The market around Web Analytics has existed now for almost 20 years, taking into account the first tools that were able to measure the statistics of a website by log file-overview.
Quite a long time when compared to the existence of the Internet itself. You could say that out of approximately 21 years of Internet, Web Analytics exists for 19 years. So, almost directly after the “invention” of the web, people started wondering who is using it.
Mankind is curious
Not often have those kind of questions risen that quickly. The first car was engineered in 1886, but the first speedometer was developed years later in 1902. The first fire was aroused roughly 800,000 years ago, but there was no way to measure the temperature of it for the next thousands of years. The telescope was invented in the 17th century but it took years and years to find out what the real distance to the moon is. This list could go on for a while and I know this comparison overview is not the perfect fit but I guess you get the point.
The curiosity around the Internet is very strong and the need to know your audience is growing. The conclusion about website visitor behaviour is key today. So, Web Analytics did have an easy time in the first years, although it was “just” log files. With the switch to the Tagging Methodology it has even increased its success since you now have many more insights and details about the audience at hand, especially actions outside of your own website were now very interesting to analyse.
Future Web Analytics Requirements
The strong success of companies like Adobe (with Omniture), IBM (with Coremetrics), Webtrends, AT Internet or Webtrekk leads to questions of the general market perspective. Web Analytics is about to become a technical commodity, although it is still very much growing, especially in countries in Eastern Europe (Russia) or Asia. Noticing the strong growth you might ask where it will lead.
Two Future Scenarios for Web Analytics
While Forrester sees a coming decline in the web analytics market, a recently published market study tells a different story: within the next 5 years the web analytics market will more than double its revenue.
The global Web Analytics Market is expected to grow from $1.33 billion in 2014 to $3.09 billion by 2019, at an estimated compound annual growth rate (CAGR) of 18.3 % from 2014 to 2019. This would mean it is even stronger than the CAGR of the time between 2011 and 2015 (Web Analytics Growth Rate 2015) in which timeframe it was expected to be 15,3%. Unfortunately I have never seen a report so far that gives historical info on the real growth of the market, only future aspects and scenarios.
Top Reasons for Web Analytics Growth
Looking at the expected growth and the speed of this development we should take a closer look at the reasons behind the growing needs for Analytics. What drives this market? What drives the growth?
See my list of the Top 5 reasons for Analytics growth below – and please add your personal thoughts on this in the comments, very much appreciated.
1. Matureness of Website Owners
Website Owners understand the need to control their online-business in detail. The usage of Analytics is going to another level, in terms of seniority of users and in terms of C-Level attention.
2. Growing Market Share for Online-Business
The eCommerce and Online-Business is growing rapidly. The need to analyse this development and being able to judge and to compare the digital channels is a key aspect for Digital Analytics.
3. Developing Markets getting up to Speed
Russia, Poland, Asia, Turkey – these geographical areas have the highest eCommerce growth rates and the highest Internet Penetration growth rates since the last couple of years and in mid-term future as well. They will need to understand this development by analysing it.
4. Deep Dive in Data
I still see companies reporting on Page Impressions and Visitors. But I also see companies creating relevant dashboards with key aspects for individual hierarchy levels and direct actions resulting from these insights. These companies belong to the future.
5. Additional Analytics Capabilities
Vendors are in a competence fight around Social Media, TV Tracking, Online-Offline Measurement and/or Cross-Device Reporting. This competing, technical situation is a very good platform for additional business development. Vendors who have an ear on the market, employ competent experts and can exchange with existing professional clients will lead the pack.
While the Global Big Data Market – not surprisingly – might grow even faster (Big Data Growth). Web Analytics still is – and will be for the next 5-10 years – a powerful market to work in and to experience. Looking at success stories from different clients and industries the future of Analytics is a powerful area.
Quo Vadis Analytics?
The Web Analytics market itself is a challenging market to look at. Especially high end vendors (like the players listed above) have a strong need to justify their solution in terms of better services, better reporting and valid data as well as strong USPs. In other words: better data. The market around Analytics is now to be observed very closely and carefully: Digital Intelligence, Big Data and Marketing Analytics Automation. These areas will be driving the growth in their own atmosphere in the next years. With Analytics being the foundation for all this development.