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Wednesday, October 25, 2006

Clicktracks Not Struggling: CEO

Crow still isn't tasty, no matter what anyone might tell you. Doesn't taste like chicken. Doesn't taste like the egg-white wrap my Zone Diet wants me to eat today. Definitely does not taste like the traditional French fish soup (haute cuisine version, with tiny baby squid) I had at Gamelle on Saturday night when Carolyn and I celebrated our seventh wedding anniversary. (See John, I'm trying to get a little personal touch in there so you'll feel sorry for me for writing like such a chowderhead last week. Next time you're in Toronto, I'll take you for a bowl of the fancy fish soup. It's delicious.)

In a recent post I looked at the potential for Google's Website Optimizer product to drive down pricing in the "multivariate testing space". One thing that stood out in my mind was the aggressive comment in Google's press release that essentially said you don't need professional services to implement these tests - that the product makes it easy. Well, as anyone watching closely would realize, the "multivariate testing space" is very small and nichey. A possibly limited Google free product probably doesn't do much to consultants in the space who have their own products - because those consulting relationships are highly customized and don't compete with Google much. Google may be *trying* to compete or influence the marketplace, but most of all, of course, it's just trying to sell more advertising.

As an offshoot of that discussion, I mentioned that analytics software companies were probably finding it tougher going now that Google has a free Analytics product. Now, I don't expect every owner of a competing analytics company to call me up and tell me if they *are* struggling - I'll bet some are, if their pricing was in the stratosphere, especially. John Marshall of Clicktracks did call me to remind me that Clicktracks is indeed doing better than ever, revenue-wise. It is, if I may boil down the conversation, based on one simple fact: Google's product isn't better.

In general I think it's the case that convoluted, overpriced solutions will go out of business if Google and/or Yahoo offer similar stuff; and if they don't go out of business, then they'll definitely have to differentiate themselves in some way.

To another issue in the analytics space: users will often install multiple products. We've certainly seen that. Talking with Richard Zwicky of Enquisite, a startup in the category, I heard about his idea that an Enquisite install could include a complementary free version of *another company's* log analyzer, so the user would have a fuller range of reports to draw on. I thought that was great thinking. As a consultant, I know that you have to jump through some hoops in many organizations to get code installed. Why not have that single install cover multiple products so a range of reports are available... so you don't have to go back and get buy-in for another install?

As someone who both writes and analyzes the space, and watches clients struggle with analytics decisions, I see the marketplace and the social hierarchies of companies sending a lot of mixed signals. Companies seem cheap with budgets in some areas, and then overspend in others. Individuals are jealous of turf, or unresponsive. Consultants and agencies want to adopt a narrower range of solutions, to reduce learning time. Clients want simpler reports. Clients want no reports. Clients want more complex reports. Clients want better ROI. Clients want someone to tell them what they want.

It's natural to speculate that in this miasma, free products will take market share from expensive ones. But at many levels that has proven not to be true. Free products won't *always* win if they're not better. But won't they win some of the time? Sure.

I think one thing Clicktracks' success might underline, actually, is that their growth occurred because they were nimbler and cheaper than many competitors. They actually grew because they competed on price as well as features and service. So is it so wrong to speculate that if Google takes it a step further, and drops the price to zero, they might accelerate that trend? Perhaps not, because "free" is in a different category in the marketplace altogether. Products don't have to be free to offer exceptional value.

Finally, John and I had a quick discussion of Google's sometimes tough rhetoric that seems directed at some (not all) actors in the ecosystem - "spreading a little bleach around," was how he put it. This is something we agreed that we actually like. Google's statements about product offerings and facts in the marketplace are sometimes a bit sharper and a bit more intellectually tough-minded than one might expect. The first example is in the multivariate testing space. Google's product overview states concisely why the buzzword "Taguchi" testing is overhyped, and why certain simpler forms of multivariate testing will do. Kind of quietly challenging the mysticism being spread about in that space. Another area Google's been tough on has been misleading facts being spread by the purveyors of click fraud assessment tools -- Google reminds the marketplace that some of the statistics being spread around about click fraud percentages irresponsibly include clicks that Google doesn't charge for, because their fraud detection systems catch them. Indeed.

All in all, a none-too-tasty bowl of crow for breakfast (maybe this Hallowe'en-sized pack of Smarties will make the taste go away), but in spite of this, it's always a pleasure exploring industry trends with John Marshall, a real thought leader in the web analytics and related industries. In case there is any lingering doubt, he's not going out of business. And it's for that very reason that J.L. Halsey paid a premium price tag to acquire Clicktracks, which is doing just fine, thanks.

Posted by Andrew Goodman




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