Do you Actually Need Google Analytics? Probably not.

Do You Actually Need Google Analytics? Probably Not.

This is a question that in our opinion does not get asked enough. Do you actually need Google Analytics? (Or any marketing analytics tool, for that matter.) In a lot of cases, the answer should probably be no. Especially with an increasing “price tag” in the form of privacy legislature that introduces a liability risk to your organization when using tools like Google Analytics without the proper configuration (consent, privacy-enhancing features, etc).

From a purely business perspective, the core question is:

Can you take action based upon the collected data that will increase your profitability more than the potential cost of the implied risk you take on by collecting said data?

There are 3 main elements in that question:

  • Your ability to take action
  • Your ability to increase profitability
  • Your estimation of implied risk

The ability to take action is the most important one. Without the ability to take action upon data, the rest of this exercise becomes irrelevant. If you do not have the organizational ability to act upon insights or build automated processes driven by data, that is where the show stops.

The ability to increase profitability is hard to estimate beforehand, as it often only becomes clear after testing and learning. However, you can take a more broad approach which looks at the amount of website/app traffic you have and the amount of friction you think you can eliminate. (I like the RICE framework for this.)

Your estimation of implied risk is the one that is recently changing when it comes to Google Analytics. With a free tool without implied risk, there was basically no reason not to install it and take advantage of its power. Now, I would recommend that you expand your view of “risk” by not only including “the risk of getting fined” or “the risk of not being allowed to use the data anymore” but also “the risk of bad publicity” and “the risk of your employees no longer wanting to work at a company that does not take privacy seriously”.

Once this “additional profitability” of using data increases, you’re appetite for risk should also increase and your ability to manage risk by implementing safeguards should go up.

Some clear cut practical cases we see among our customers:

Do you spend a lot on Digital Advertising?

If you spend a lot of money on digital advertising, you’re also likely spending a lot via Google Search Ads and YouTube ads (to name a few). One of the great powers of Google Analytics is its ability to deeply integrate with the Google Marketing Platform. The ability to import goals across your advertising suite, have one single attribution model, and use Audiences (segments) to target across the suite is quite powerful and will likely render you a higher Return on Investment on your advertising spend. You’re advertising campaigns can use higher quality signals to perform better, and your people will work more efficiently.

Although you could build some of this yourself with separate tools, the fact that most of what you can do with the Google stack is free obviously creates a high threshold before considering other options. So if your marketing spend is high, your risk appetite for using Google Analytics in your organization should probably also be higher.

Do you have the Capacity to Optimize?

One of the most powerful integrations of Google Analytics 4 is the integration with Google Optimize to easily test website changes and improve your conversion rates and extract more value from your existing traffic.

Ask yourself if your organization has:

  • Enough website traffic to optimize with
  • The right people to create and analyze tests
  • The web development capacity to deploy new features

If the answer to those questions is yes, your risk appetite for running Google Analytics combined with Google Optimize should be higher because there is value to be unlocked. Especially if you advertise a lot within the Google Ecosystem, the ability to create test audiences across advertising and your digital properties is very powerful.

Do you have Digital Analysts that can Dive Into the Data?

If you have digital analysts available to dive deep into the data and uncover ‘hidden’ insights, a tool like Google Analytics might be worth it to you despite its implied risk.

However, these insights should likely be tied to the advertising and marketing part of Google Analytics. Otherwise, if it’s just about product analytics, for instance, use a digital analytics suite that does not carry the same risk assessment as Google Analytics does.

What if the above does not apply to you?

If the above does not apply to you, it might be the case that the implied risk of using Google Analytics outweighs the results it will get you.

Reminder: staring at numbers in dashboards and not acting upon them is, first of all, a waste of time, and second of all does not require Google Analytics to do so.

You have 3 options available to you:

  1. Minimize the risk as much as possible
  2. Pick an alternative solution
  3. Build your own solution

Minimizing the risk as much as possible is a good idea if you decide to continue to use Google Analytics. We’ve created a page where we keep track of Google Analytics current status with regards to the GDPR and a guide on how to implement Google Analytics “as privacy friendly as possible”. You should also probably look into setting up Server-Side Tag Manager.

There are a lot of great alternatives out there that can collect data to stare at in reports. These alternatives might not have a powerful analysis engine or a deep integration with your advertising stack, but they have a way lower risk profile than Google Analytics does. A great starting place would be these recommended tools by the French DPA. (Some of these tools even match Google Analytics from an analysis perspective!).

Going the “Build Your Own Stack” route with Snowplow as a backbone could be an interesting option for companies that have a really high potential profitability from data, but also an increased risk profile because of their public scrutiny for instance.

In Closing

Looking back at what I just wrote, it’s basically a really longwinded “it depends”. The main takeaway hopefully is that you should break free from the old paradigm of “Google Analytics is free so that’s why I use it” and re-evaluate based on your ability to take action, your potential profitability and your newly evaluated implied risk of the analytics tool you choose.

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