Every business today depends on some kind of online presence, and an increasing number of businesses are entirely online. These businesses often generate large volumes of Web data whose analysis is crucial to the success and growth of the company.
For most online businesses, technology is a key part of the value they provide and of their differentiation from their competition. For them, using an off-the-shelf tool like Google Analytics falls far short of what they need. Let's examine why:
Google Analytics and similar tools provide aggregated reporting on what content is being viewed by how many visitors, time-based summaries and comparisons, how visitors are getting to your web site and where they go from there. Most also keep track of visitor actions, such as how many visitors clicked to download a white paper or responded to an ad.
Web analytics tools also look at everything from the point of view of the website, and specifically provide a "page-based" view of the data. This helps you understand things such as which pages are of most interest to the most people or overall traffic trends, but it doesn't give you a view from the visitor perspective. This means you can't answer questions about particular customers of a group of customers.
The other key point is that aggregated data provides limited information and therefore limited value in terms of understanding visitor behavior, in order to optimize your website or increase sales. Most organizations quickly get to the point where they realize that this limited aggregate reporting is insufficient to answer many important questions that impact the business – such as "what are the characteristics of my best customers, and do my best customers use my web site differently than other customers?" " Can I predict from what visitors do who is most likely to move from a lead to a customer?"
Without access to the detailed data, or the ability to do custom queries or analysis, you can't do the kind of ad-hoc analysis and iterative analysis that usually provides the real value and insight. (You can read the case study of a global retailer who is using Infobright specifically for sophisticated predictive analytics). In addition, you also have no ability to combine the Web data with other data you collect such as CRM data, sales data, customer information etc. that provides much more value than web data alone.
Online businesses therefore typically develop custom applications and data repositories using technology foundations such as analytic databases like Infobright, data integration tools, with a custom front-end application. or use a business intelligence software to create reports, dashboards and other user-facing front ends.
Infobright is particularly well suited for these online analytic use cases, demonstrated by the large number of online businesses using it as their database foundation. You can read some of these case studies here:http://www.infobright.com/Customers_Partners/Customers/
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On Sept 23 the new movie "Moneyball" opens throughout the US. As those who follow baseball know, it is the story of how the general manager of the Oakland A's, Billy Beane, used analytics to help his team compete against the teams who could afford to spend far more on players (such as the Red Sox, the Dodgers, and my beloved Yankees.)
Of course it is true that statistics have been a major part of baseball going back over a hundred years. According to a reference in Wikipedia, "The practice of keeping records of player achievements was started in the 19th century by Henry Chadwick." Baseball general managers and scouts have long used player statistics as a basis for establishing a player's value, and to determine the make-up of their teams.
What Beane and the Oakland front office demonstrated in 2002 was that much of the conventional baseball wisdom as to how to determine a player's value was inaccurate. They were the first to use rigorous statistical analysis to determine how to more accurately assess value, and thus they were able to compete effectively against richer teams.
The competitive advantage they gained could not last of course. Other teams caught on and began to invest heavily in this new Sabermetric approach. Today, many teams have full time Sabermetric analysts on board and the number of statistics being kept and the type of analysis being done is incredible.
Some interesting lessons come from this story. The most obvious one is that analytics can provide a strong basis for competitive advantage. The second is that after a bit of time, you can expect your competition to use the same analysis to even the playing field.
The other one that strikes me is that you can generate lots of statistics that turn out to be less important that you think – and the hardest part of the search for truth is to figure out what to ignore. Through the process of investigative analysis, with the ability to quickly drill down into masses of data, you may just find what you didn't know you were looking for.