Business impact of Google Analytics API

Posted by Josh on Thursday, April 23rd, 2009.

Google recently announced the launch of the Google Analytics API. While most businesses won’t ever make direct use of this service, it is likely to have a substantial impact on the web analytics landscape through the advent of new, more sophisticated tools for website owners. The API allows 3rd parties to develop applications and services on top of and with Google Analytics, extending its functionality much like the iPhone API enables others to create a constellation of interesting applications for that device.

If you are in the market for analytics tools, we recommend casting an even more critical eye on potential solutions. The API launch increases the risk of obsolescence for some solutions. It also creates significant downward pressure on prices. It may behoove companies to use try Google Analytics first to see if it meets their needs before investing in solutions that may have to evolve rapidly to remain relevant.

Google Analytics was born when Google acquired Urchin Software Corporation in 2005. The standalone product was dropped, and the web-based service was made freely available as Google Analytics. Since then, Google has rolled out many new, powerful features that, combined with the unbeatable price and integration with AdWords, have made it one of the leading analytics offerings. This success has also come at the expense of several independent vendors of similar tools. We frequently receive emails and see promotional articles promoting others’ products with the thrust of “you get what you pay for.” While this may be true for large organizations that can afford to pay thousands of dollars per year for packages that integrate with CRM and other business systems, most companies are very well served by Google Analytics and its ever expanding feature set.

I expect to see a contraction in the web analytics market over the next couple of years. Even without the launch of the API, many organizations have found that Google Analytics is an improvement over the very basic features included with many web hosting packages (e.g. AWStats and Webalizer). The API will enable new functionality, including advanced reporting capabilities and integration with business systems, that make Google Analytics and related services even more compelling.