Analytics and … investment banking?/
August 31, 2006
For the second time in a month, an investment banker called me to talk about web analytics. What with mergers, acquisitions and IPOs (and of course, the development of the industry), it’s on their radar now.
His questions were so interesting, I wish I had been taking notes like I was when the big WA firms spoke at the Summit in Santa Barbara. In any case, here is what I can remember.
Investment Banker starts with an easy question: Who is the best customer for packages like CoreMetrics and WebSideStory and Omniture?
Robbin: E-commerce. Companies who sell on line can prove the ROI of the package quickly, although they have plenty of issues with multi-channel purchasing – the customer sees it on the web and buys it in the store. Companies who are doing lead generation have a harder time proving the ROI (Robbin neglects to say, especially when the company has to touch the lead many times before the sale is closed.) Companies who are doing on-line content, like CNN and the NYTimes.com, should be able to prove the same kind of ROI as an e-commerce company because they are selling online, it’s just that they are selling advertising.
Investment Banker: What will it take for WA to become more pervasive?
Robbin: People really won’t buy *and use* their web analytics until it is in their financial interest. So if you’re a content site, and a big advertiser comes to you wanting a deeper understanding of your reader behavior before signing a new contract, suddenly, it’s in your interest to have better analytics.
Investment Banker: Research firms are predicting that the WA space will grow to about $1B in five years in marketing capitalization. Do you think that’s enough marketing cap to support the number of current WA firms or will we see lots of consolidation?
Robbin: After business school, I went into direct marketing, not investment banking. You can run the numbers as well as I can or better.(Why do investment bankers waste time asking questions that they are in a better position to answer?) From where I sit, I just know that I would *love* to see consolidation in the industry so that we can do a better job with standards and so that my company doesn’t have to keep learning new software packages. Probably not the answer he wanted to hear.
Investment Banker: Which of the big firms have done a really good job investing in cutting edge technology, enabling themselves to leapfrog the competition?
Investment Banker: Will BI firms get into the WA game?
Robbin. Sure. But the really important thing that will happen is, data will be more seamless, so that it can flow between your BI and WA and CRM. Easily, not with a 4 month integration project.
It’s probably just as well that I can’t remember everything we talked about. Leave the guy something to write about in his research report, now that my four readers have all learned what I said.