Still, Autoweb.com's ambitions will be for naught if it can't make its existence known to the world. To lure customers, it buys ads on Internet portals, such as Yahoo Inc. and America Online Inc. Autoweb.com has a "tremendous investment in online advertising," says Stone. "The number of impressions we have on Yahoo and AOL is mind- boggling" — more than a billion to date.
To understand that investment, Autoweb.com relies on three webhousing technologies. AOL and Yahoo use software from NetGenesis to collect and analyze Web log data relevant to Autoweb.com ads; Stone can access that data via the portals' extranets. He can also use software from NetGravity on the extranets, which the portals make available for administering advertising campaigns. The company downloads portal data into its Hyperion Essbase data mart, along with data collected locally, for analysis.
With this setup, Stone can monitor the company's ad campaigns running throughout the portal properties — calculating the click-through rate for ads in various venues, and shifting ad placements appropriately. The company also needs to be able to quickly recalculate the cost of those shifts, since placements vary in price according to the portal venue. (Click-throughs for car ads are assumed to be more valuable on a car-buying site, since the visitor is presumably more serious about the product.)
In the end, says Stone, webhousing not only improves Autoweb.com's return on investment from advertising, it helps the company better manage its relationships with Yahoo and AOL. "We're very much partnerships," he points out. "We need to understand our online ad placements at a detailed, powerful level."
That kind of understanding doesn't come cheap. Consultant Agosta says a company can easily sink half a million dollars into a clickstream data warehouse, once the costs of software, hardware, consultants, and integration work are added up. Companies should insist on some sort of proof of concept from vendors, such as a prototype warehouse with sample log-data analysis, before committing themselves.
After all, conventional data warehousing has been plagued over the years by project failures, and there's no reason to think that webhousing will be immune. Rumor has it that at least one E-business has pulled the plug on a disappointing webhouse. Apparently, even dot- coms know when it's time to cut their losses.
IP Confidential
The prevalence of Web traffic analysis has alarmed privacy-rights advocates. Last month, several groups asked the Federal Trade Commission to investigate online profiling, as conducted by Internet ad companies such as DoubleClick, Engage, and 24/7 Media. These firms use IP addresses and cookies to identify surfers and track their movements from site to site. Many, if not most, surfers are unaware they are being followed. "There's nothing wrong with the goal of trying to figure out what a market is," says Andrew Shen, policy analyst at the Electronic Privacy Information Center (EPIC), in Washington, D.C. "What's wrong is the means."
Acknowledging the outcry, 10 leading online ad companies, including the 3 named above, announced they would form a self-regulatory group and work to give surfers the ability to opt out of profiling activity. But that probably won't be enough to allay the concerns of groups like EPIC, which calls for legislation to establish fair information practices in cyberspace, according to Shen.
Autoweb.com CFO Thomas Stone sees a potentially vast benefit from online profiling, but doesn't think the practice should override consumer choice. "In every interaction [on the Web], consumers must be given the choice of whether and how to participate," says Stone. "At the end of the day, our business model — and all successful business-to-consumer commerce on the Internet, in fact — is about leveraging an empowered consumer."
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