Why Google Analytics is Free?

Google Analytics is a digital analytics tool to understand user behavior in both Websites & apps.

Today, almost 40 million websites use google analytics which has become an indispensable tool in one’s digital stack.

Have you ever wondered why Google Analytics is free?

Though it's a freemium product that has $12500 per month in the paid version, the majority of businesses use the free version.

Google has already rolled it's latest version of analytics - GA4 free by sunsetting the universal analytics by 2023.

Why Google Acquired the web analytics tool?

When web analytics was a niche industry and online marketing was picking up, Google acquired Urchin website analytics in 2005 and rebranded it to Google Analytics.

The reason for the acquisition in google’s own words

“We want to provide Web site owners and marketers with the information they need to optimize their users’ experience and generate a higher return on investment from their advertising spending”.

Google Analytics is alive to support Google Ads Ecosystem

1. By dropping an analytics tag inside the website, Google analyses the web behavior of users and strengthens it Ad’s ecosystem service. In fact, it combs through search, email, video’s to come out with better targeting of ads.
2. Google Garnered 256 billion dollars in 2021, out of which 80 % of Google’s Revenue comes from Ads with 209 billion dollars.
3. As per Gary Fox, a leading consultant in the illustration attached- Google’s business model is based on a hidden revenue pattern where users don't pay for the service and third parties do to be part of the ecosystem.

If closely observed, Google analytics is falling under a free product to support the entire gamut of ad-related products.

1. To retain ad revenue, google has to retain its customers ie advertisers in its ecosystem. Advertisers can find value only if the ad spend gives them an optimal ROI which is done through analytics.

As google’s marketing and advertising products are heavily integrated with analytics, it gives them insights on how it is contributing to the business and in turn loosens their purse for ad spending and lets more advertisers to part of the system

More precisely, Google Ads users can effectively target their audience using Google analytics and be successful in their ad spending. If the Ad spending is bringing in results, and the urge to spend more on ads continues triggering a cycle of usage.

It's completely puzzling that Google is managing Google Analytics to support another product ecosystem by investing in the enormous data system.

This is not something new and unconventional when a company has to offer product A free to try product B.

Do you have any products in mind which goes with this product strategy?