Marketing is entering a period of unprecedented uncertainty and dramatic change.
The near future will see two kinds of marketing professionals: those who enjoy unprecedented, new levels of success, and those who are marginalized and fall by the wayside. The difference between these two groups is those who embrace marketing analytics, and those who don’t.
In this special, in-depth report, we’ll explore the most important change in marketing today: the rise of marketing analytics. We’ll look at the problems faced by marketers today, and explore why marketing analytics is the solution, and explore many benefits it offers. Finally, we’ll uncover tips and techniques for implementing analytics or boosting your existing program.
There are so many changes afoot in the marketing industry that some industry observers have coined the phrase “marketing anxiety.”
What’s driving this anxiety? In brief, it’s a lack of hard financial numbers. We live in a world that’s increasingly driven by numbers and data. Yet marketers continue to live by fuzzy variables such as brand impressions and social media likes. But these metrics have little direct correlation to the enterprise goal: making a profit.
Measuring marketing’s effectiveness has always been a challenge. But it’s worsened in recent years, as business and society in general have become more data driven. At the same time, rapid advances in technology prompt executives and others to expect everything to be measured, immediately and easily.
According to an IBM State of Marketing report, 57% of marketers cited “measurement, analysis, and learning” as the biggest bottleneck they face within their organizations. According to a survey in the Harvard Business Review, more than 80% of senior marketing executives are not satisfied with their ability to track key metrics such as marketing ROI.
At the same time, c-suite executives expect marketers to use analytics to measure ROI and other essential business metrics. According to an Ifbyphone report, 82% of marketers say their executive management expects every campaign to be measured. Most marketers are failing in this arena.
The Solution: Marketing Analytics
Marketing analytics can deliver these much desired numbers. Marketing is changing tremendously, and is undergoing many great advances. But by most accounts, the weak area remains marketing analytics.
What is marketing analytics? It’s the process of measuring, monitoring and analyzing marketing performance. It enables marketers to track their performance, and – by taking action on insights – continuously improve their effectiveness.
It also enables marketers to be more efficient, increase budget and effort where it’s most profitable, and minimize wasted spend. Marketers can compare the effectiveness and ROI of their efforts, channel by channel, campaign by campaign, as well as cross platform and enterprise-wide comparison. The bottom line: it allows marketing to optimize the enterprise’s return on marketing investment.
Marketing analytics is not to be confused with web analytics, and indeed the former has overtaken the latter. The Web Analytics Association changed its name to the Digital Analytics Association, acknowledging that the true value of analytics goes beyond the scope of web analytics
Marketing analytics differs from web analytics; the latter measures things of interest to a webmaster, like page visit and time on site. Marketing analytics takes a much bigger view, focusing on business metrics such as the leads and sales, and measuring which channels and campaigns are most profitable. Marketing analytics is also more people centric, and can reveal valuable intelligence about customers and leads.
So why is marketing analytics so underutilized? Why do marketers struggle so much in this arena? In brief, it’s the lack of cohesion, and the bewildering disparity of data sources.
Today there are more than 60 different marketing channels, an astonishing array, up from only five a few decades ago. Most of these channels have their own tools and technologies that are anything but unified with each other.
So for example, marketers might gather their online advertising data from their PPC management platform. Email statistics, in contrast, come from their email marketing vendor. Social media results come from yet another platform. And so on and so forth.
The result is that many marketers have no idea where to start. But they can’t ignore the trend; the change is here.
Marketing analytics is an integral part of the big data revolution. And big data is indeed a revolution. A.T. Kearney forecasts global spending on Big Data hardware, software and services will grow 30% per year through 2018, reaching a total market size of $114 billion.
Analysts are forecasting strong growth for analytics software. IDC predicted that growth will be particularly fast for solutions that are intuitive, graphical, and easy to use.
Much of business and society in general is moving towards data. The big data tsunami has already revolutionized many other areas of business, from manufacturing to customer service.
While marketing is one of the last frontiers in the data revolution, it’s now joining the revolution. And as a result, marketers are able to become more strategic, and base their tactics on quantifiable data. They’re letting go of hunches and whims, and embracing data-driven processes and strategies that generate clear bottom-line results.
Make no mistake: it’s the marketers who embrace analytics, and insights they reveal, who will dominate business in the future. As marketing analytics increasingly delivers information in real time, it can provide a strategic advantage in markets that can change almost daily.
Benefits of Analytics
Knowledge is power. One problem that has bedeviled business for decades is that marketing is based largely on hunches and gut instincts. One of the greatest benefits of analytics is knowing definitively whether certain efforts are profitable – or not. Knowledge is power.
Marketers are often undervalued, and often the first to see budget cuts in lean times. But sales must come from somewhere. Analytics is the most powerful way to prove to c-suite that marketing is worth the time and investment.
In recent years, it has become amazingly easy to prove with great precision metrics such as clicks and email opens. But with marketing analytics, you can go to the next level, and prove precisely how many of those opens became leads, and how many converted to sales.
Marketing analytics enables you with scientific precision to compare your different channels, and even campaigns within channels. Which of yesterday’s efforts generated more leads? Was it your blog post or your email campaign?
You might find your social presence mostly generates impressions. Your email campaigns, in contrast, are more effective at generating leads and sales. This then enables you to determine which channels are best at driving sales, and which of your individual marketing efforts are contributing to the enterprise financial bottom line.
Another value of marketing analytics is that it delivers valuable information about that which is most important to every business: people. Web analytics focuses on the performance of particular webpages. In contrast, marketing analytics goes much deeper to focus on the behavior of customers and leads.
You can determine how each individual or type of individuals discovered your website. You can find out how each individual interacts with you after first contact. For each individual, you can uncover his or her needs, potential value as a prospect, and best channel for interaction. This provides very valuable intelligence for improving business processes such as lead nurturing.
Marketing analytics can also provide valuable intelligence about your customers, industry, and products. You can discover what solutions they’re seeking, problems they’re having with your website and/or products, and how to solve them. You can even discover strategic trends within marketing analytics that reveal where your industry is headed.
Total Benefit of Marketing
Perhaps most importantly, marketing analytics reveals how your marketing efforts as a whole are working, the synergistic effect of multiple channels performing in concert.
On its face, it might appear that a particular social media campaign failed. But on closer review, that campaign set up a very successful email effort. Therefore it’s important to look at the whole, not just the parts.
Connect Marketing to Sales
Perhaps the greatest value of marketing analytics is its ability to prove a direct link between marketing and sales. To do this, you need to employ closed-loop analytics, integrated with your customer relationship management system.
Prove the Financial Effectiveness of Marketing
All of this allows you to measure and prove the effectiveness of your marketing, both as a whole, and each individual effort. You can discover the exact ROI of each endeavor, which reveals where to invest in the future for maximum ROI. Analytics also reveals wasted spend, and where problems need to be addressed.
Buyers Journey Insights
Marketing analytics enables you to discover which activities are most effective and valuable at each stage of the buyers’ journey. This knowledge enables you to create and effectively hone your lead management process. You can also rate and prioritize your leads and discover which channels and activities yield the best prospects.
Developing a Plan
Whether you are new to analytics, or want to go to the next level, you need start with a plan. Here are the five key components:
1. Define your metrics
2. Collect your data
3. Automate reporting
4. Do ongoing analysis
5. Take action!
Data Driven Culture
Another important facet is to foster a culture that’s data-driven, both within marketing and enterprise-wide. This means that all the key players value data, collect it, and use it to make business decisions.
Early in the analytics process, one of the key questions to ask is: what do you really want to know? This could be something pertaining to marketing or the enterprise in general. Begin with the end in mind. Focus on something meaty which, if you could change it, would really benefit the business.
Marketers often get caught up in trivial, tactical metrics such as:
- Site visits
- Average time on site
- Page views
- Bounce and exit rate
- Newsletter subscribers
- Social media followers
These are nice statistics and all, but they don’t contribute to the enterprise bottom. Think big. “Measure what matters,” says Neil Patel, founder of CrazyEgg.
Democratize Your Data
For marketing analytics to be most effective, it’s essential that all players have access to information. Stakeholders, team members and others need access to the information so they can make data-driven decisions.
Studies reveal why certain enterprises get more value out of analytics and business intelligence than others. The companies that profit most from marketing analytics are those that democratize and collaborate on data, according to a survey of 430 companies around the world, by A.T. Kearney and Carnegie Mellon University, in their Leadership Excellence in Analytic Practices (LEAP) study.
In contrast, the companies that are laggards in marketing analytics are those that focus on technology, rather than the culture.
Democratizing your data helps create a data-driven culture. This, in turn, creates an environment in which decisions are made based on data, rather than hunches or whims. It also eliminates bottlenecks and relieves the strain on overwhelmed staff such as IT.
Automate, Automate, Automate
Marketing analytics is most effective and efficient when it’s automated as much as possible. This has many benefits, from making the process as efficient as possible, to improving data quality by reducing or eliminating human error. Recent developments in technology and software facilitate this process.
Focus on Analysis
It’s very important that the majority of your time and resources in marketing analytics be spent on analysis. To that effect, collection and reporting must be as automated as possible. Google’s data experts suggest that 15% of your efforts be allocated to data collection, 20% to reporting, and 65% on analysis.
Tie Analytics to Bottom Line
Marketing analytics is not the end in itself, but rather a means to an end. And that end is improving the enterprise bottom line. Thus your analytics must be used to drive actions that increase conversions and sales. The more your analytics is tied to the financial bottom line, the more successful it will be.
Analytics is only useful if you do something with it. And value is created by taking action. Therefore it’s essential that your analysis yields an action list, and that list is acted upon.
Sometimes analytics can reveal so many options for growth, it can be overwhelming. An important step is to prioritize, and start with the one action that will make the greatest difference to the bottom line.
Measure, Analyze, Act, Repeat
Analytics is an ongoing process, not a one-off event. One of its beauties is you can see your results almost instantaneously. Measure your results, do analytics, repeat. And thus you begin the process all over again: measure, analyze, improve, and repeat.
Conclusion: marketing has long been the domain of creative individuals, where people hope to turn art into business. Marketing will remain a creative field. But the successful marketers of tomorrow will embrace art and science, the creative and the quantitative.
Marketers need to continue to use their creative talents to conceive new campaigns and new ways to better leverage channels. But they also need to increasingly embrace a scientific approach. Marketers who do not will fall by the wayside. Those who do will prosper and enjoy an increasingly important role in business.