Free Google Service Helps Watch Your Words

There Google goes again, applying its special blend of category-disruptive dynamite to another part of the search marketing industry. This time the explosion has occurred in the Web analytics arena, with an announcement by the Mountain View CA-based engine that it will let Web advertisers and the Web publishers in its AdSense network access some basic Web tracking tools for free.

The Google Analytics offering is a hosted service built on Web analytics software from Urchin Software, which the company bought in March with the expectation of adding some of its offerings to their analytics tool kit. A mid-step in that integration occurred earlier this year, when Google cut the monthly price for Urchin’s services from $495 to $199.

“We want to give all online marketers and publishers access to powerful Web analytics to help them better understand what their customers want,” said Paul Muret, Google engineering director, in announcing the new service. “With this knowledge, businesses can create more accurate advertising and build better Web sites.”

Google Analytics integrates with Google paid-search AdWords program, but it can also monitor ad and Web page performance on other ad networks, including those from Yahoo! and MSN Search, the company said. The software uses a small Javascript file to tag keyword destination URLs and imports keyword costs. As a result, advertisers should be able to track both user clickthroughs from ad to landing page, or within Web sites, and their return on investment for those keyword terms.

Among other things, Google Analytics is a bid to win the loyalty of small to mid-sized Web marketers—advertisers whose small budgets may not let them outsource their search engine marketing (SEM) or hire a third-party service to track how well their ads are performing. Monitoring results is crucial to these advertisers; they can’t afford to waste money on under-performing search terms. But as SEM sessions at both the DMA05 show in Atlanta and Ad:Tech NewYork recently revealed, many of these small merchants have been at a loss on where to find robust tracking tools for a good price. Many have relied on the more basic free but network-specific applications offered by both Google and Yahoo! Some reportedly don’t even feel comfortable using those, leaning instead on the bare-bones functions that came with their Web hosting packages.

Besides measuring the performance of paid search ads, Google Analytics is able to monitor banner and display ads, e-mail newsletters, referral links and organic search. The aim seems to be to give marketers more robust tools with which to measure their ad performance in the hope that they will pour more of their ad dollars into what they discover works—namely online ads, where Google is a pre-eminent vendor.

Google’s move to a free analytics offering should shake up a couple of different markets. First, it may prove a disruption to the search industry itself, where Yahoo! sells a similar hosted click-tracking service called Marketing Console for $149 a month. MSN’s adCenter, now in a U.S. beta test, will give advertisers more visibility into keyword demographics both before and after they bid, but does not offer the same abilities to track where Web site visitors are coming from and at what point they’re leaving a site.

Another tremor may be felt in the third-party Web analytics industry. Companies such as Omniture, Coremetrics, and Web Trends earn part of their revenue from hosting Web metrics or selling packaged software for tracking online performance. The Google free service will probably put some pricing pressure on their products; the day Google announced its move, the share price of analytics provider WebSideStory declined 12% on the Nasdaq.

If the Google Analytics offer catches on, that could lead these companies to cut prices for their own hosted services or to shift emphasis from their measurement platforms to their consulting and professional services— higher levels of strategic support that Google does not offer (yet) and that hold more appeal for big-ticket Web metrics customers.

Web publishers will most likely appreciate the new free service and apply it liberally. But Bryan Weiner, CEO of SEM firm 360i, points out that some online advertisers—particularly the large ones whose budgets will cover an independent Web measurement service– may steer clear of Google Analytics from a wish to keep Google in the dark about how well their ads programs are performing.

“For large advertisers, it’s allowing Google to get much further into their kitchen,” he says. “There’s some concern about having the same company that you buy advertising from track the performance not only of their ads but of everybody else’s ads.”

Weiner says early conversations with his firm’s large paid-search clients have indicated they’ll choose an independent, non-affiliated site analytics provider to tools supplied by any of the Web publishers—including Google, Yahoo!, or MSN.

The new tool may not be a benefit to small search marketers either, if they use it to track ad performance across other formats or on other providers’ networks, Weiner adds. If you don’t monitor ad performance across all your channels, you’re taking a guesswork approach to search marketing, he says. But if you watch all those networks using Google Analytics, “You’re allowing a company from which you buy a lot of advertising to have insight into how effective the ads you’re buying from them are in absolute terms,” he says. “More importantly, you’re giving them insight into how their ads work relative to all other forms of advertising. That may not be such a good idea in the long term.”

For the record, Google said it would only report campaign data to users of its analytics tools and would not use that information to give the Google AdWords network any kind of competitive edge.

There’s also the chance that portions of the Web user community (the most digitally literate ones) may choose to resist having the Javascript tags placed when they visit a Web site, undermining the value of the measurements. Within 24 hours of the Google announcement, bloggers began linking to a post by consultant Amit Agarwal that teaches how to make your Web page visits invisible to Google Analytics with a line of code inserted into your Windows hosts file.

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