You’re the analytics evangelist for Google. Doesn’t every marketer understand the importance of analytics? With hundreds of thousands or perhaps millions using Google Analytics, why would Google need an evangelist, and what do you see as the most important part of your job?

Numbers are hard to come by on this but in my humble experience a tiny fraction of people who should use data productively access it, and a tiny fraction of that actually end up using data effectively. We, as a universe, have a long way to go.

My role at Google is in two parts. In the inward facing part I am the “customer evangelist” as I help shape the vision, direction and features of 13 different Google tools that provide data to customers. In the outward facing role I help the top xx Google customers to leverage data more effectively.

The most important part of my role is that I am a small part of larger effort to create a data democracy in the online world.

All of the above is distinct from my role as a blogger (evangelizing the use of data in web decision making) and as the co-founder of MarketMotive (providing latest online marketing education and certification).

Avinash, following your first book, Web Analytics: An Hour a Day, what drove you to write your second book, Web Analytics 2.0: The Art of Online Accountability and Science of Customer Centricity? Did the field change so much since the first book?

The world indeed has changed a lot in two years, especially in three areas: user centric design, competitive intelligence and social media. There are a raft of new and delicious options that simply did not exist when I wrote the first book.

But the primary impetus behind writing the book was to address challenges that we all now face, challenges that present new opportunities (to engage and influence current and future customers) and how to measure success is a complex ever evolving ecosystem.

An example of that last point is in Chapter 9, if you see Figure 9.04. It makes you stand back and marvel at how we are measuring anything at all!

Even in a “standard” area like paid search analytics there has been so much evolution in the last couple years, analytics of which are covered in the new book.

Do you see both books as an evolution? I mean, would you recommend readers start with the first and then go to the newest one?

It is definitely an evolution.

People who have read the first book should feel that the second book is an immediate step up to a more evolved way of thinking about analytics, from the classic Trinity to the new Web Analytics 2.0. With each chapter there is a new way of thinking about what we already know and assumed. The second half of the book is where all the delicious stuff is that will help you change the game—it covers analytical techniques, social media analysis, competitive intelligence, new ucd approaches and of course things like multi-touch campaign attribution analysis.

If you want to start with the basic and take a gradual course then I recommend Web Analytics: An Hour A Day, but if you are willing to be a bit brave then Web Analytics 2.0 will get you to the goal faster.

I did want to point out that both the book are written for marketers, executives and analysts. You don’t need particular deep technical knowledge to become a analysis ninja.

Can you describe in a few words what is the main philosophy behind the book, the concept of Web Analytics 2.0?

Here is my definition of Web Analytics 2.0.

It is: the analysis of qualitative and quantitative data from your website and the competition, to drive a continual improvement of the online experience of your customers and prospects, which translates into your desired outcomes (online and offline).

Put simply, it is the art and science behind making intelligent decisions about all you do online—as a company, blogger, non-profit.

One sentence in particular caught my attention: “We’ve evolved from hits to page views to visits. Now we have outcomes.” Can you elaborate on that?

I have become convinced that more of the online world is not data driven because we have been reporting “silly metrics.” By that I mean hits and visits and page views and even visitors. What is the point of all those metrics?

They are all “aggregate” metrics that simply tell you “consumption”.

What they don’t do is answer this question: “What the hell happened?”

That question is important to answer because that is what matters to every senior decision maker, people who cut checks, people who will promote you and me.

Hence my near paranoid focus on first measuring outcomes—what happened as a result of all those people showing up? Did we make money? Are more people coming to my protest against cutting redwood trees tomorrow? Am I wasting my time marketing on twitter? What was the point of using video to sell micro-chips to B2B customers of Texas Instruments? So on and so forth.

God will welcome into sweet heaven people who focus on measuring outcomes. Because outcomes help businesses and people get better each day.

Your book has a lot of great advice for big companies trying to understand how their customers interact with their websites. But if I work for a Small-Medium Business, with a very limited budget, how can I go about implement this strategy? Any advice on whether search marketers should hire skilled web analysts or outsource the job to experts?

The book should be useful to businesses of any size. Throughout the book there are recommendations where to start and what to do first or what tools to use. For example on Page 13 it tells you that if you are a small biz then you must do x first, then y and then z and don’t worry about a and b. Or in Chapter 10 The Ladder to Analytics Nirvana gives a very specific road map for someone who is small to someone who is big. Same thing with Paid Search, Chapter 4 has the basic to medium stuff in terms of what to analyze for higher ROI and Chapter 11 is where all the juicy complex “I am going to be awesome” advanced stuff is.

My hope was to always provide a shallow end of the pool so everyone can get in, then those who want to do more can slowly, with confidence, move to the deeper part.

In terms of hiring… it would depend on your budgets and in-house sophistication. I have come to believe that if you don’t know what you are doing it is best to hire a consultant and put them on a “profitability plan” (i.e. you do the work I don’t know and we’ll both share the profit—not just hourly rates). Over time as your budgets increase, you become a medium sized biz, it is prudent to bring it all in.

Another interesting subject you deal with in the book is the web analytics career. What do I need to succeed as a web analyst? And if my main focus is on SEM, how can your book help me succeed?

You need to loooooove the web and all the glory and all the possibilities. If you don’t have passion for this medium there is no way you can put up with the work that is required.

Other main skills I look for: Initiative. Curiosity. An aptitude for data. Statistics 101. Self taught.

If your focus is on search then first Chapter 13 will help you plan your career effectively and help you create your own path for success. But most of all I am sure at some level we all understand that Search is not everything, certainly not paid search. The book will help you understand how the broad portfolio of online marketing works and of course how to be king by being data driven.

In the end it should make you a more rounded individual, and thus, I hope, a more marketable person in the job market.

You’re well known for the 10/90 rule. Why do you think it’s more important to put the emphasis on people rather than technology? How much is enough? How do you set reasonable goals and know whether you’ve achieved them, or to put your head down and try, try again?

Here is the picture that illustrates my concept of Multiplicity:

What it shows is the breadth and depth of the tools that are required to answer the four important questions: What, How Much, Why and What Else.

Even a few years ago for you to get access to tools would have required you to spend a lot of money, that’s not the case any more. Clickstream? Surveys? Competitive intelligence? A/B or multivariate testing? You got it, every single one has a 95% world class tool available for free.

So having tools (access to data) is no longer the key differentiator between companies, large or small. Having the brains to actually make sense of it all, look to the right tool to get the right answer, be able to actually analyze the data and not just data puke is not cheap. That’s where humans come in, that’s where the strategic differentiator comes in.

I had created the 10/90 rule almost five years ago when I was at Intuit. Never in my wildest dreams did I think it would actually be practical, but it is now. Every company in the world should not shoot for 10/90 (10 tools and 90 in people), experiment and find your balance. I think many people start with 10/90 and in a few years might morph to 35/65. No worries as long as you can so ROI impact.

But I have to admit, if you are not egregiously overloaded in the big brains (internal hires or consultants) you don’t stand a chance.

There’s a lot of buzz around attribution modeling, knowing the “value” of certain clicks to the overall conversion process. Is it important to know whether the last click was the major influence on a conversion, or will analytics packages increasingly try to understand the various steps in the overall buying funnel? If so, how?

This is the only question on which I’ll bow out from answering, it is complex and I think the reason we are in the soup we are is we look for shortcut quick answers. There are none. Of course I absolutely apply critical thinking to this in the book and provide answers.

Analytics systems are notorious for delivering vastly different interpretations of seemingly simple data—how users interact with a site. Why aren’t there more standards, and why are the reports from different vendors so different?

This is like asking a four year old boy how come he is so lame that he does not already exhibit the mannerisms and sophistication of a fully grown man.

Our industry is a baby, it is in a growth spurt, we must be patient and let things evolve. And they will.

Complete side note: It is utterly futile to wait for perfect data to make decisions and / or spend time comparing numbers between Omniture and WebTrends. What is the point of it? So we are more comfortable that one piece of data is 5% better than the other? Pause and think for 60 seconds how tv ratings are measured. It will horrify you how the data is collected and subsequently used for multi million dollar decisions. On its worst day the worst third party cookie based tool gives better and more accountable data for Marketing spend online. I personally don’t recommend wasting time trying to get the last 5% accuracy, simply not worth it. Implement tools correctly and completely. Don’t worry about the wife you just divorced. Worry about the one you just married and make a happy life with her.

Thanks so much for the opportunity to do this interview.

Thank you for spending the time to map your most interesting views of this subject, Avinash.

Editor’s note: Want to know more about Avinash’s new book, Web Analytics 2.0? He’s written a short overview of the book in this blog post. You can also buy the book through this affiliate link with Amazon and Avinash will donate 100% of the proceeds to two charities, the The Smile Train and Ekal Vidyalaya.

Justin Uberti, Google’s tech lead who I believe leads the Google Talk team, posted on his blog that Hulk Hogan visited Google’s Kirkland office. Hogan made his visit on Tuesday, November 3rd, as a signing event for his new book, My Life Outside the Ring.

Here is a picture from Justin:

I too grew up during the “Hulk-O-Mania” period, so it is cool to see him at Google. Also, big happy 35th birthday Justin!

Google’s co-founder, Sergey Brin, made a surprise visit at the Web 2.0 Summit last week. The video of his 18 minute interview with John Battelle is now available on YouTube. Here it is:

In summary, he talked about his thoughts on Twitter’s deal, Google’s Social Search, also a little bit about Bing and even Yahoo giving up on search. He actually touches on about a couple dozen topics within this short interview.

Here are some quotes from Brin’s talk that I thought I pull out:

Battelle asked Brin, what do you make of Bing? Brin said, “Ummm…” Then Battelle asked, are you a Bing user? “Oh yea, I use all search engines out there.”

Brin then added there are “probably a few dozen start ups doing a few interesting things” in search. Brin added, “even, prior to Bing, MSN’s Live.com had many interesting features also and a lot of those carried over. People just didn’t check them that often.”

Then Brin was quoted on Yahoo, saying “It is a shame that Yahoo plans to abdicate that area.” He added, “I do think Yahoo had a number of interesting innovations there and I wish they would continue to innovate in search.”

On Tim Armstrong leaving Google to run AOL, Brin said, “We certainly miss Tim [Armstrong] a lot. It is really good for AOL to have a leader like that.”

The discussion about Twitter was a bit awkward in the beginning. Battelle asked if he [Brin] had anything to do with the Twitter deal? Brin said awkwardly, “me personally?, I was certainly aware of it.” He then goes on to talk about entrepreneurship. But he did clarify “I did not try to buy Twitter.”

Brin also said, “People do not spend all their attention in the search box,” when defending critics about Google’s dominance. Battelle added, monetarily, they do kind of control the area. Brin replied “when we started Google, it was the least amount you can make,” when referring to ad buys.

Also, when talking about Google developing hardware. Brin said, “G1, we worked very closely with HTC on the design.” He added, “you can’t create software completely divorced from how the hardware is designed.”

On the book scanning project, Brin said “I’ve been surprised about the level of controversy there.”

Finally, here is a picture of special shoes Brin wore to the Web 2.0 Summit:

Matt Cutts, known as Google’s search spam tsar, recently had a hair cut. Many people from the search industry noticed Matt’s new hair cut at recent search conferences. In short, Matt lost a bet about a release date of one of Google’s products and as a consequence, had to shave the hair off his head.

Brian White, from the team Matt works on at Google, tweeted a link to a video of the actual hair cut. Yes, they made a pretty fun video showing off the hair cut process for all SEOs and search folks to enjoy in the industry. Here is the video:

Forbes has published its annual list of who has the most money in America and Google’s co-founders and CEO Eric Schmidt are among the very richest of the lot. At the top is perpetual leader Bill Gates. Among the top 100 roughly 10 percent made their money from tech or the Internet. However four of the top 11 (Google’s co-founders are tied at 10/11) are tech entrepreneurs. Here’s the top 25:

Eric Schmidt shows up at number 40.

If you’re feeling envy, remember what your grandmother said, “Money can buy a lot of things but it can’t buy you love or happiness.” Then there’s “if you’ve got your health you’ve got everything:” and finally, “They can never take your education away from you.”

Postscript: Thanks Gary Price for alerting us.

AOL announced today that it’s hired former Google employee Shashi Seth as its Senior VP of Global Advertising Products. While with Google, Seth was head of monetization for YouTube. Most recently he was the Chief Revenue Officer for Cooliris.

AOL’s addition of Seth is the latest in a series of hirings from the search industry — and Google in particular — going back to March when Tim Armstrong left Google to become AOL’s Chairman and CEO. Armstrong was one of Google’s longest serving executives, and AOL credited him for helping to “build one of the most successful media teams in the history of the Internet” at Google.

More recently, Google VP Jeff Levick left to become AOL’s President of Global Advertising and Strategy. PaidContent points out that AOL has also hired ex-Googlers Caroline Campbell and Erin Clift. (It’s worth mentioning that AOL also recently hired former Yahoo SVP Brad Garlinghouse, as well.)

There’s more discussion on Techmeme.

Matt Cutts of Google has blogged that Google is willing to hire Yahoo Search engineers. Matt said, “if you’re an excellent Yahoo engineer with solid experience in search, Google is hiring.”

Clearly, since the Microsoft & Yahoo deal, engineers at Yahoo might be a bit concerned about their job stability. Ask.com ran a funny poaching campaign recently to pick up Yahoo engineers. Microsoft said many Yahoo engineers will move over to Microsoft if the deal is approved. And now Google is hiring Yahoo engineers.

So if you are a Yahoo engineer and you want to apply for a job at Google, use this page to get started.

I’m a big fan of Google’s Chief Economist, Hal Varian. When Dr. Varian speaks we gain authoritative and important new information about how the Google AdWords auction really works. Information that we had no way of gaining on our own but that significantly improves our ability to manage our accounts and campaigns.

I also like him because there’s a Joe Biden-like quality to the way Dr. Varian delivers the truth (and I mean that as a genuine compliment.) His communications are based first in facts and only secondarily packaged and limited to fit the party line. The result is that along the way we learn, or have confirmed, a truth or perspective that the PR flacks and marketing spinners would probably rather have remained unspoken.

Dr. Varian’s first major communication was the ‘How AdWords Auction Works’ YouTube video. It’s the “Subterranean Homesick Blues” of AdWords videos—a long complex stream of previously unknown truths which demands repeated viewings.

In it, Dr. Varian explained the math behind the calculation of both position and CPC in AdWords. Suddenly we could quantify the economic cost or benefit of Quality Scores and Quality Score changes.

As Paris Hilton would say if she ever spoke without irony, “that’s huge.”

Now in a post on the AdWords Blog Dr. Varian and his team report that they have verified that conversion rate doesn’t vary much based on ad position. This is critical information in our quest to intelligently set bids and build bidding strategies. Calculating the “right” bid without knowing that conversion rate was relatively constant was difficult, to put it mildly.

If conversion rate is relatively constant, then revenue per click is relatively constant (we’ll assume for the moment that basket size isn’t varying by position either). This means that if we can determine the variation in cost-per-click at different positions we can rather easily decide the “right” bid to maximize revenue or profit.

All of this means that Dr. Varian eviscerated one of the core assumptions about PPC bidding—that conversion rate varies dramatically by position—which was held by a lot of smart people and around which many an algorithm has been written.

To be fair, there are more than a few people who remain skeptical of Dr. Varian’s claim. I’ve seen blog posts and spoken to some smart and experienced paid search practitioners who believe they’ve seen data which contradicts his point.

Is Dr. Varian wrong? Are his claims too general? Are there marketplaces or situations in which conversion rate isn’t linear? Or was he able to hold the variables more constant, in terms of statistical analysis, than mere mortal paid search advertisers can because he has access to more and purer data? We don’t really know, but until proven otherwise I’m giving Dr. Varian the benefit of the doubt.

A new twist

But while the first impression is that Google’s release of this statistical analysis makes bidding easier, an aside Dr. Varian made as part of his explanation muddies the water again.

It’s in the comment where he explains that sometimes when you raise your bid your average position goes down. He says that as your bid increases the keyword you’re bidding on becomes eligible for new auctions. And in these new auctions, which you’ve just barely bid high enough to earn an ad rank that made you eligible, you’re likely to appear in lower positions, thereby lowering your overall average.

In other words, when you increase your bid, your ads should generally rank higher within the auctions where they were already showing—this is probably your intention when you raised your bid. But at the same time, a possibly positive but probably unintended consequence occurs: those same keywords with their new higher bids now trigger impressions for queries that they failed to trigger before. And for these new queries your ads are generally appearing in lower positions.

All of this is perfectly reasonable. The fact that the higher bid expands the range of search query eligibility is in line with what we know about the auction process, even if it’s a result many of us hadn’t considered. The problem is that it’s another example of AdWords giving us data that conceals what is actually happening. If you just looked at the data and made a reasoned analysis of it you would very likely draw the wrong conclusion. With a full understanding of the situation you’d know you really can’t draw any conclusion at all.

We’re buying advertising, getting data back which is ostensibly provided so that we can learn from our results and make rational decisions about improving our campaigns. And yet it turns out the data is inadequate and inconclusive. This isn’t the only situation where this is true, but it is a great example of how AdWords gives the impression of transparency while failing to provide the data we need to make smart optimization decisions.

Here’s what we now know:

• We bid on keywords and review reports showing our clicks, cost, revenue, and position.
• Along the way, we may raise or lower a bid to see the impact of that change on our results.
• The bid change not only affects our performance in auctions we were already entered into, but it also makes our keyword eligible for more or fewer auctions. But we have no way of knowing about our participation in these additional auctions – Google doesn’t offer an ‘auction count’ metric.
• The average position metric isn’t the indicator of impact we’d normally expect. When average position goes up, down, or stays the same after a bid change we have no way to correlate the two events. A basic assumption most of us had about bidding and reporting is shattered.
• For the same reason, we can’t draw any particular conclusions about resulting changes in our click volume or average CPC. Our bid change might be having the exact result we wanted – rising positions, more clicks, higher CPCs, and increased net revenue – when run against the same queries we were always matching, while at the same time exposing us to a whole new set of queries which turn out to be poorly converting wastes of money that lower our numbers to the point where it may be impossible to tell that our bid change largely had the desired effect but unfortunately came bundled with a horrible side effect.

Of course, we can simply look at the net result, conclude that our bid change was a bad idea, and reverse it.

But that’s not the way many of us believe we should have to manage our keywords or accounts. We’d like data to be provided at a high enough resolution so that we can make precise and deliberate decisions. If there are multiple auctions going on in relation to a single keyword, and we can make money in some but lose money in others, we’d like the data and options that would allow us to choose where and how we participate.

The fog is lifting

AdWords advertisers have spent a lot of time and money feeling around in the dark. The information Dr. Varian shared in his video and his blog post are very helpful points of light. The new ‘Bid Simulator’ in the new AdWords interface is another.

It’s great to see Google sharing this information, and providing these tools. I look forward to this trend continuing to the point where paid search advertising on AdWords is truly a fair and transparent—although still competitive—marketplace. I think that’s where Hal Varian is taking us.

David Fischer, who’s had his hands in Google’s AdWords, AdSense, and Book Scanning programs (among others), is on his way out. Silicon Alley Insider is reporting from an internal Google memo that Fischer will take a sabbatical later this month and return to Google “at the end of the year” in a new role that involves Google’s Geo, Local, and Check-Out products.

As VP of Global Online Sales and Operations, Fischer’s contributions to Google’s growth are hard to understate. Here’s how the company bio explains his work at Google:

David Fischer is responsible for Google’s online sales channel, which represents the majority of the company’s customers worldwide. David has provided leadership for the online sales and operations program since its inception in early 2002 and has helped build Google’s online advertising network into the largest in the world. He also runs the online sales channel of the AdSense publisher program, which enables website owners worldwide to earn revenue through partnerships with Google.

David manages operations for Google’s consumer products worldwide and runs Google’s Book Search scanning operations, working with libraries and publishers around the world to digitally scan books from their collections. In addition, he leads the Google Grants program, which has donated more than $300 million advertising dollars to thousands of nonprofits around the world. David has opened many offices for Google, including its sales centers in Hyderabad and Gurgaon, India as well as Ann Arbor, Michigan and Boston, Massachusetts.

Earlier this year, Google lost another long-serving ad executive when Tim Armstrong left to become AOL’s CEO.

Fischer will be replaced temporarily by Nikesh Arora, currently Google’s President of Global Sales Operations and Business Development.

There’s more discussion on Techmeme.

Postscript: Also of note, TechCrunch reports that ex-Googler Dick Costolo, who was the co-founder of Feedburner, is now the COO at Twitter. There’s all kinds of irony in that move, what with so many Twitter users saying they don’t bother with RSS anymore….

Jeremy “Shoemoney” Schoemaker has confirmed that the case between his company and Google AdWords employee, Keyen Farrell, has been settled. Jeremy said, “I can say that my lawsuit against the Farrells was settled,” in his blog.

For more history on this case, see the following stories:

• Keyen Farrell Countersues Jeremy Schoemaker, Claiming Defamation
• Why Hasn’t Google Cleared, Fired Or Suspended Accused AdWords Employee?
• An Update On ShoeMoney Vs. Google Employee Trademark Case
• Google Employee Alleged To Have Bypassed AdWords Trademark Policy For Own Benefit