Web Analytics is struggling for the soul of online marketing. At least it should be. There is far too much time and money spent badly, far too many users subjected to horrible web experiences, and far too many misplaced priorities – all the very things that good analytics and analysis can help prevent.

And although they might not see it in these grand terms, many of the Analytics Elders have been talking lately about some fundamental issues that we as practitioners need to get right before what has traditionally been the tail can finally start wagging this dog.

First we have the relative role of tools and talent. Avinash now famously proposed the 90/10 rule for allocating analytics budgets. I’m fairly certain it wasn’t meant to be the literal dictate some like to argue about but was intended to be a theoretical ideal and probably a little bit of an exaggeration intended to make the point that 10/90 split found in most companies was really wrong. The vital point here is that it doesn’t matter that you buy (or install) web analytics it matters that you do web analysis.

Eric Peterson suggested the debate shift from money to time, and more specifically that 20% of time be spent on hiring and 70% of it on the actually doing of the work. More importantly, he makes the case for a known and repeatable analytic process so that results aren’t based on raw talent and individual superstars, both of which are in short supply. I’m sure he’s right but it will take a lot of effort and discipline to define these processes and given the huge range of efforts that analytics can measure I think this one’s going to be a long time coming before most companies (or the analytics world in general) have so many processes well defined that it doesn’t take an exceptionally skilled analyst to deliver a constant stream of valuable and actionable insights.

The second issue is that of exactly what analytics should deliver: reports or insights. Avinash proffered the 20/80 rule (again I believe as a guideline) for allocating time between reporting and analysis. While ‘less reporting more analysis’ has become the analysts’ theme song, the idea that any reporting that does get delivered should be ‘actionable’ has also become a frequent refrain. Gary Angel effectively took the counterpoint in this debate when he argued that it isn’t practical for reports and KPIs to be actionable because the KPI itself cannot contain enough context. With some great examples and follow up posts (#1 and #2) he clearly demonstrates both the value and process of analysis – while setting a simple goal for reports which justifies their existence even if they aren’t actionable: “Reporting is designed to provide information back to key decision-makers within an organization about the web channel.”

Eric wrote a reply to Gary’s post that is worth reading, and Jim Novo did a fantastic job of putting both into some larger context. My own sense is that KPIs and reports are vital for understanding, which is in and of itself important and the prerequisite to ‘actionable insights’ for both the marketer/executive and the analyst.

Finally we have a step which I’d never heard discussed in the context of analytics but clearly is part of the analytics process. Bryan Eisenberg pointed out that the step after actionable is action. Analytics only works if you have reports, and analysis, and someone ‘talented’ enough (Bryan’s word) to take action.

Talk about raising the stakes. Now to be successful with web analytics we need to choose and properly implement the right software, gain complete and accurate data capture, select the right KPIs, define and prepare the right reports, have the time and skill to perform analysis and define insights (with the inevitable trackbacks for more tagging, data, and reports), possess the ability to recommend actions based on those insights, AND find a client (internal or external) who has the awareness, authority, and resources to go make significant changes to campaigns, web pages, offers, or whatever else needs changing.

Of course this last piece (the client) isn’t really the last step – they’ll need to be pre-qualified as having the right attitude and proclivity to action way up front, informed and updated throughout, and probably play at least a semi-active role in the acceptance of the analysis and recommendations. In other words they aren’t just going to do what you tell them.

I don’t know that there’s any aspect of online marketing which is moving faster in its development than web analytics is right now (both in technology and in practice) but I also can’t think of any areas that has further to go or in which more is at stake. My instinct is that as a group we’re not going to make it – and that broadly speaking the metric-less marketers will keep driving their boats into rocks without even knowing it for quite some time to come.

Having said that, this is an astounding opportunity for those who can make it work. I would suggest that the sky is the limit for both salary and influence for those who can really demonstrate command and the ability to execute to the potential of this space over the next few years.

And it’s worth pointing out what should be obvious - there are a very impressive group people writing and working to bring maturity and ultimate success to this market space. I came across all of the above referenced articles in just one session catching up in my RSS reader. Those I’ve linked here and another dozen or so really smart folks are certainly going to make it a good and interesting fight.