Even Smarter Analytics: IBM to Acquire SPM Software from Varicent

Paul Lima     

On Monday, IBM announced it will acquire Varicent Software Incorporated, adding sales performance management (SPM) capabilities to its already impressive Smarter Analytics offerings.  The move puts IBM in a strong position to compete for new business in the financial, insurance, retail, and telecommunications industries.

Varicent’s software should be particularly attractive to businesses whose revenue is driven by commissioned salespeople.  By automating and analyzing the collection and reporting of sales data across finance, sales, HR, and IT departments, Varicent helps businesses yield more profit from their sales, most notably by aligning compensation and other costs with strategic business goals.

In addition to state-of-the-art SPM software, Varicent also brings a network of more than 180 customers to the table.  Their portfolio includes a significant number of sales organizations within high-growth markets – in other words, the exact customers IBM must target in order to achieve their goal of building a $16 billion analytics empire by 2015.

We continue to be impressed with IBM’s strategy of uniting cutting-edge analytics solutions under the Smarter Analytics banner.  It’s also great to see software geared towards sales executives incorporated into a portfolio that already includes Coremetrics and Unica – both of which are more strongly associated with marketing.  Hopefully, by linking these two related disciplines in a single platform, Smarter Analytics will help reduce some of the tensions that often exist between sales and marketing departments.

The market’s appetite for software that can transform IT insights into profitable outcomes is still growing.  More and more organizations are realizing that analytics can help them use operational and financial data to gain a significant edge over their competitors.  And by folding the most powerful tools available into a single platform, we think IBM is positioning itself for unparalleled success in the ever-expanding analytics market.

Focusing on Content, Not Just Ads

Paul Lima     

For quite a while, the concentration in online analytics and tools to optimize results based on analytics revolved around ad optimization.  It was a world of sellers.  The focus was always on systems which could improve a company’s ability to recommend relevant products, increase conversions, and acquire traffic with increasing efficiency.  The solutions were skewed towards helping the sellers sell their ads, while putting less emphasis on the delivery of primary content.

Predictive Analytics are Ready for Early Adopters: Super Cool Sneaks from the Adobe Summit

Paul Lima     

Adobe announced their embedded forecasting and predictive models into Adobe Social, Discover and SiteCatalyst at their Annual Summit today.

I blogged about predictive analytics in my annual prediction for marketing trends entry for 2012, where I indicated that this would be the year for the early adopters to begin bringing these capabilities to digital marketing.

It’s here.

There are too many instances to mention, and many more that I expect are coming as the Product Development Teams begin to insert the Efficient Frontier (EF) models underneath the platform as underpinnings to nearly all of the products.  EF, in case you aren’t familiar with them, used Nobel-prize-winning Henry Markowtiz models called the Modern Portfolio Theory (MPT) to apply the models that help financial engineers balance risk and returns on the stock market (which is essentially an auction) to the similar problem of risk (as defined by volatility and conversion metrics) and the price of keywords, which again is essentially an auction.  They’ve been around for over about a decade, and employ seven PhDs in the field.  I attended their workshops, and began to assess how these models will be embedded into the underpinnings of the Online Marketing Platform from Adobe.

So here are three things that impressed me, and keep in mind that since the EF acquisition only happened six weeks ago, none of the models have been incorporated into the platform at this time.

The Adobe SiteCatalyst product will be releasing The Navigator feature, there are new predictive analytics capabilities in the Discover 3.0 product and Abode Social shines the headlights around the corner to predict sentiment and help marketers more carefully use words that will increase engagement. read more

What Can Digital Marketers Learn from Moneyball?

Paul Lima     

Did you see the movie Moneyball yet?  Billy Beane changes the game of baseball by using data.  And the same trends have been happening in the digital marketing arena for just as long.  

According to leading web analytics guru Avinash Kaushik, many large organizations still practice online marketing as a faith-based initiative – that is, they place their trust in intuition, bad data, and inefficient indicators when making strategic decisions.  Unfortunately, the use of weak metrics like clicks and page views often makes web analytics results look more impressive or meaningful than they actually are.  This allows managers to feel comfortable and content with their marketing decisions, without digging deeper to determine if their efforts are actually yielding useful results.  We think those types of metrics are generally ineffective.  We call them “caveman analytics”.  read more

Creativity in New Marketing

Paul Lima     

Leaders in the development of new technologies, such as Adobe, Google, IBM, WebTrends, and Yahoo, are currently locked in a race to create powerful analytics tools in the field of digital marketing.

Thanks to their innovation, the business data available to organizations becomes more detailed every day, allowing for the creation of extremely reliable market research campaigns.  In just minutes, these new platforms deliver comprehensive customer profiles, evaluate the quality and appeal of web content, detect digital consumer interactions, and much more – all in real time.  These powerful tools are super-effective for making decisions and solving complex marketing problems.

In the face of these limitless technical possibilities, one unique human skill is now allowed to take center stage: creative development.  It is no longer enough for marketing professionals to simply craft intelligent campaigns, design exciting concepts, or effectively convey emotion.  Instead, marketers face the new challenge of using detailed data to develop a distinct message that is valuable and attractive to thousands, or even millions, of unique individuals – all of whom are looking for something both innovative and attention-grabbing.

By leaving the numerical work to technology, businesses now have more space for imagination and talent to flourish.  As a result, achieving excellence in the vast ocean of web content is no longer the privilege of a small group.  These days, anyone who wants to develop their creative skills can do so at any time, thanks to these powerful new analytics tools.

IBM Expands Cloud Based Analytics for Smarter Commerce

Paul Lima     

I think it’s neat to see how companies are getting together in a consortium, if you will through IBM’s Coremetrics product.  Collectively, they allow any client that opts-into the program to view the aggregate averages within their industry.  Summary information is now being picked up in the press as an indication of how Black Friday went.  Pretty cool if you don’t have to share your information.  And that’s where the IBM Acquisition of DemandTek comes into play.

A sample dashboard from DemandTec

So this type of thinking helps companies competing in the digital marketplace to adapt to changes in consumer demands as they occur.  Companies that can quickly and effectively adjust their price points and product mixes in response to ever-shifting customer buying patterns will have a key competitive advantage in the era of mobile and social networks.

That’s why IBM’s acquisition of DemandTec this past Thursday will make the  Smarter Commerce initiative even more valuable to retailers and manufacturers of packaged consumer goods.  The San Mateo, California based DemandTec develops cloud-based analytics software that allows businesses to examine consumer buying data mined from both online and in-store sales.  DemandTec customers can use that information to quickly and accurately identify consumer trends, helping  them make better price, promotion, and assortment decisions.  And because DemandTec’s software is cloud-based, retailers and manufacturers can collaborate to make time-sensitive business decisions instantaneously.

A sample Coremetrics Dashboard

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10 Most Common Web Analytics Mistakes

Paul Lima     

So you want to know the most frequent questions I get about web analytics and online marketing? I’ve tried to present them here and answer a few of them so maybe I can save you, my clients and future prospects some time so we can get onto executing profitable campaigns.

1) Free analytics are good for my business and are just as good as paid ones

Coremetrics Platform offers more than Google Analytics

First, let me say, I like Google Analytics and Yahoo’s Analytics solutions. But Google Analytics was built for Google. It serves their interest, not yours.

This might be the most common myth out there, and possibly one of the most dangerous. First and foremost, to directly dispel this rumor, the truth is that enterprise analytics solutions offer levels of detail and capabilities that free solutions such as Google Analytics don’t. Although free solutions can be hacked to a certain extent to extend their capabilities, at the end of the day they fall far short of the paid solutions in providing meaningful reports to a diversified group of stakeholders. If for example you had any interest in tracking the video drop off rates, or immediately integrating custom analytics events, records or values with a recommendations engines, you can’t.

The Omniture Online Marketing Suite offers a platform to manage the online marketing discipline for sophisticated digital marketers.

Beyond capabilities alone, you also get a lot of important side benefits as well. First amongst them is accountability and support. With free solutions you’re not paying for anything, so you get a community of blogs and consultants, which we belong to actually. If you’re paying for a solution, and if for any reason it has a problem, we’ve got help from the analytics provider to get the job done.

With paid solutions you own your data and can integrate it seamlessly with PPC bid management platforms, multi-variate testing platforms, and a host of other add-ons and integrations like Salesforce, NetSuite, SugarCRM, email marketing solutions, ad-server networks and more.

The future of analytics is in an analytics suite approach, not in point solutions. Of course, if you want to own your own data from Google Analytics, they offer a license to purchase Urchin for approximately $3,400 (the company that Google acquired in 2004 that is today known as Google Analytics). The future of analytics isn’t more data, but instead the ability to act upon that data in an a fast, efficient, and measurable way. Free solutions will never offer the level of integrated optimization that paid solutions do, and due to the great competitive advantage that such features offer, a business should be wary of the risk that going “free” might entail. Bottom line: If your business relies on the internet, you should investigate using a paid analytics platform. I have seen cases where the answer is to stay on a free solution, but more often than not, it’s time to increase conversions and there’s too much at stake to penny pinch.

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