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Archive for December, 2009

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The Logical Limitation of Google Analytics

Tuesday, December 15th, 2009

Two distinct modes of scientific thought: “one roughly adapted to that of perception and the imagination : the other at a remove from it”. – Claude Levi-Strauss, The Savage Mind

“Any classification is superior to chaos, and even a classification at the level of sensible properties is a step towards rational ordering”

In a recent New York Times book review of Ken Auletta’s new book, titled Googled, Columbia Law Professor Tim Wu is quoted as saying, “If Google were a person it would have all the flaws and all of the virtues of a classic Silicon Valley geek.” In other words, and perhaps to define “a classic Silicon Valley geek” (I will not use my own definitions), that this, in Auletta’s construct, is a composition of the following attitudes: brilliant, with a tendency towards being socially inept, naive and arrogant. Indeed Ken (may I add rich?).

From my perspective, as one who analyzes web data and frequently uses Google Analytics to do so, I think that this personality set – or line of thinking – has pervaded the Google Analytics product and has potential detrimental side effects to the flourishing of greater understanding of the practical use of web analytics for business or individuals. Now, before I explain this, let me state that I also believe for advanced users the tool is innovating at a strong pace (yet seems to have lost some of the classic “google-ness” – I mean it’s not as simple as it thinks it is). In classic “don’t be evil” positioning, it’s free! and it’s going to help you whether you are an individual or a enterprise. It’s fantastic, it’s easy, and you know you need it right?

Let’s stop there for a second. Why is there a need for web analytics? To answer this question, let’s take a step back and review some basic anthropology (painless), and turn to Claude Levi-Strauss, and his classic, The Savage Mind.

The Anthropological Case for Web Analytics

In a general sense we find that humans don’t do well with chaos. The first need is to create order, and language is one area where this can be studied across cultures. Early anthropologists, for example, tended to believe that the “savage/primitive” cultures reserved language for flora and fauna that possessed a form of utility, such as food, medicine, or ritual. Further study, and differing understandings of earlier data, Levi-Strauss maintains that in fact there are many examples of societies where non-functional flora and fauna are named. What this expresses is a fundamental need to classify, such that the simple need for classification itself (and the performance assigning names) is utility: the creation of order to simplify experience perhaps. Levi-Strauss explains it this way: “…animals and plants are not known as a result of their usefulness; they are deemed to be useful or interesting because they are first of all known.”

Thus, existing in the 21st century, we find ourselves extending into another environment beyond our former village/jungle/desert/city to a digital world where the equivalent “flora”, “fauna”, and “geography” – and connections and associations between – are not easily defined. This makes us unsettled, just as it would if I dropped you off in a foreign landscape where you didn’t understand the language. In a way, our extension into the digital world creates an existential wild west: where am I, and how do I relate and impress this digital environment (whether ‘I’ is a company or individual). So we turn to tools that may help to order this chaos, and find our place.

Thus, we turn to web analytics not really with a practical drive (i.e. in satisfying practical needs like “I need more sales” or “I want to be more popular”), but through an intellectual drive (“where do I exist?” within the rest of the digital world and “how I am connected to it?”).

This is where we get to the solution and the problem with Google Analytics. Google Analytics does a fantastic job at solving the intellectual problem, I know my general results, how people find me, etc. However, it seems to be failing at scaling the next level for many practitioners, that of satisfying needs.

Now, of course Google Analytics is capable of reporting practical needs through setting up goals and monitoring their performance, but this is not how most people are using it. It is this question that led to this entry, which is “Why don’t more people use the goal setting capabilities in Google Analytics?” Is it a design issue? A marketing issue? (Yes, many people do establish goals, some even use these to make decisions, but most users do not from my observation and discussions with other analytics professionals).

So what is the issue? I think it has little to do with the design or marketing – though I initially thought it was a UI issue as the goal setting could be easier and integrated within the reporting pages, but that’s another discussion.

The reason I believe that the use of goal setting features is the exception not the rule of application of Google Analytics came through the combination of Levi-Strauss and reading the book review on Auletta’s book. It is that the Google culture has created a product that allows for productivity of a certain kind of analytic mind, at the exclusion of the other the kind of mind that is more intuitive than methodical, which as we see historically accounts for probably an equal amount of major scientific discoveries as the scientific method approach, which is a modern construct (see examples of intuitive discovery process neolithic innovations to something like finding the right filament for the light bulb (carbon over cotton), which was a true study in not so much scientific method but savvy application of an understanding of what elements in the natural world to try out).

The DNA of Google Analytics Too Structured to Produce True Problem Solving At Scale

Google Analytics, by design, because its DNA is so highly scientific (being a system built by engineers for data analysts), does not easily allow (especially if it becomes industry standard) for what Levi-Strauss calls the “science of the concrete”, (and I call “messing around with tools and things you know to solve problems you’re presented”) described here: “discoveries…authorized from the starting point of a speculative organization and exploration of the sensible world in sensible terms. This science of the concrete was necessarily restricted by its essence to results other than those destined to be achieved by the exact natural sciences but it was no less scientific and its results no less genuine.”

Google Analytics is largely created to presuppose and establish a universal order and lexicon to the study of digitally created causes and effects within websites (and digital advertising). I do not believe that this application of universals can take hold before users are able to apply very basic custom analytics solutions according to their “local/personal” needs, which will have their own lexicon and will at first seen as disorder, but it is in truth the way that this data will be looked at – and is inherently a more evolutionary approach to the application of web analytics to create actions and knowledge, rather than the “intelligent design” approach that we get thrown into with Google Analytics (and trying to establish our own systems into other businesses”benchmarks”.)

Google Analytics is a full digital taxonomy applied to users who may not have a need to classify digital events to the same level of detail that the system allows by default. Users, presented to this deep system of metrics and filters then become paralyzed to use the data to solve “practical data issues”, thus resorting back to simply using the system to look at basic data on web visitors or total pageviews – not leveraging the great segmentation reports available.

As Levi-Strauss explains with language, that a wider sort of classification, does not mean a higher understanding or a more enlightened mind. For example, if I have a word for “tree” but not “oak, birch, magnolia, etc” that doesn’t mean per se that I am less off from both an intellectual or practical sense. Taking this to web analytics, I think the basic problem is too many people trying to sort out ‘what’s an oak;”, ‘what’s a birch?’, rather than ‘what’s a tree’? Or to carry the analogy into the system, instead of “I want to track .pdfs, or facebook entries, etc.” to step back, “what’s a goal?” and then define it.

Thus, in an effort to advance web analytics as a discipline (and yes even a scientific discipline), there is a need to discover more tools and applications that allow a localized/individual (meaning, answering: “What do I need to know?”) not a universal, an intuitive rather than scientific approach to acquiring, presenting, and analyzing web analytics in the short term. It is this step that we must return to, in my mind, to begin to build out to a potentially universal method and lexicon to web analytics. Another way of saying this: get your house in order before worrying about what your competitor is doing. They are probably producing data at this point that is not apples to apples to you (i.e. each company may have wildly different definitions of what a “conversion” is).

There is a need for companies and individuals to understand their digital impression. Further, more questions need to be asked upon the data being collected in websites, social networks, cell phones, etc. What we need is to start asking more questions to measure with what we have – not to assume that the great Google Analytics system becomes our default order for all digital data, which, if it were to occur would bring them even more leverage than exists with search.

Lastly, I want to leave with the notion that the best thinking and the greatest innovations occur at that marriage of intuition and the scientific approach – as seen in the examples below. For our digital age, we are at the beginning and it will be interesting.

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Present.ly Improves Internal Collaboration

Friday, December 11th, 2009

A few months ago I was thinking about how to use Twitter for my internal corporate communications. I wanted to use it in two ways, 1) to get the “stream of corporate consciousness” by giving an outlet for employees by encouraging them to post new ideas, and 2) to gather different departments into a subject and create a live open sound board.

Now, I’ve used basecamp in the past, but something was missing there – we used it for a few weeks but it just didn’t stick, and many of my team were already on Twitter and were becoming accustomed to this type of communication or dialogue.

What I wanted to do was to have a general corporate feed, and then various groups or lists by department, even on project. As a manager this would be a great way to encourage more open discourse and also, leave an important internal record regard process and efficiency. I, not an engineer, and armed with remedial web coding prowess, was only able to hack a corporate feed together, but couldn’t – easily – get the internal system to be separated from our public Twitter initiative.

I was very concerned about doing something wrong or having something break pushing our internal communications public. Secondly, I was additionally concerned that the alignments I created were going to make it difficult for my teams to be on Twitter & working internally. So, after a few tests and excitement from the staff, we tried the hack, but for many of the reasons above it didn’t quite work and we resolved to return to using the basecamp company Wall.

And on Monday, at Web Inno 24 (twitter: @webinno #webinno24) I sawpresent.ly, and spoke briefly with its enthusiastic CEO Yoshi Maisami (twitter: @yoshi123)and damn if he didn’t make the exact program I’d been thinking up, but has made it about 1000 times beyond even my most Huxley-ian dreams. I have just begun to work with this system for a week and will be rolling it into our corporate culture in steps beginning next week.

I think this is an especially strong program where groups of people – especially those that may be in different departments (e.g. IT & design) – can discuss a project and get questions out faster. Also, it’s advantage for project management keeps a record so executives can quickly scan through projects and teams to get a very quick real time sense on what’s going on. There is something in the flow of it all that allows the utility of these short posts to be very strong here – very different than what I’m accustomed to with usual project management software, which tends to be more quantitative in reporting progress.

What I like with present.ly is the potential of putting the facts in context and getting, as best you can in written word, the tone of of the team (are the frustrated, joking with each other, etc)? As a manger I think this is a great way to spur communication and internal esprit d’corps.

I will not get into further details into all the specific features of the program (you can view here from their website), but important features I found that add to the twitter basics is the ability to attach files to posts and the url shrinking built into the updating bar, basic things that present a nice empowerment of the kind of “what are you doing” interface we’re accustomed. Present.ly is also ready to integrate into a variety of mobile apps, which is great, especially for salespeople and execs, who are constantly on the move and may need to give quick reports back to the home office while dodging traffic on Park Avenue, or running to catch that plane, or perhaps most importantly from the golf course (ed. note – I do not condone using a cell phone on golf course, in fact if you need to use it on the course, don’t tee off).

Finally, as an entrepreneur and one that takes a strong interest in innovation, specifically in user interface design it simply is one of the best programs that I’ve been working with in the last couple of months. Further, I really think the basic revenue plan has a lot of legs (and one I had thought Twitter would begin – and maybe they will) – which is that the program is free to use as a SaaS, but for those companies (or neurotics) who need higher security and want to keep communication behind the firewall, fees will apply.

I mean folks, take 5 of your colleagues spend 20 minutes to set it up and you’ll be surprised. Get it here:http://presentlyapp.com/

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Analysis: Rupert Murdoch & Eric Schmidt

Wednesday, December 9th, 2009

Analysis: Rupert & Eric, Things May Be Closer than They Appear
The first bit of December has shown some interesting gestures and proclamations on the future of newspapers laid out by Rupert Murdoch and Eric Schmidt, hosted by Mr. Murdoch in his WSJ. Is it true that we are preparing for a “high noon” scenario pitting digital v. print for a battle to the end? Will Rupert tell Google to take WSJ links down, nope – that’s hard to do when Google provides so many impressions to you (and last I checked the model is on CPM) – but this is where things begin to get interesting. Where is the marriage here? They need each other, but will need to learn to manage their companies’ collective power and ego to make it work – it’s like Cary Grant and Katharine Hepburn in A Philadelphia Story.

Google needs: more inventory of quality content to place higher quality ads against. The worst slap to Google wouldn’t be prohibiting WSJ links from its search, but prohibiting its AdWords Content clients from being able to purchase display ad space in the Wall Street Journal (and its brethren).

Further, I believe that Google’s own data is pointing to what Conversion Associates sees as well: That for most advertisers, the post-click performance that comes from sites with high quality content (which does not mean, but can be a high impression website), tends to be higher than those places where the content is a feed. This is why Eric Schmidt is saying, what we have been discussing with many of our publishers that the focus of innovation (to be digital is to carry the burden of having to innovate as a business process) must be placed not on “traffic” numbers – so important in the CPM business model – rather, on discovering new performance metrics that surround visitor engagement.

News Corp needs: to discover a method to increase the price of their digital ad inventory. This process must begin with getting out of their own way, as at present Mr. Murdoch seems to retreat on the idea that the present inventory isn’t worth more today than the price News is chargeing, for example the following statement from Mr. Murdoch: “A business model that relies primarily on online advertising cannot sustain newspapers over the long term. The reason is simple arithmetic. Though online advertising is increasing, that increase is only a fraction of what is being lost with print advertising.”

Dear Rupert, please apply what you know – When the arithmetic doesn’t work in your favor, buy the teacher and change the question. So what he says is true: the prices of CPM continue to go down as more Ad Networks proliferate and struggle to produce quality ads against the quality content. Rupert, your ad serving is not worthy. Raise the price of the ads, especially to the Ad Networks – like Google – to advertise on your site. But we know Eric wouldn’t like that would he?

The second thing, identify what Mr. Schmidt clearly recognizes, and oddly Mr. Murdoch seems to be skittish about – quality of the engagement that the WSJ and other strong publications produce – and that advertisers should and will be willing to pay more than what they do currently to get this quality. The present hurdle today we believe to this whole conversation is the process of proving this lesson, this reality, to the advertisers.

We also believe that the publisher needs to become more involved as a business to innovate methods where they control and present these results rather than relying on 3rd party ad networks, like Google. Granted, we also believe that there is a model to pay for the quality content. However, based on the results we see for our clients coming out of publishers with quality content, the gold is in the hills of simply charging more for the existing advertisements.

The solution is to innovate and improve relevant ads and innovating on improving relevant ads to readers over time and for the publisher to control more of their own inventory, and finally improve thier ability to communicate results to the end client.

Oh, do you see that that last sentence of advice to publishers is exactly the Google playbook. To restate, Google over the last 6 years:

* 1. publish relevant pages for visitors,
* 2. obsess about the user’s concept of what is “relevant”,
* 3. attach this to a measurable digital event, or proclamation of user action (i.e. a click),
* 4. develop a system to allow this event to be the center of a revenue model, rather than on the number of visitors,
* 5. create a platform to show advertisers their results (AdWords reporting, later Google Analytics),
* 6. in the process of ad creation force best practices (you can’t use superlatives in adwords, and automatic split testing available),
* 7. advertisers see the value, users experience relevance,
* 8. go Scrooge McDuck (at least this step should be familiar to Mr. Murdoch).

At the end of the day, it is important to see what both men agree on: We are at the dawn of a very exciting time in journalism. The sooner the business side of the house can catch up with better models of selling advertising the quicker publishing can thrive. At the end of the day, it’s still about making pages and producing great quality to your readers, but also, expressing to advertisers that your happy readers make happy customers for them. It can be done.

Relevant Links Here:

WSJ (may need to be a subscriber)

Eric Schmidt’s 12/1 Op-ed: http://bit.ly/6AGqB4

Rupert Murdoch’s 12/8 Op-ed: http://bit.ly/717IeN

Analysis from Silicon Valley Watcher, Tom Foremski (fmr of Financial Times): http://bit.ly/4MBVGM

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Posted in Advertising, Analytics, Marketing, Publishing | 1 Comment »