Web Analytics Costs
Web Analytics Costs
by Phil Kemelor
29-Jun-2007
In the early days of Web analytics, pricing was relatively straightforward: you bought software, you bought hardware, got your support contract, had a few people maintaining the system and analyzing the reports, and that was pretty much it. Well, those days are long, long gone and definitely not returning. In fact, for as complicated as costs and pricing is today, it's only going to get more complex as vendors add more services and partner arrangements. Let's take a look at the elements to consider:
- Licensing
- Optional Modules
- Marketing Tool Integration
- Professional Services
- Training
- Support
- Hardware
- Human Resources
Now, let's review these items in some detail.
Licensing
There are two models available for conducting Web analytics: Software as a Service (SaaS) and licensing.
SaaS
This means that the vendor hosts the servers and software used for site measurement. This may also be known as an Application Service Provider (ASP) model. All upgrades to the basic software are typically included in the subscription fee. Pricing is based on a subscription for a set contract length, usually one to three years.
Traditional License
This means the servers and software used for site measurement are located at and managed by your enterprise. Pricing can be based on "perpetual license" terms that indicate you hold the license with no end data, or can be reviewed on an annual basis. If you own a license, you may need to pay for major new releases to ensure that you are working with a supported product.
Subscription fees and license fees are often determined by the number of page views your site generates over the course of a year (or month). In SaaS scenarios, some vendors may provide a base number of page views within the initial subscription and increase your fee on an incremental basis if you go into the next higher tier of page views. In license scenarios, vendors that review your traffic on an annual basis may also raise your license fee.
To develop this initial estimate, vendors will either ask you to provide the estimate, or ask for a sample server log file. Because it is likely that you will be filtering certain items from your site prior to any analysis on your data, make sure that you get an estimate that does not include some of these extraneous resources, such as images, frames, spiders, bots, and traffic from domains you might want to exclude, such as that of your own organization.
The number of servers and domains to be tracked will often have an impact on your subscription and license fee as well. This is an area to watch closely, especially if you plan to track hundreds of distributed sites --a scenario common among media companies, enterprises with local affiliates and outlets, and those customers that run multiple intranets and extranets.
SaaS customers will also need to determine whether there are costs related to data storage. Most vendors will store data for at least 13 months; some for the lifetime of the contract. Some vendors store raw data; some only the reports generated. You need to understand the pricing and storage format options that are available to you. Obviously, the more data you store and the longer you store it, the higher your costs. If you export the data back to your servers, then storage and query becomes your long-term expense.
Optional Modules
So, how do the vendors put together those great demos with all of the cool reports? Well, one of the big reasons is that they are using their entire product suite and can show you all of the functionality that is possible with their product. So, if you want all of that functionality you may have to pay for it. These additions to a core product are often called "modules" or "extensions." Modules extend the core functionality of the product. Let's look at a few examples:
Reporting
Subscription-based products may come with limits on the number of reports, filters, and dashboard report options. Some vendors charge additional fees for using Excel-based reporting options.
Data analysis
Beyond the standard reporting offered by vendor tools, often called "out of the box" (OOB), there are opportunities for you to do reporting on the raw, unaggregated data that is collected before the data is summarized into reports. Access to this data often comes with an additional charge. Moreover, some vendors provide advanced segmentation tools that enable you to run complex segmentation scenarios. There may also be an additional cost for this.
When reviewing vendor offerings, it is important to itemize the features, understand the costs, and decide whether you really need them to satisfy your analytic requirements.
Marketing Tool Integration
One of the trends that is gaining more traction is the ability to marry analytic data with marketing tools, such as keyword bid management, e-mail campaigns, and internal search or cross-sell engines, for both decision support and to create business-rule driven campaigns. Vendors enable this through both homegrown solutions and partner relationships. You should be thinking of this before you purchase and have a sense of what you will require from integration. Costs will be dependent on project scope and whether implementation support comes from your analytics vendor, or e-marketing supplier, or if you have in-house resources to undertake the project.
Professional Services
All vendors offer consulting services that range from implementing your analytics project to strategy to data analysis. Let's review them:
Implementation and Consulting
Many vendors offer packaged consulting services to help you with your initial installation whether you are using a SaaS or licensed solution. These services may include some measure of requirements analysis, data collection strategy, cookie deployment strategy, page tag variable customization, page tag implementation, and data verification.
It makes sense to review vendor services around initial implementation because it can help jump start the process and help you avoid mistakes and delays. There are many users of analytic tools who lament the fact that they wanted to go the "do it yourself" route to save money, only to find themselves trying to fix problems and delaying implementation. It is critical, however, that you understand what the vendor provides in their implementation "package." Typically you'll find standard, premium, and customized options. You need to make sure that you get what you want, and only pay for what you need.
Data Integration
It is likely that you will want to do one or all of the following at some point:
- Export web analytic data to your enterprise data warehouse
- Import offline data into your web analytic database
- Export web analytic data to marketing tools (See " Marketing Tool Integration")
Most vendors offer APIs that provide the blueprint for enabling data import and export. However, if you don't have the resources to implement the API, you may need the vendor's professional services teams to complete these tasks.
Customized Reporting, Data Collection, and Optimization
You may also require professional services to develop customized reports, provide guidance on the collection of challenging data, such as Web 2.0 activity, provide best practices regarding the placement of tags, and database and server optimization if you are hosting a software license. With regards to database and server optimization, you should get this information prior to finalizing your purchase decision, as it will figure in to your budget allocation -- as well as in your decision to go with one vendor over another.
In using any professional services offerings, be clear on your requirements and ask for a statement of work that provides ample detail and clarity on what you'll be receiving as deliverables, along with the cost of those services.
Training
Each vendor may offer a myriad of training options, (e.g., paid on-site and off-site training, custom training, paid and free webinars) for all user levels (e.g., administrator, power user, report user). Sometimes training is included with SaaS subscriptions. You may also be able to use training hours as a bargaining point in your negotiations with the vendor on total costs because some vendors may use training as a "loss leader" item. In any case, it is a good idea to get training on basic operation of your analytics package, and administration training so that you have staff that is in a position to train others. Customers repeatedly tell us: don't scrimp on this expense.
Technical Support
Vendors now use many methods to provide support. Some of these come bundled with your service, but for others you'll pay extra. Typically, the following services are bundled with the service and included in the cost:
- Account Manager
- Online Knowledge Base
- Online User Forums
- Online Help and Webinars
- Online Documentation
Telephone and e-mail support are also included, but availability of these may vary with the level of support you purchase. For example, basic support may provide business hour support local to the vendor; premium support may provide 24/7 access and response. In addition, to ensure the level of support you require, some vendors offer Service Level Agreements (SLAs). Note, you may need to set up SLAs with your internal technical teams if you are relying on support to maintain a licensed analytics tool, or if you are "borrowing" resources to implement any tagging or data integration development.
In the software world, a dedicated account manager is becoming a rarity, but note that, like anywhere else, in addition to coordinating support the typical account manager is incented to "upsell" you new products and services.
Hardware
Hardware costs are only a factor if you are hosting your own solution (or importing and storing large amounts of data from a SaaS provider). In the event, you need to look at server capacity, server software, disk drives and disk arrays, tape back up, and data storage costs. Reporting on large datasets can be extremely CPU- and memory-intensive. Data collection is I/O-intensive. Depending on your configuration, collection and reporting could have network capacity implications
Of course, infrastructure costs can be capitalized over the life of the analytics initiative. Keep in mind though that you may need to purchase additional hardware if your system starts to explode with data. This could be challenging to forecast and must be managed efficiently, especially with log file-based systems. If you don't figure to do this through data expiration and an archiving strategy, you can bring the analytics application to a standstill. Analytics vendors like to point out that storage is cheap today, but the people needed to maintain those boxes are not. This brings us to our next topic:
Human Resources
All too often we forget that it's people that run the show and not the technology, right? If you forget about the people side of analytics, your initiative will fail. Web analytics is not necessarily high maintenance, but it is high attention. Let's look at a representative set of roles and tasks associated with implementing, maintaining, and exploiting your Web analytics application:
Marketing / Communications Champion
- Senior level executive with profit and loss responsibility for enterprise marketing initiatives
- Sets marketing strategy, based on analytics input
Project Manager
- Maintains and manages analytics vendor relationship
- Manages analytics team and technical support resources
- Manages website measurement projects to include initial implementation and new initiatives
- Acts as primary interface between analytics team and senior management
- Manages user education and training
Analyst
- Develops metrics requirements with stakeholders
- Determines data required to develop metrics
- Analyzes reports, calculates metrics
- Provides strategic and tactical recommendations based on metrics analysis
Website Manager
- Manages web content, marketing, and visitor acquisition programs
- Manages relationships with all web channel stakeholders
- Supervises web marketing, content, and technology teams
- Ensures suitable analytics tags or mark-up are applied to all templates and pages
Developer
- Performs variety of customization and integration tasks required for data collection, extension, import, export and so forth
Database Administrator
- Participates in data integration
- Performs database maintenance and optimization tasks associated with software-based web analytic applications, such as archiving, data expiration, and tape backups
Server Administrator (for licensed installations)
- Maintains servers, e.g., installing security patches and updates
- Monitors data collection, data processing, and imports into database
- Monitors software and hardware components of site measurement system
Application Administrator
- Sets system permissions for those who will have access to reports
- Schedules and publishes reports
- Provides diagnostic skills and the first level of support on system problems; point of contact to vendor support
These roles and tasks may require further splitting out or may be combined, based on the scope of your Web analytics implementation and the size and breadth of your organization.
In other words, each role could be part of a job, or an entire job, or require multiple specialists. Larger enterprises have multiple website managers. In smaller operations, the same person may serve as Developer and Application Administrator, as well as Server and Database Administrator. The work doesn't go away, though.
You need to account for the tasks in any case. When determining your budget consider how these tasks can be accomplished with current resources, and whether you'll need to depend on your vendor for support, or employ additional staff, consultants and/or contractors.
This article is excerpted from the Web Analytics Report, which evaluates 13 major web analytics vendors.