With a 2019 CMO Survey reporting that only 36% of marketers have quantitative tools for demonstrating the impact of marketing spend on company performance, it's clear that marketing analytics tools are a grey area of understanding for many businesses.
With a 2019 CMO Survey reporting that only 36% of marketers have quantitative tools for demonstrating the impact of marketing spend on company performance, it's clear that marketing analytics tools are a grey area of understanding for many businesses. With almost two thirds of marketers reportedly working without a full understanding of their campaign results, it’s more important than ever for business leaders to understand what marketing analytics actually is.
With a huge number of analytics platforms and tracking methods available, it is incredibly easy to gather large amounts of campaign data, as well as instanced views on what but actually using that data is where marketing analytics comes in.
In essence, marketing analytics (or marketing data analytics) is the process by which analysts look to identify meaningful trends and patterns in data to inform marketing decisions. Put more simply, marketing analytics is the path to making data-informed decisions, using them to optimise a business’ marketing spend towards strategies which actually deliver the highest impact (and, ultimately, ROI).
Marketing analytics is often seen as a subsection of, or contributor to, business analytics, the process of identifying meaningful patterns in data to inform larger scale business decisions. Many departments employ business analytics, and with the impact on a business that marketing can have, there is a clear case for utilising the huge amount of marketing data available as a discipline alongside sales analytics, financial analytics, and so on, helping to give context to (and drawing context from) these partner disciplines.
The differentiator between just having oodles of data, and recognisable marketing analytics is the ability to use the numbers, to process and deploy them in a way that strongly influences strategy, and gives your marketing direction. So marketing analytics should be a vital decision-making tool for answering strategic marketing questions, including:
- Audience & Segmentation Targeting: Who are we going to target with our marketing activity?
- Channel Targeting: Which marketing channels should we use to reach these audiences?
- Messaging: What messaging and creative assets should we focus on to sell to these segments?
- Budget: How much should we spend on awareness? How much should a lead cost? What’s our cost of acquisition through each of these channels? How can we spend less to generate more revenue?
- ROI: What’s our return on investment in each channel? Which activities are driving the best ROI?
- Strategy: Are our campaigns working? What is the most effective combination of Audience, Message, Budget and so on? What were our past successes, and how will they affect the future?
The importance of these questions cannot be understated, and by making marketing analytics an integral part of your brand’s marketing and operational efforts can be key to ensuring that you have all the answers you need. However, the business case for this close integration can be challenging for marketers to put forward, especially in organisations where the benefits are more obvious at the ‘sharp end’ of marketing operations - that is to say that it’s easier to see how marketing executives benefit from analysing the performance of their individual digital campaigns, but it's not so obvious as to why this is useful to the CEO.
At a very basic level, analytics helps marketers make better decisions, which consequently helps drive more revenue, leads, interactions and so on - and, if coupled with efficiency and cost savings, strongly impacts ROI and the bottom line for the business. A recent study by McKinsey and another by Invesp found that analytics and data-driven businesses are:
- 23x more likely to succeed in customer acquisition
- 6x as likely to retain their existing customers
- 19x as likely to be profitable
- Likely to generate 5-8 times more ROI
Being data-driven doesn’t need to be complex. In fact, the beauty of this is that it can be made as simple as possible to execute, alleviating concerns over resource & time-sapping costs to the business. There’s no point in replacing poor strategy & poor marketing spend efficiencies with poor operational ones, leading to no positive impact on the bottom line. According to Forbes only 13% of marketers state that they are confidently making the most of the marketing data available to them, whilst around 40% are looking to increase their data-driven marketing budgets – suggesting that businesses that adopt marketing analytics ahead of the competition will have a distinct advantage!