A Brief History of Google Analytics, Part Two

May 15, 2014 - Digital State Marketing

Google dominates the search engine market. Ninety percent of Britons use it for search requests and it enjoys a 70% share of the entire global market. Google has access to all the information we divulge online: our browsing history, our personal preferences, our social connections and social media profiles. It knows what you searched for this morning; what YouTube videos you watched last week and, probably, what you did last summer. So, should we be concerned?

It’s undeniably a great search tool. It is efficient, simplistic and provides user-relevant results. Great. It acquires our data which it then supplies to businesses to help them design the most appropriate ads. Great for advertisers, too. Google’s acquisition of data means – essentially – that it does not mind providing users with free services. These range from video conference facilities and web tutorials, to developer tools and application programming interfaces (APIs).

Google Analytics is a free service that generates data about website traffic, traffic sources, conversion rates and sales – a truly indispensable resource for both marketers and businesses.

Big-Brother-Google

Previously, we looked into the history of Google Analytics: its genesis and development. In this paper we’ll explore the significance of website analytics and the emergence of “big data”. We’ll also examine whether the motives behind Google’s free analytics platform are wholly driven by financial ambition, and ask whether this data-for-services “trade off” is ultimately worth it.

We inhibit a world increasingly shaped by “big data”: the collection and organisation of huge volumes of personal information which can – in some circumstances – be used to tailor SEO campaigns and create target-specific online advertising.

Money, money, money…

Conversion rate optimisation (CRO) has been a significant factor in the rise of Google Analytics. The best CRO schemes recognise the most suitable sales and marketing techniques for a company, helping to pinpoint and unlock new revenue opportunities.

GA is an excellent tool for gathering the facts. It shows where traffic lands on a website; how long they spend on certain pages; how customers interact with them; what the best (and most popular) content is; and the conversion potential of individual webpages.

Google Analytics identifies the pages that need to be tested and optimised. “Bounce rate” – the percentage of single page visits – and “exit rate” are useful metrics at gauging where and why users might be leaving your website prematurely. “Funnel visualisation” reports help to give insight where users are existing the conversion process. “Goal flow” reports illustrate where people tend to return in the funnel to previous steps. And “site search” shows what users are searching for in a page’s search box.

Google rules the world of website analytics

Google’s dominance of the website analytics market can be attributed to strong and sustained investment. In 2005, it purchased Urchin to help marketers and website owners better understand the experience of users, optimise content and track marketing and sales performances – “to enable them to increase their advertising return on investment and make their web sites more effective.” In 2006 it acquired Upstartle – the creator of a web-based word processor called Writely – and the 3D-modelling programme, SketchUp. In 2007 they bought the visual statistics software Trendalyzer – a tool which converts raw numerical data into interactive animation and infographs. In June 2011, they purchased PostRank – an analytics service that measures how social media content, such as tweets, shares and Facebook updates, proliferate across the web. In October 2011, it acquired the Twitter analytics start-up, SocialGrapple, which provides visual insights and reports to help users understand their Twitter accounts – it archives keyword tweets, illustrates the growth for the certain keywords and tracks social graphs. And, in February 2014, Google invested $40 million in the education analytics firm Renaissance Learning.

We are living in an era of “big data”

Companies, large and small, are beginning to realise the potential of “big data” – placing Google in a very strong position strategically. Facebook and Amazon, for example, are embracing “data-driven” management and have demonstrated how analytical data can be used to make more human-orientated decisions.

Google Analytics is a highly sophisticated platform. But do statistics tell the whole story? Should we, for example, entrust them to make important decisions such as whether office employees are promoted or disciplined?

A Brief History of Google Analytics, Part Two - 2

“Valid psychometric tests provide a better estimate of a person’s potential for a job than an interview, a CV, or a recommendation letter”, writes business psychologist Tomas Chamorro-Premuzi. “Well-designed climate surveys give managers a better measure of their employees’ job satisfaction and engagement than managers’ own perceptions. And reliable 360’s, which crowd-source feedback on managers’ performance…provide a better measure of managers’ leadership quality than any objective test”.

Businesses have been reluctant to adopt empirical management methods – no matter how rational the tools are, they can’t iron out the irrationalities of everyday life. Our government, however, is investing more heavily in data. And, in March, George Osborne unveiled the Alan Turing Institute for Data Science – a hive of mega-scale public-sector analytics which will help Britain lead the way in algorithmic research and big data.

“In Big Data…the quasi-prophetic powers of information in oceanic volumes will never cover every angle and option”, writes Boyd Tonkin in the Independent. “We must still attend to the empty space, the cracks in the sidewalk, the unspoken and as-yet unthought.”

“The digitised world now blasts waves of raw information around us in a deafening lion’s roar”, Tonkin continues. “A new research hub should allow us all to interpret it, act on it, and plan possible futures. As well as harnessing its power for profit, the state could help every citizen hear – and tame – the lion of big data.”

Where next for analytical number crunching?

The new demands of digital customers poses a challenge to all online brands. As such, “big data” analytics even appeals to the largest and most cutting-edge companies.

The biggest players in the media and entertainment (M&E) industry have started to use big data analytics – coupled with social media strategies – to create close relationships with customers based on 360-degree behavioural profiles. Properly interpreted information then drives multi-platform product development to fashion more universal customer experiences.

Many companies have completely overhauled their online business model, which means reimagining content and services, as well as brand culture, digital marketing and distribution. In a study conducted by the Financial Times, entitled “Sustaining Digital Leadership”, 70% of leading digital companies said they would accept short-term revenue losses in favour of long-term growth.

Most of the digital leaders surveyed believe they have used big data analytics effectively. 77% of companies said they access customer data in real time, while over 80% said they were able to integrate data from multi-channels to develop a better understanding of their customers.

Big data analytics are by no means infallible, however. There are questions over its reliability and it’s difficult to gauge customer satisfaction over specific bits of content. “Data reliability presents a real concern for 49% of media and entertainment (M&E) digital leaders”. Less than one-fifth of digital leaders integrate customer data across all channels, while 39% state that they do not get any insight from big data.

The success of Google Analytics has encouraged other companies to replicate similar models. For example, Piqora raised $7.7 million to develop a new analytics system for images, which helps brands gain a better understanding about how their customers engage with visual content.  Moreover, computer algorithms are helping to detect niche audiences, fan bases and the potential of emerging artists in the music industry. “The explosion of data from sources like torrenting, music streaming sites and social media platforms has offered the music industry a huge opportunity to understand their fans and spot upcoming artists like never before”, writes Kadhim Shubber.

Big data and privacy fears: too little, too late?

Public sector data collection has come under fire in recent months following the NSA surveillance scandal, which, in turn, generated uncertainty over the practices of Google and Facebook because it brought the notion of “big data” into disrepute.

In early May 2014, the White House published an 80-page report extolling the positives of mass data collection, claiming how it can help to make many forms of decision making more informed and more effective.

A Brief History of Google Analytics, Part Two - 3

“Big data technologies will be transformative in every sphere of life. The knowledge discovery they make possible raises considerable questions about how our framework for privacy protection applies in a big data ecosystem”, the report states. “Big data also raises other concerns… Big data analytics have the potential to eclipse longstanding civil rights protections in how personal information is used in housing, credit, employment, health, education, and the marketplace. Americans’ relationship with data should expand, not diminish, their opportunities and potential.”

So, in other words, we should be wary of relying too much on algorithmic data crunching because “big data” is not immune from biases and mistakes.

Nevertheless, the White House report basically validates internet data collection, provoking criticism from privacy campaigners.

“The goal of this report is to rubber stamp the data-gathering practices of the American companies – they let the industry off scot-free,” says Jeffrey Chester, director of the Centre for Digital Democracy.

The report, headed by John Podesta (Counsellor to the President), outlined several areas of potential reform, including changes to Electronic Communications Privacy Act. However, it does not support calls making it compulsory for federal agencies to apply for warrants before accessing personal emails.

“While big data unquestionably increases the potential of government power to accrue unchecked, it also hold within it solutions that can enhance accountability, privacy, and the rights of citizens. Properly implemented, big data will become an historic driver of progress, helping our nation perpetuate the civil and economic dynamism that has long been a trademark, the report continues. “We can embrace big data technologies while at the same time protecting fundamental values like privacy, fairness, and self-determination.”

Stoking the fire

Last November, Google and Facebook started to integrate old social media posts into online adverts.  User names, comments, ratings and photos are now used to endorse marketers’ products – another step in effort to “to collate the reams of personal information shared online in the chase for profits”, writes the New York Times.

Clearly, the changes will help big data users such as Google and Facebook to offer more personalised services, but critics believe that it could infringe on users’ privacy rights. And the emergence of apps like Snapchat might well typify how people want more control over their information.

Indeed, in April Google came under fire from Mathias Döpfner, CEO of Germany’s Axel Springer (Europe’s largest newspaper publisher). “Google does not need us. But we need Google,” wrote Döpfner. “Google not only knows where we’re going, but also what we do while driving. Forget Big Brother – Google is better!”

Why has Google Analytics become so popular and will its popularity endure?

Conversion monitoring and ROI tracking have become keystones of digital marketing. Google Analytics undoubtedly helps businesses to improve their ROI and marketers to analyse the effectiveness of specific SEO, pay-per-click, social media and content campaigns.

The widespread adoption and market penetration of GA is impressive, but not surprising. It is conveniently incorporated into the Google ecosystem, its data is sophisticated, but its data visualisation is meaningful, clear and easy to interpret.

The growth of data control has cemented Google’s strong position. For Google, information is an essential commodity, a utilitarian resource that can be processed with industrial efficiency: the more data we supply, the better service Google offers – so the more we use and rely on its tools. In other words, Google monetises the provision of information by continuing the feedback loop of data collation – just as big data continues to fuel the growth of Facebook.

Free is hard to beat

The question remains, however, will Google monetise data more aggressively in the future? And will it, therefore, always reign supreme over the web?

Google is in a very strong position both financially and strategically. It is one of the world’s most valuable brands and has a market capitalisation of around $400 billion (£236 billion). In the world of online search, and indeed online provisions, niches are always gained and lost, but Google has the financial capability to avoid being out-flanked because it can simply buy-up its smaller rivals.  Google navigates the direction of digital industries and has become so powerful that it is almost a “State” itself (or a “digital superstate”, if you like), such is the influence it wields over web users and businesses.

As the NSA scandal highlights, internet users are right to be somewhat concerned about their personal data, because the information we disclose on Google could – theoretically – be acquired by governments, law enforcement agencies or illegally appropriated by hackers.

However, Mathias Döpfner’s Orwellian interpretation of Google intentions is overblown. Google is powerful, but that enables it to provide us with great services, products and tools. It’s important that there remains some competition in the online world – perhaps it should be encouraged more – but so long as users and Google remain mutually dependent the price we pay for Google’s wealth of online provisions is worth it.

Post Script: On Tuesday May 13th the European Union Court of Justice backed the right to be forgotten case against Google, stating that the search giants must delete “inadequate, irrelevant or no longer relevant” information from its database upon the request of users. The ruling establishes that Google should be regarded as a “data controller” under EU data protection laws. “This is a disappointing ruling for search engines and online publishers in general”, Google responded. “We are very surprised that it differs so dramatically from the advocate general’s opinion and the warnings and consequences that he spelled out. We now need to take time to analyse the implications.”

The ruling appears to hand Google the space to define what information it regards inadequate and irrelevant and, of course, the ruling only applies to its European branches. It is the first in a series of cases levied against Google, so it’s too early to fully determine how this could affect Google’s operations. However, allowing individuals manipulate their historical digital record sets a dangerous precedent. We certainly have not heard the last of it yet.

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What are YOUR thoughts?  We’re always keen on feedback so please feel free to comment below – or via our social media (@smg_uk) – and tell us if there’s anything you’d like us to discuss.

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