2006 and all that

Yet again another year whizzes by and we end up another year older and hopefully another year wiser. At this time of year there is only one thing for it; a spot of reflection and prediction.

I always say to people that building an online marketing analysis and measurement capability is a journey and not an event. You don’t, one day, suddenly start “doing web analytics”, you build up a capability that develops over time. I describe that journey in three stages.

1. Building a performance tracking capability
This is the process of getting the right numbers right, counting the things that count, developing KPIs, distributing key reports that tell you how you doing and whether you are meeting your goals or not.

2. Process analysis and optimisation
At this stage, organisations are using their measurement systems to understand and optimise key business processes, such as acquisition and conversion. They are using additional tools such as A/B and multivariate testing. They are thinking more strategically about site design, developing key customer journeys and segmenting their visitor base.

3. User centricity
In the final stage the focus of the organisation shifts from the site to the user or customer. Retention as a process becomes more important and as a result site behavioural data needs to be integrated with other data sources and other marketing technologies. Metrics for customer loyalty and lifetime value become KPIs. The online channel is an integrated part of the multi-channel customer strategy.

Here in the UK, a lot of companies are still in the first stage. Many organisations that we speak to and work with are in the process of more clearly defining online goals and objectives and putting in place the metrics and systems to measure them. For large, complex and global organisations this is a process that can take months. Many companies are upgrading their web analytics systems to give them the sound tracking capabilities that they need to and to give them a foundation for the next stage of growth.

That growth will come from ironing out the inefficiencies in their marketing processes and working smarter. This is the second stage of the journey and my perspective is that this is where the US market is at the moment. Investments have been made in systems and people and those resources are being put to work. It’s been a strong year in the US for marketing technologies such as behavioural targeting and multi-variate testing.

My view is that in 2007 we will start to see adoption of these types of capabilities by more forward thinking companies in the UK. Obviously there are already many European companies who are already pushing the envelope when it comes to using data, insights and technology to make significant improvements to their online marketing processes but they are relatively small in number. I think that in the UK in 2007 we will see more evidence of more companies looking to do the same. US vendors in that space are already looking to these shores.

I think that in 2007 we will also see more focus on retention as a marketing process with organisations looking to understand and manage concepts like customer loyalty and what that means in today’s multi-channel world. This will result in more focus on “data interoperability” i.e. the need to have various marketing technologies speak to one another and for data on customer activity to be shared. 2007 could be the year for many organisations when the world of online marketing emerges from its silo and takes up its role as a vital component of the total customer marketing mix.

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