Coremetrics purchased by IBM puts Web Analytics in the mainstream

As I am out and about in front of big and small companies alike, I sometimes feel like it’s necessary to explain to even sophisticated marketers the importance of measuring the Return on Ad Spend (ROAS) using software tools such as Omniture’s Site Catalyst, or Google Analytics.  The recent Adobe acquisition of Omniture seemed to make my story more believable since a known name legitimized the market leader by rolling them into their core offering.  I’m excited to see how Adobe integrates the Omniture suite deeper into it’s product lineup.

And the consolidation continues.  IBM wants to get into the analytics game.  Accenture already has.  The IBM product called WebSphere is really a set of software tools that can be configured to put together highly personalized online user experiences.  Many if not all of the WebSphere websites are generally e-commerce websites and organizations that generally have enough inventory where business process and supply chain management are supported through sophisticated automation.   Coremetrics complements IBM’s existing software and services portfolio of offerings from WebSphere, information management and business analytics and optimization.  Coremetrics has about 230 employees and IBM agreed to maintain them, as was the case with the Omniture-Adobe acquisition.  

As we see with many new innovations in software, there appear a proliferation of niche vendors, a few begin taking market leadership positions, those newly developed sharks acquire the smaller players, and then finally the grown ups come along and acquire them.  So it was the case.  Coremetrics is a strong player in the e-commerce web analytics space and so is Omniture.  Omniture for example acquired seven companies in the three years prior to its acquisition by Adobe.

Innovations I expect from Omniture and Coremetrics:

Now that Adobe owns Omniture, I expect to see a tighter integration with their Software as a Service (SaaS) Content Management System (CMS), Scene 7.  Internet Marketers are exploring ways to personalize user experiences based on what they know about you.  Through automation, these tools are able to offer content and advertising best suited for each persona, each profile, and each user based on what we know about the user.  Here’s the concept as expressed by Omniture.  Coremetrics will deploy the same strategy, but their focus will be towards integrating with the WebSphere platform which has never gone far from their core client base in e-commerce.

Adobe and Omniture

3 Analytics Predictions:

1. Coremetrics will explore ways to more tightly integrate their analytics platform into the WebSphere platform, dashboard and portal. Their development resources are going to go directly into rolling the software into the WebSphere platform.  While I do believe that CoreMetrics will stay as a stand alone product and continue to be sold as is, I also believe that their technology roadmap will focus inward.  The innovations will slow down in the industry as a whole while Omniture focuses on integrating with Adobe products and CoreMetrics focuses on integrating with WebSphere.  Overall, this is bad news for the industry but it is a necessary step in order to provide cutting edge user experiences.  And without any doubt, I believe that this is good news for Adobe and IBM in establishing themselves as leaders in their respective solutions for e-commerce and content management.

2. Coremetrics will close the loop between pre-click analytics with post-click analytics.  This means that marketers will be able to correlate information about their Search Engine Marketing campaigns from sources such as Google Adwords and Double-Click with their e-commerce sales.  This has generally been an area where they have not been as strong as Omniture, but that could change.  The SearchCenter product needs improved logic in its bid management logic and this is an area that Coremetrics could innovate and provide a real challenge.  I suspect that this is an area for development however after the integration with WebSphere.

3. Coremetrics will find ways to micro-personalize content and ads. This changes the nature of dynamic websites.  In the past, dynamic websites that are built on top of a WebSphere database created the pages within the site on the fly.  As the page is painted on the screen, the code behind it would go to the product database and present the content for the product in the container (or box) for that information with the appropriate format.  The code would also have the page go get the ad from the ad-server, and so it was with each area of the page.  However, in the future, what we will see is a lot of code that will decide the secondary content on the page.  For example, if you maintain a profile at a sheet music website, and we know you are a Choral Director at a High School.  We know that you have purchased sheet music in volume, always in August, and generally the following genres: Classic, Blues, Vocal Jazz.  Therefore, when you log in this year, we’ll make product recommendations about what is hot for other Choral Directors who also purchased the genres you did, we’ll run promotions for volume discounts for those orders placed before the 15th of August (to encourage earlier purchases) and we’ll make specific new arrivals in the three categories you and other choral directors in your micro-segment have purchased before.

Welcome to the dawn of the new, micro-personalized web.  If you feel like there is someone presenting relavant advertising and product recommendations to you that are almost scary, you’ll know how they did it.  I leave it to you to decide if it’s big brother or a helpful genie waving the magic wand behind the curtain.

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