What is Marketing Analytics?
Marketing analytics is the practice of measuring and optimizing your marketing activities. It constitutes of processes and technologies that enable marketers to evaluate the success and value of their marketing initiatives. Marketing analytics uses various business metrics, such as growth rates, ROI (Return on Investment) or payback, to measure the performance of marketing initiatives. This usually involves gathering data from multiple sources and channels and integrating into a single view.
Often marketing analytics are confused with individual channel analytics, such as web analytics. Below you can see some common Key Performance Indicators (KPIs) for web analytics and marketing analytics and how they differ from each other. The list of marketing analytics KPIs is not just large in size, but also requires you to pull data from many sources so as to provide reporting within the overall context of all your marketing activities.
In a nutshell, marketing analytics tells you how your marketing programs are really performing and identifies opportunities for improvement.
Why is Marketing Analytics Important?
Enables Data-Driven Decision Making
Marketers cannot rely on their instincts alone to ensure a successful marketing campaign. One of the most important aspects of marketing analytics is the way in which it enables organizations to make data-driven decisions. The executive team, or C-Suite, always wants to see quantifiable evidence and data supporting the CMO’s proposals and budgets. The CEO and CFO must see the value of your marketing initiatives, and analytics is the best way to show this value.
Measures Effectiveness of All Marketing and Sales Efforts
Marketing analytics enables you to monitor campaigns and their respective outcomes, allowing you to spend each dollar as effectively as possible. This results in having a more effective means of comparison of your efforts across campaigns, channels, timeframes, personas, etc.
Marketing analytics put data into context, for instance, enabling advertisers to spot indicators that can be used to improve ROI performance for their ad spend. Such insights help demand managers reallocate funds towards the most effective marketing channels and sales managers to better anticipate and prioritize opportunities. Thus integrating marketing analytics into the sales process can save time and increase revenue.
Identifies Trends and Patterns Over Time
Marketers often use multiple tools and they need data from multiple sources to be able to analyze and draw conclusions from their efforts. Tools that look at just a snapshot in time for a single channel can be limited, since they do not allow you to observe patterns or trends over time. Marketing analytics considers all marketing campaigns and initiatives across all channels over a span of time, which is crucial for getting deeper insights.
Here are some of the best practices for utilizing marketing analytics in the best possible way to understand and improve your marketing performance:
Ensure High Quality Data
Your analytics rely on your data. For the average marketer, data may reside in over 17 different tools and applications. Being able to access all that data in a single place, combine data from multiple sources, and build appropriate models and reports across all types of marketing data is a very powerful proposition for today’s marketers. Unfortunately, most marketers are still relying on point solutions provided by each tool in their marketing tech stack and lack the ability to analyze all their data in a single place.
Rely on Rapid Insights to Go Agile
Agile method is grounded in a rapid test-and-learn cycle. New information is an opportunity to learn, decide and act. Thus, every time we measure performance, it’s an opportunity to grow the business. And increasing the frequency of this cycle has an exponential effect on growth. Sometimes, you may have to make decisions based on day-to-day performance. You can not be effective if your information is outdated; tracking the right metrics and KPIs at the right time is the key.
Build Meaningful Dashboards for your Use Cases
Although it may be tempting to track as many metrics and KPIs as possible, it is better to start small with some use cases and related dashboards in mind and then grow with more metrics. In order to do so, define your goals and measure the outcomes and results for the use cases most important to you. For this purpose, it is important to understand what metrics should go on your dashboards.
Choose Appropriate Analytics Visualizations
Stakeholders and marketing teams should be able to understand their data if they are to gain meaningful insights from it. In building charts and dashboards, it is vital to choose the most appropriate data visualizations so you can interpret the data, find insights and take quick actions. You must choose an appropriate data analytics tool that enables you to customize your visualizations instead of using default charts for displaying data.
Consider Developing Models That Measure and Predict
Modern analytical systems incorporate machine learning and artificial intelligence (AI) to predict and prescribe. For example, besides reporting campaign performance, you can build an analytical model to predict and prescribe which customer segments are the most profitable and what sort of personalized promotion will best work for a customer or a segment. The combination of analytics and AI can help marketers make better decisions to increase revenue and use their budget more effectively.
Build Cross-Functional Connections Based on Data
One best practice is to create a cross-functional team that meets regularly, reviews the data, and advises next steps. It is important to make connections from one business group to the next or one business line to the next. For instance, if you consider the halo effect — the impact of marketing one product has an effect on the sales of another.
Marketing Analytics Tools
There are a variety of marketing tools available in the market, each with different goals, features, and strengths and weaknesses. Here are some of the marketing analytics tools that you could choose:
- MixPanel – MixPanel helps you track actions that users are performing on your site or mobile app (both Android and iOS).
- Heap Analytics – Heap analytics will automatically track any action taken by your website visitors and allows you to manually select the events you wish to analyze and preview in your dashboard.
- KissMetrics – A behavioral analytics tool, designed to access information about your customers and how they interact with your website or product. KissMetrics enables you to create A/B tests to see how changes you are making on your website or product can affect your results, and make sure you are choosing the right variations to help you reach your goals.
- Moz Pro – Moz Pro provides data that can help you with your SEO efforts and increase traffic from search engines. Moz Pro provides data on both your and your competitors’ rankings on search results, along with links analysis, keywords rankings and their trends over time.
- SEMrush – SEMrush offers a simple way to monitor your competitors’ brands, social media accounts and more. It provides insights into your competitors’ strategies in display advertising, organic and paid search, and link building.
- Cyfe – An all-in-one dashboard that allows marketers to integrate data from different marketing tools, and makes it possible to see it all in one place. Cyfe can track data from all your social media platforms, pay per click marketing channels, sales platforms and more.
- Hotjar – Hotjar has a few effective analytics features such as conversion funnel analysis, registration form analysis, feedback polls, and surveys, but it is known mainly as a heat maps tool.
- Chartio – Chartio is a user-friendly data analytics platform that allows everyone in your marketing team to access and analyze all their data from all their sources and applications. With Chartio, everyone can build beautiful dashboards as well as visualizations and share them across your organization or with your customers.
- Optimizely – Optimizely makes it possible to test different variations of any page or element on your website or product and measure their results so you can decide which variation is the best for reaching your goals.
- VWO – Visual Website Optimizer (VWO) is an A/B testing tool that allows you to create variations of your web pages, and gauge which of the variations serves you best in getting users to take your desired action like sign-ups, downloads, subscriptions, etc.
In summary, marketing analytics measures marketing performance to improve the ROI of marketing efforts. While many point solutions provide specific metrics, modern marketing organizations are embracing data analytics platforms that:
- Enable them to combine data from multiple sources and applications
- Are easy to use so that the whole team can be using them
- Have quick learning curves so that they can get to insights faster