What Is Marketing Analytics?
Marketing analytics is the process of tracking and analyzing quantitative data points to help marketers understand the effectiveness of their marketing efforts. Analytics provide marketers with guidance on how the artifacts and assets they’ve built are working in the field. Have you ever wanted to know how that Instagram ad is affecting the win rate of your last product? Marketing analytics to the rescue.
Marketing analytics is the responsibility of marketers in most organizations. However, the largest companies may have entire analytics teams studying the data. These analysts support marketing operations and, through operations, connect to the overall marketing strategy.
Why Is Marketing Analytics Important?
Marketing analytics is important because the discipline allows the marketing team understand just how effective their investments are with the target audience or consumer base. Anything a marketing team creates not only takes a lot of time and money, but also tends to have an up-front maintenance cost through activations and continued ad spending.
For these reasons, a marketing team wants to inspire trust and be clear about the return on investment (ROI) they’re seeing. Marketing analytics not only mark the bets the team makes, but also help the team decide whether to invest, pivot or stop initiatives that aren’t working.
Marketing Analytics Benefits
- Calculate the ROI for Marketing Investment: Every campaign represents an investment in people and assets. Analytics help you see how that investment will pay off.
- Improve the User Experience: Your web analytics will give you numbers that signal some opportunity to improve the user experience (UX) as customers engage with your assets. You want to know how users find your campaign, what they do when they get to an artifact and how to capitalize on the treasure trove of data they leave behind.
- Plan Future Marketing Strategies: Your numbers are a great indicator of what works and how much risk you can take with future campaigns. Knowing how much something pays off (or doesn’t) helps you develop your marketing strategy.
How to Collect Data for Marketing Analytics
The data you collect from marketing analytics can include demographic information (e.g. age range, location) and psychographics (e.g. a customer’s interaction with your product and their attitude about it). All of these individual data points help give you a sense of what’s working (or not) and for whom. There are essentially three types of data.
- First-party data: Data that you’ve collected from your users through your own means. This is probably the most valuable data you can collect about how your users or customers interact with and feel about your campaign. For example, this can be what you see using Google Analytics.
- Second-party data: This is data you get from another organization with whom you are affiliated. For example, you might receive user or prospect data from an organizational partner.
- Third-party data: This is data you get from an organization with whom you’re not affiliated, usually through purchasing consumer data.
We have many ways of collecting first-party data including:
These are forms sent to potential customers to understand how they understand the problem your marketing solution is trying to solve, how they feel about your product and whether they would suggest your product to others.
This is a test of different forms of a campaign to see which does a better job of creating conversions. A/B tests are given to the same number of people. For example, if you wanted to test a title, there would be title A “This is A Test” and Title B “The Test is Here” to see whether or not there’s a statistically significant difference between how users interact with these two titles.
Organic Content Interaction
Organic growth means that potential customers and/or users are finding ways to interact with your assets without paid advertising. Most company’s SEO programs are intended to drive organic traffic and growth to a particular website or product.
Paid Advertising Interaction
To start collecting marketing data, ask yourself these questions:
- What are we spending marketing dollars on right now, and how are they driving sales? This is known as your ROI and will usually be the number on which teams report.
- How does our current spending compare to best practices or our own internal expectations?
- What does “good” marketing analytics look like?
- How much do we want to invest in tracking? Google Analytics is free but we’ll need the in-house expertise to set up tracking vs. out-of-the-box enterprise solutions.
Marketing Analytics: The Risks and Rewards
Marketing analytics is useful to help teams understand the ROI of their marketing dollars. When done well, marketing analytics can help align the team around a data-driven marketing strategy. Strong marketing analytics help teams make decisions in concert with the marketing creatives who become the face of the campaign and the brand itself.
For those who leverage marketing analytics, it’s important to note analytics are a way to communicate strategy, but not the strategy itself. Weak marketing analytics will paralyze teams into recreating the campaigns and assets over and over again. Worse yet, teams will ignore the analyses all together because it isn’t clear how the marketing analytics contribute to overall team goals.