn time with voters. The data suggests that Barack Obama’s online advantage was evident a year before the first votes were ever cast, giving him the financial muscle and breadth of support to compete against Hillary Clinton’s presumed inevitability.

In contrast, the race among Republicans was much more fluid, with John McCain wining despite an apparent lack of a cohesive online strategy. McCain’s nomination seems in large part due to social conservative infighting, and specifically the right’s failure to coalesce around a single candidate.

All this online time with voters indeed matters, not only at the polls, but particularly at the coffer: Roughly 80% of the $131 million Barack Obama raised during the first quarter was raised online, compared to less than a quarter of McCain’s modest $38 million in total contributions.

While huge amounts of money are being raised online, Even Tracey detailed the fact the very little is being funneled back to the web in the form of advertising. In the world of political advertising, TV still reigns supreme.

Since the start of the current race for the White House in February 2007, $238 million of television advertisements related to the presidential race have aired. Well-funded Democratic candidates and Democratic-leading special interest groups have outspent their GOP rivals by a more than 2 to 1 margin. During this time, only $4 million has been spent online, mostly by the candidates to solicit campaign contributions and drive grass-roots efforts.

For all the attention the web has received over the past decade, campaigns continue to view TV as a more efficient means of informing and influencing voters, particularly those that are undecided about who to support. CMAG forecasts $3 billion will be spent on campaign advertising this election year across the various presidential, state and federal races both by candidates themselves, their respective parties, as well as well-funded special interest groups.

Evan also noted an interesting relationship between the timing of political advertising and the number of undecided voters these ads reach. As the majority of advertising occurs 60 days before an election, the marginal cost of influencing voters climbs dramatically as these ads chase a dwindling number of undecided voters.

While the power of the web from an organizational and fundraising perspective has been made abundantly clear this election, judging by where the candidates are placing their advertising bets, campaigns remain skeptical of the web as a medium for finding, let alone influencing prized undecided voters.

To political junkies and novices alike, I’ll pose these questions, and welcome your responses:

• How can the GOP compete with the Democrat’s online muscle?
• Are online political advertisements effective?
• Will facebook and MySpace supporters turn out to vote in November?