Why do Google, Yahoo, and Microsoft have Web Analytics Platforms?

Yahoo joined the group last week with the announcement to acquire IndexTools and today will be announcing it will be offered free to partners & clients. Google started the trend with the purchase of Urchin, which has morphed into Google Analytics, which is also free. Microsoft AdCenter Analytics, formerly known as Gatineau, is in beta stages currently with early reports showing many valuable and unique segmentation/demographic reports. AdCenter Analytics is also free.

Yahoo always had an analytics tool built deep in their Search Marketing suite, but it was mainly for a deeper analysis of your PPC performance only (I speak from legend, not experience). The big ‘ta-da’ was seeing “assists”, the previously searched keywords that introduced the user to your website prior to when they finally made that conversion. Either it didn’t catch on or wasn’t scalable outside of PPC and now it’s been replaced with an industry leader. So why the race to provide free analytics tools for customers? IMHO, to increase their media spend:

  • Competing on analytics is the future of paid search (and all digital media). There is only one 1st place ranking on “auto insurance”, which causes CPC prices to continue to rise. Direct marketers must go deep in data analytics to measure the ROI and in turn, their budget limits. These engines are providing the data to show you the value in your media buys and hopefully take media from less efficient venues (i.e. newspaper/tv).

  • SEMPO’s Annual State of Search Survey 2007 asked "How would you likely react to a hypothetical scenario where the cost of Paid Placement steadily increased for the next two years?” The top response: “Improve Site Conversion Efficiency”. How do you measure site conversion efficiency? Web analytics, of course. What happens when you improve site conversion rates? You can spend more money on media, especially on expensive terms that historically have not converted.

  • Yahoo is a very large media network, with IndexTools customers will have an all-in-one ‘data-warehouse’ that should show the interaction of display and search buys. In addition, a search engine would be able to see domains (websites) sending large volumes of traffic (and conversions) and may add them to their networks. More quality traffic = more media spend.

  • Search engines (may) want client conversion data. If I were Google, I’d love to know which keywords were most profitable for clients and HYPOTHETICALLY capitalize on these strengths by raising minimum bids. There is no evidence of this, but it’s a concern of many.

  • Search engines (may) want competing engines’ pricing. If I were Yahoo, I’d love to know that top spots for “auto insurance” were going for $25 per click on Google when only $8 on Y!, because HYPOTHETICALLY, I’d could set minimum bid prices or change my quality score to factor in bid price a bit more than normal. Engines could also look at comparative natural search volumes by engines to help reverse engineer competitive ranking factors or improve their own. There is no evidence of either example, but it’s a concern.
Whatever the reason for the trend, it was solidified today… Building or buying, search engines are offering free web analytics platforms to clients. Hey Ask.com, where you at?

Posted by: Jeff Campbell, VP Product Development & Innovation


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