State of Analytics 2016Insights, Questions, and Concernsof Analytics Buyers

CONTENT03 // MARKET RESEARCH SURVEY SCOPE //

04 // HOW IMPORTANT IS ANALYTICS? //

05 // WHO IS USING ANALYTICS? //

06 // WHAT QUESTIONS ARE BEING ASKED? //

07 // WHAT ANALYTICS TOOLS ARE BEING USED? //

08 // CHANGING TRENDS IN ANALYTICS TOOLS //

09 // HOW MANY ANALYTICS TOOLS ARE BEING USED? //

10 // WHAT MAKES ANALYTICS PAINFUL? //

11 // KEY TRENDS, WHAT TO CONSIDER WHILE EVALUATING ANALYTICS SOLUTIONS //

Market Research Survey Scope

The aim of this market survey is to characterize and reveal trends about the current state of behavioral analytics, with a focus on event based analytics. For these purposes, event data was de�ned as any distinct action a user can perform in the product or any activity that can be associated with a user. This survey includes 145 respondents, ranging from C-level executives, VPs, directors, product managers, and marketing managers.

The survey covers the following topics:

• Importance of analytics in driving business

• Characteristics of the people who use analytics

• The types of analytics tools people are using

• Key pain points of analytics

How Important is Analytics?More and more people are incorporating analytics into their businesses. Among our survey respondents, 70% currently use or are planning on using event-based product analytics in the near future.Over half of the respondents (58%) currently leverage event-based analytics in their product:

Moreover, analytics-informed decision making has become the norm in a majority of businesses. Among our survey respondents, 86% found analytics to be critical or very important to driving business strategies.

Not only do people recognize the value of analytics, the vast majority already have a system in place to analyze event data and there is almost complete consensus on the importance of analytics in driving a business.

12%

58%

21%

9%

0% 20% 40% 60%

Currently using event-based product analytics

Exploring event-based analytics, but no plansto get started within the next 12 months

Not using event-based analytics, but planningto start in the next 12 months

No plans to explore event-based analytics

USE OF EVENT-BASED ANALYTICS

49%

11%

2% 1%

37%

Mission Critical

Very Important

Important

Somewhat Important

Not Important

HOW IMPORTANT IS ANALYTICS IN DRIVING YOUR BUSINESS STRATEGY?

Who is Using Analytics?

Analytics is important for business. So who is actually making use of it? This is where the data surprises us: it’s not just analysts and data scientists using analytics to gain insights. The majority of the survey respondents were in high- to mid-level management positions in product and marketing. This suggests that more and more companies use analytics for quantitative, top-down decision-making.

ROLE OF ANALYTICS USERS

DEPARTMENT

Analyst

C-Level

Data Scientist

Entrepreneur/Founder

Manager (mid-level)

Software Engineer

VP or Director

Other

30%

20%

25%

2%

5% 7%9%

Users of analytics were spread across a number of di�erent departments. Over 50% were either in product development and marketing.

5%

6%

2%

2%

38%

9%

9%

21%

4%

3%

0% 10% 20% 30% 40%

Product Development

Marketing

Software Development

Customer & Market Analysis

General Management

Other

Operations

Information Technology

Online Business (e-business, e-commerce)

Finance

2%

What Questions are Being Asked?Let’s look closer at the people in product development and marketing who are using analytics.

WHAT DO YOU WANT TO UNDERSTAND ABOUT YOUR USERS USING ANALYTICS?

53%

73%

43%

31%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Which competitors’ applicationsare they using?

What other applications are they using?

How can I increase engagementor retention?

How often are they using my application or visiting my site?

How are they discovering myapplication or website?

Analytics users who are in product development (i.e. VP of Product and product managers) would presumably use data to look closely at user behavior metrics like retention, churn, and engagement, which would then inform the product roadmap. 73% of our survey respondents were interested in answering questions about engagement and retention. There is a strong focus on wanting to understand what user behaviors keep them coming back to the app. Understanding the behaviors that lead to increases in engagement and long-term retention is fundamentally critical to reducing user churn and increasing revenue.

Analytics users in marketing would likely look at metrics like bounce rate, session length,channel tra�c, and conversion to inform marketing campaigns.

Answering these questions and being able to understand user behaviors pre- and post-conversion lets marketers optimize cross-channel campaigns and deliver experiences that will truly let marketers deliver what users want.

50%

43% want to know about discovery and attribution and 31% about frequency and stickiness, for example.

What Analytics Tools Are Being Used?

After recognizing the importance of analytics, businesses are faced with the “build vs. buy” dilemma. Should they invest time and money to build their own in-house data infrastructure? Or should they go with one of the many self-service analytics providers that exist in the space?

From this survey, the answer to the “build versus buy” question is starkly obvious:

Given that, which types of analytics tools do most people use? Some of the key providers of event-based analytics include: When asked about tools used both in the

past and present, Google Analytics was clearly still the favorite among our survey respondents; the same proportion of analytics users who used Google Analytics in the past, continue to use it currently.

USE OF OUT-OF-THE-BOX VSIN-HOUSE ANALYTICS TOOLS

Use out-of-the-box tool(s) in combination with in-house

Use out-of-the-box tool(s) only

Only use in-house tools

Most analytics users choose to buy analytics tools. An overwhelming 90% of the survey respondents only use out-of-the-box analytics tools, while 9% choose to use a combination of in-house and out-of-the-box analytics tools.

90%

9%

1%

Changing Trends in Analytics Tools

Also interesting to note are the changes in the proportion of people who used certain tools in the past

versus the present, with newer tools like Amplitude and Localytics gaining momentum compared to

incumbents in the �eld like Flurry, Mixpanel, and Adobe Omniture. Analytics users are beginning to realize

that simplistic tools that provide surface-level functionality like DAUs and revenue calculation are not

enough for the insights they need. To truly get user behavior insights into retention and engagement,

analytics users are willing to switch to more sophisticated tools that o�er cohorting, segmentation,

and funnels, alongside more complex data science insights.

USE OF SPECIFIC ANALYTICS TOOLS

14%5%

0% 20% 40% 60% 80%

Adobe Analytics(Omniture)

Google Analytics

Flurry

Localytics

Amplitude

Mixpanel

People who used this tool in the past

People who currently use this tool

33%17%

15%19%

85%84%

47%25%

8%19%

How Many Analytics Tools Are Being Used?

Interestingly, many businesses don’t just rely on 1 out-of-the-box analytics tool for their purposes.

This reveals two key points:

1. Data is siloed. With data divided up between di�erent platforms, it will be di�cult to not only access certain data when needed, but also to gain holistic insights into user behavior.

2. There is no one tool to understand user behavior. As of now, users of analytics have not found a single solution that meets all of their needs in one platform, which forces them to use di�erent tools for di�erent purposes.

CURRENT USE OF OUT-OF-THE-BOXANALYTICS TOOLS

Use only 1 out-of-the-box tool

Use 2 di�erent out-of-the-box tools

Use 3 di�erent out-of-the-box tools

Use 4+di�erent out-of-the-box tools

In fact, 60% use two or more di�erent analytics tools at one time.

5%

15%

40%

40%

What Makes Analytics Painful?The fact that the majority of analytics users have to use 2 or more tools to answer their user behavior

questions reveals that there is no one tool that solves all their pain.

Speci�cally, cost and complicated interfaces are the top pain points that our survey respondents

experience.

� 45% - cost

� 45% - complicated interface

� 39% - instrumentation

� 34% - �exibility

SUMMARY

The aim of this report was to understand the trends in event-based behavior analytics by analyzing its

importance in driving business decisions, characterizing analytics users and the types of tools they are

using, as well as highlighting their pain points.

TOP ANALYTICS PAIN POINTS

Cost

Complicated interface

Instrumenting analytics in the application

Not �exible enough to meet my needs

Scaling with event volume

Slow query speeds

Other

None

0% 10% 20% 30% 40% 50%

45%

45%

39%

34%

26%

22%

3%

1%

KEY TRENDS:

1. Event-based analytics is critical in informing business strategy. 86% of respondents found it to be very important or “mission critical” for their business. People in high- and mid-level management positions in product development and marketing are key users of analytics products, suggesting that data-informed decision making starts at the top.

2. Analytics users favor out-of-the-box solutions to in-house. The vast majority (90% of respondents) choose to “buy” versus “build.” They heavily favor out-of-the-box analytics solutions over in-house, with Google Analytics being the overwhelming favorite. Newer, more comprehensive tools like Localytics and Amplitude are also gaining momentum, likely because they o�er a level of sophistication that many users require to better understand their users.

3. There is no one tool to understand user behavior. Over half of our survey respondents resort to using 2 or more tools to meet their needs, causing

data to be siloed across di�erent analytics platforms. Furthermore, despite the number of solutions available, analytics users are still not free of “pain” - with cost and complexity (of both the analytics interface and the instrumentation process), being the top two pain points experienced by our survey respondents. Users are still looking for an analytics tool that can provide centralized access to data for anyone that wants it.

WHAT TO CONSIDER WHILE EVALUATING ANALYTICS SOLUTIONS:

• Do you want to build in-house, buy something out-of-the-box, or use some combination of both? • Who will be using analytics? Is your solution usable by data scientists and business leaders alike? • Does your solution have an interface that is easy to navigate? • What are the important questions you want to ask with your data? (e.g. What is my user

retention? Engagement? Stickiness?) What type of features would you be willing to pay for and how much?

• How much �exibility do you need? Do you need real-time dashboards and the ability to run SQL queries, or are static dashboards su�cient?

There may not be a perfectly painless event-based analytics solution yet, but there are still ways to get started. If you’re looking for an analytics solution in 2016, instead of building in-house, it may be worth starting with Google Analytics for simple metrics in tandem with a more sophisticated tool for user behavior (e.g. Amplitude, Localytics, Mixpanel). These different tools have different strengths so the key is to understand what your pain points are and then proceed to see which analytics tools will help solve them.

Amplitude