This post is cross-posted with Ubercool.
The quest dates back to the early heyday of the dotcom boom. Online marketers wanted a complete 360-degree view of their customers, optimally displayed in one single screen. To this day the challenge remains. While the data mountain has grown markedly, our reporting interfaces remain a step behind.
But there’s hope. The arrival of HTML 5 will provide developers with the ability to fashion incredibly intuitive and malleable control panels, guaranteed to satisfy all but the most particular social marketer.
This HTML 5 demo gives an inkling of what’s feasible. We see a major market opportunity for a start-up that develops a ‘lego block kit’ analytics front-end that would gain wide industry deployment simply because the challenge of developing a highly pliable reporting front end often outweighs the crux of a program’s core features.
Why is this important? The cost of managing social engagement analytics programs is negatively impacting digital agencies’ operating margins. This trend exacerbates an already well-known factor ‘ overhead costs of digital ad production are significantly higher than that of traditional advertising:
- Overhead costs ‘ Digital agency overhead costs form a significantly higher part of the overall cost of ad production, 45% vs. 12% (PDF; 2009 ‘Understanding the Economics of Digital Compared to Traditional Advertising and Media Service,’ AAAA).
- Operating income ‘ The top 30 digital agencies increased gross income by 18% in 2010, but their operating margins fell sharply in 2010 from 9.5% to 5.7%. A well-run agency achieves good margins by keeping staff costs to no more than 55% of gross income. In the past year it worsened to 65%.
Clearly, the growing data mountain being produced by social engagement analytics is causing agency staff costs to balloon, which is not sufficiently being offset by heady overall revenue growth. This dictates that next-generation social GUIs be far easier to use and customize.
One company, Kansas City-based Infegy has just released Social Radar 3, which pushes the GUI envelope. Infegy Founder and CEO Justin Graves’ demo of Social Radar 3 last week underscored how easy it is to create customized analytics views on the fly. This is particularly relevant in a market where many marketers still enter queries as strings of Boolean variables.
Social Radar 3 has an elegant interface that uses drag-and-drop technology to enable users to customize their dashboards and reports. Reports can be shared via Excel, PDFs and URLs.
Infegy, founded in 2007, now tracks some 40 million Web sites, including blogs, forums, image sites, news sites like CNN and the BBC, Twitter and more. Says Graves, ‘[We obtain] essentially any useful content we can get our hands on, but focus principally on consumer-generated content.’
Infegy’s market is growing fast. Marketers are demanding much more accountability. Their struggle to analyze campaign performance from Web sites, Facebook, Twitter, iPhone and Android apps, will lead marketers to more than double investments in Web analytics by 2014, according to a May 2009 Forrester Research report, ‘US Web Analytics Forecast, 2008 to 2014,’ which predicts that U.S. companies will spend $953 million in 2014 to install, license and support for Web analytics services.
Piper Jaffray has a more aggressive view of this marketplace, at least they did in 2007 when they issued a five-year forecast that would have the Web analytics services market reaching $1 billion in 2011, based on a CAGR of 19% (PDF; ‘The User Revolution,’ February 2007). Keep in mind that both these forecasts are umbrella figures, because they include such general analytics players as Coremetrics and Omniture.
A big driver of this spending will be social media. Social engagement marketing not only brings the added dimension of being able to listen in on conversations but also to measure shifting attitudes about brands, an aspect dubbed ‘sentiment analysis.’
Infegy allows clients to search four years’ worth of online ‘chatter,’ with trend analyses that provide a historical overview of sentiments shifting over time, returned in merely two seconds.
Social Radar 3 is able to filter data in any of 12 languages, by country, positive or negative sentiment and drill down to source type, engagement frequency, time stamp, unique post, and other parameters.
To enable near-instantaneous search results, Social Radar abstracts trends by showing normalized listening volume. A typical chart shows the percentage of Infegy’s content during a set time period, be it day, week or month, that mentions a query. Explains Graves, ‘The reason we show this is that it is considerably less effected by long-term change and unrelated events. Social Radar’s database is much larger now and gets considerably more content each day compared to three years ago, so to make a trend over such a long time period useful, we need to normalize the data. Users can also switch to absolute counts if they need them.’ The race is on to improve the display and interpretation of social analytics with every monitoring tool vendor rushing to provide simplified dashboards that are more powerful, yet easier to use. Remarkably, this social analytics program was written by twentysomething Graves himself. The company say it’s profitable and cites such customers as Novell, Pizza Hut and Sprint. We hope this type of friendliness becomes an industry standard, so users can focus on developing that 360-degree view of the customer, one that marries online and offline engagement in a single view. It would certainly please those who’ve been wishing for such a system since the pre-historic days of ’99.
Hear more from Michael Tchong on Wednesday, April 6th at the Social Media & Community 2.0 Strategies Conference.