What Is Marketing Analytics?

A mathematical subject that analyses patterns in marketing data to produce practical knowledge that can be incorporated into marketing strategies to boost marketing effectiveness. Analytics employs statistics, predictive modelling, and machine learning to find insights and offer solutions. Forecasting the weather, baseball statistics, and life insurance policies employ analytics. Analytics are essential in digital marketing to evaluate marketing impact, foresee marketing trends, and improve user experience (UX) to boost sales.

The age of readily accessible data is upon us. You may access information about your exercise routines, sleeping habits, and even medical information using your smartphone at home. When conducting business, cookies and other similar tools can gather data about your customers.

Almost everything you need to know can be found online, including the products your customers buy and the age groups who frequent your website. If necessary, you may also dissect this information down to the individual level.

Ultimately, what you do with the data counts, not the data itself. The foundation of the marketing analytics process, data collection and analysis, has the power.

What is marketing analytics?

Marketing is the management process in charge of identifying, foreseeing, and affordably satisfying customer needs. A method or strategy that is utilised to increase ROI (Return on Investment), profitability and brand recognition among the audience or end users is referred to as marketing analytics.

Another critical aspect of marketing analytics is that, with the correct data, you can transform your company’s operations into a profitable strategy by spotting potential new markets, customers, and marketing opportunities, among other things. Every step of the marketing process may benefit from using customer insights supported by analytics. One of the numerous efficient ways to do this is by fusing analytics with other business inputs and related methodologies.

There are several marketing life cycle methodologies used. However, in this case, we’ll focus on the most typical, frequently used by enterprises. We’ll look at the implementation or integration of marketing analytics at each stage. The life cycle that comes after is significant and related. It is one massive, never-ending cycle.

What is the importance of marketing analytics?

Knowing how to gather, combine, and analyse data may enable you to glean pertinent insights and have an informed impact on your organisation.

1. Improve the user experience

By gathering and analysing first-party data from your customers, you may learn how they feel about using your website and product, whether their feelings are expressed explicitly (for example, in a survey) or implicitly in their actions (for example, in their behaviour), having this qualitative and quantitative information can help your organisation make changes that address their needs and increase the likelihood that leads will become customers (for example, leaving the website shortly after loading the page).

2. Calculate the return on investment in marketing.

Calculating the financial gain associated with specific marketing channels or campaigns is a fundamental goal of marketing analytics. To calculate the return on investment for particular marketing activity, use the method below:

ROI = (Net Profit / Cost of Investment) x 100

Consider releasing a $1,000 video that highlights the advantages of your product. When you track how many people visit the product page on your website after viewing the video, you find that 30 new consumers joined as a result of it in a certain amount of time. If your product costs $50 and each new lead buys one, you may attribute $1,500 sales to the video. The net profit, in this case, is $500.

The marketing effort may be considered profitable when the ROI is positive. Without information on the source of leads, it would be impossible to calculate the financial impact of specific actions. Calculating return on investment (ROI) is valuable for determining which marketing strategies bring in the most money and proving a project’s value.

3. Create a strategy for upcoming marketing initiatives.

By giving knowledge about your customers and the ability to assess the ROI of your marketing efforts, marketing analytics provides your company with the possibility to create data-driven initiatives.

By analysing marketing data, you may discover what’s working and what isn’t and how your customers feel about their encounters with your product and website. You might also get a complete picture of how your marketing efforts affect your company.

You could make plans if you had this information. What activities should you increase to reach your quantitative goals? Which endeavour should be dropped from the projects since it didn’t generate any fresh leads? You might use data analytics to help you plan and respond to these questions.

Why does marketing analytics matter?

Analytics is more than just a nice perk. It’s one of the best ways to comprehend your customers’ experiences, customise your outreach, and determine what aspects of your campaigns are successful and unsuccessful. And having this expertise is essential for your next online marketing endeavours. A few examples of what you can do using marketing analytics are as follows:

1. Be specific with your claims.

Numbers have influence. You may persuade your CFO that content draws in clients or that 72% of marketers believe content encourages client involvement. The likelihood of getting finance is higher with the second choice. People are more inclined to pay awareness to your arguments when you include pertinent statistics.

You can only imagine in broad strokes without specific marketing data points, such as your ROI before and after a campaign. When certain advertising ran, either your revenue rose or fell. After you started PPC advertising, you either received more email list signups or didn’t.

Utilising analytics, you may compile information from that time frame and determine the marketing impact of a particular campaign. How many of the 100 email signups you got for your PPC campaign on the first day came from the ads themselves? Getting financing will be much simpler if you identify whether the marketing effort was effective. Additionally, you might spend less money on the initiative’s continuance if it fails.

With the help of marketing analytics, you can eloquently explain whether or not something is working and why. And with that “why,” you could convince others to modify their behaviour.

2. Transform data from marketing into knowledge

Today, consumer data and online analytics technologies are accessible to practically all businesses, regardless of size. Whether or not your organisation uses that data makes a difference. It can be interpreted and misused in the worst-case scenario, confusing your marketing staff.

To turn your marketing data into knowledge, you must subject it to the proper data analysis.

As an illustration, let’s say your monthly income was about $10,000 at the beginning of your PPC campaign. After your first campaign, your monthly receipts have climbed to $15,000. You should reinvest in the same advertisement.

Whatever depends. Did the month’s sales generally increase? Your products may gain popularity for unrelated reasons. And did any other advertising run concurrently on your website? How many of your customers did the PPC ad bring in? Data analytics provides the answers to these queries. With these responses, you may make marketing campaign selections based on data rather than gut feeling.

3. Compare and contrast the marketing data you have

You may evaluate your data sets against one another using analytics. As an illustration –

How did your profits from social media marketing, sponsored search, and organic search go against your expectations?
Were there any demographic differences in the money made?
How did the ROI of your PPC campaign compare to that of your Facebook ad campaign?
How much income did your PPC campaign generate throughout a lifetime compared to the first sale? Your marketing campaigns, content initiatives, and customer segments are all interconnected. If you comprehend the intersections, you can weed out irrelevant information and choose your company’s best course of action.

4. Continue to think strategically.

Every marketing article you produce has a specific goal: boost sales or draw more attention to your business’s website. You will learn more about your progress toward your goals as you analyse and utilise the facts at your disposal.

If things aren’t moving along as quickly as you’d like, you may analyse progress with the help of marketing analytics and spot potential problems. Your Facebook ad campaign had an ROI of just below 3:1.

Your team suggests trying something else, but you analyse the facts. Although your advertisement had a high click-through rate, there was a high homepage bounce rate.

PPC advertising wasn’t the problem. However, you wouldn’t have known without effective analytics.

What are the benefits of marketing analytics?

Advertising is more successful because of marketing analytics, which also automates a lot of laborious tasks:

Pay-per-click (PPC) advertising, email marketing, and social media are just a few marketing channels stakeholders can view holistically, thanks to marketing analytics. Analytics may explore more granular marketing trends while still explaining the big picture.
Solutions for marketing analytics increase lead generation by providing the data needed to optimise advertising efforts and target the most profitable clients. Better leads produce more sales and a higher ROI.
Analytics in marketing provide details on consumer behaviour and preferences. Then, businesses may modify their marketing initiatives to meet the needs of specific consumers.
Marketing analytics enables both proactive management and real-time decision support. Modern analytics tools enable organisations to use predictive analytics to foresee trends rather than react to them. They also make it easier for stakeholders to analyse data as it is received, allowing marketing to be adjusted as necessary in reaction to shifting patterns.

Where does the marketing data come from?

Before data can be utilised to assess progress toward goals, garner customer insights, and inform strategic decisions, it must be collected, aggregated, and formatted. First-party, second-party, and third-party customer data are separated into these categories.

First-party data is obtained by your business directly from users. Since it gives insight into your target audience’s behaviours, attitudes, and feelings, it is the most valuable data.
Information about customers supplied by another organisation is second-party data (or its first-party data). It can be advantageous if your companies are working together on a campaign, your audiences are similar or have similar demographics, or you have a relationship.
Data collected, rented, or sold by organisations unaffiliated with your business or users is third-party data. Third-party data is not the most reliable since it does not come from your consumers or a reliable third-party source, even though it is collected in large amounts and can provide information about users similar to yours.

While first-party data is the most reliable since it originates from your customers and reflects their behaviours, opinions, and attitudes, second and third-party data are as important. The following techniques can be used to collect first-party data.

1. Surveys

You may easily question your current and potential customers about their experiences with your product, their motivations for buying it, what might be improved, and whether or not they would recommend it to someone else by conducting surveys of your target market. Multi-question interviews and pop-up windows that request customer feedback on your website are also examples of surveys.

2. A/B Test

Against testing a hypothesis, an A/B test compares user interactions with a changed version of your website or product to an unaffected one. For instance, you might do an A/B test in which half of your clients see a red button (the control group) and half see a blue button if you think that visitors will be more likely to click on a button on your website if it is blue rather than red (the test group). Whether or not your idea was correct would be determined by the data acquired from the interactions between the two groups. A/B testing is a great way to test concepts and get behavioural data.

3. Organic content interaction

It is possible to track and use user interactions with organic content, such as blog posts, downloadable offers, emails, social media posts, podcasts, and videos, to determine their purchase intentions, position in the marketing funnel, and content preferences.

4. Paid advertisement interaction

You may also keep tabs on how people respond to digital ads you paid for to appear, whether they’re promoting your own website’s content or those at the top of search results. Knowing where your consumers are coming from and where they are in the funnel when they encounter your advertisements depends on this information.

What are the essential concepts of marketing analytics?

Following certain marketing analytics concepts may be essential to maximise efforts and resources. These critical principles of marketing analytics might be the difference between a marketing team that performs averagely and one that genuinely succeeds in research, planning, and execution.

1. Customer lifetime value (LTV)

Based on prior purchases, frequency of assets, and typical customer longevity, marketing departments may use predictive data analytics to determine a customer’s lifetime value to the organisation. They can now predict future ROI and client involvement because of this.

2. Return on Investment (ROI)

The profit or revenue increase attributed to marketing operations is referred to as a return on investment (ROI) analysis. Gathering this ROI information gives businesses another criterion to gauge the efficiency of their marketing teams.

3. Cost per lead

To determine how cost-effective a campaign is, the marketing department has to understand cost-per-lead statistics. The term “cost per lead” refers to the typical price of producing a new lead. Cost per lead may be used to calculate marketing ROI.

4. Lead conversion to customers

The percentage of leads that converted to revenue is another metric that marketing analytics may be used to evaluate. This information might help marketing teams target more leaders in specific areas more likely to result in sales.

How does marketing analytics help your business?

By monitoring and reporting on company performance data, diagnostic metrics, and showing indicator metrics, marketers will be able to deliver answers to the analytics queries that are most crucial to their stakeholders.

Regardless of the firm’s size, marketing analytics may provide critical information to support development. The process may at first seem too onerous for enterprise marketers. Both assumptions are false. Small and mid-sized business (SMB) marketers may think using analytics will not benefit their company.

Any size organisation may benefit from the data obtained if marketing analytics is appropriately evaluated and applied. With the proper marketing data and measures in place, marketers can improve.

Identify global marketing trends
Identify the programmes that were successful and why.
Observe patterns throughout time.
Calculate each program’s return on investment.
Project future results

Even though they were first hesitant, many firms are joining the game. More than 75% of marketers claim that their work is helping to boost revenue for their business.

What is a marketing analytics software used for?

By quickly compiling, organising, and correlating pertinent data, marketing analytics software overcomes the problems above and enables marketers to make real-time campaign adjustments.

Modern marketing systems are favoured because of how quickly they can store and manage enormous amounts of data. Having too much data has several drawbacks, one being that marketers cannot analyse it all in time to make real-time modifications. This is where the processing power of advanced analytics systems comes into play, enabling marketers to adjust content or ad placement as necessary before the campaign is over, potentially improving ROI.

Some systems, notably Evolution, employ unified marketing measurement to standardise and unify marketing data from many channels and campaigns. Additionally, to tracking consumer contact, sophisticated analytics tools offer insights into brand equity and how various audience segments react to creative elements. As a result, marketers are better equipped to determine the ROI of brand-building efforts and how to tailor branded experiences.

What are the different components of marketing analytics?

Marketing analytics is a multifaceted process to improve future efforts and investment returns. Typically, it includes:

1. A centralised database for marketing

Start gathering your marketing data as soon as possible, ideally all in one place, as analytics need access to detailed marketing data. The following details are necessary:

Information from earlier marketing initiatives
What made them who they were
Who their target customers were, and how much they cost
Without this data, analytics is essentially meaningless.

2. Time series analysis.

If your operating system does not store historical data, it is impossible to follow or understand marketing patterns. Sadly, many marketing and sales platforms are up and running but do not store recorded data.

This indicates that you will need to manually extract data from Excel files to analyse their metrics for earlier periods. However, time series analytics may offer a complete view of performance trends over time since the engine can look at more than just point-in-time data.

3. Enhanced attribution capability.

You can comprehend what moves the needle and maximises your marketing spending when you have all your marketing data in one location. But you’ll need technology that facilitates marketing attribution reporting.

Many systems offer the very minimum in terms of attribution capabilities, such as first or last-touch attribution or multi-touch attribution, both of which are limited by the channel type or time horizon. This can restrict your ability to develop into the most perceptive attribution models later on.

Make sure you know any technology’s attribution limitations before making a purchase.

4. Simple yet effective insights.

Business analysts are a tiny portion of marketers who want and need to assimilate analytics data. For this audience, user-friendly dashboards are crucial because they let you analyse data trends and get insight into their behaviours without wasting time learning technology, creating custom reports, etc. Simply make sure that your marketing automation system has robust yet user-friendly functionality.

5. Ad hoc reporting and dashboards

Professionals in marketing analytics, on the other hand, need to be able to delve extensively into data and create ad-hoc reports. In this situation, table-like reports and visualisations are most useful since they let analysts follow the trail of specific insights.

How to use marketing analytics?

Businesses can enhance their marketing efforts across all channels using marketing analytics. Companies should research the various marketing analytics programmes and select those that can benefit them.

1. Understand search marketing

Many firms have access to enormous marketplaces through search engines like Google, where people commonly start their purchasing expeditions. To promote companies and strengthen their online presence, search engine marketing (SEM) places advertisements on search engine results pages (SERP). In the United States, digital advertising revenue consistently breaks records, with search advertising making up nearly half of this total. Businesses may reach a wider audience using tools like Google Ads and Bing Ads.

Organisations need marketing analytics to monitor and maximise the success of their SEM campaigns. A random sample of browsers may be shown different versions of the same ad using SEM analytics, and the effectiveness of these ads could then be compared in real-time.

The technique of changing the structure and scope of a web page to improve organic search engine results is known as search engine optimization (SEO). A company may benefit from SEO by expanding its consumer base and enhancing its brand. Businesses may utilise software like Google Analytics to track key performance indicators (KPIs), evaluate the effectiveness of their SEO strategy, and make adjustments as needed.

2. Examine the usage of social media

98% of internet users, who make up a better than a third of the world’s population, consume an average of two to three hours daily on social media. Social media marketing might spark interest and demand from new groups of consumers, while search engine marketing (SEM) boosts income from those seeking specific products. Nowadays, many businesses and organisations, including craft sellers on Pinterest, fashion merchants on Instagram, and NGOs on Facebook, utilise social media as their primary or only form of marketing. Numerous social media platforms offer analytics tools and third-party options, such as Facebook Insights or Twitter Analytics.

Social networking site data may be analysed to provide helpful information for developing business or customer connections. For instance, marketers can set up an account to automatically post details about new features or products as soon as they become available, use analytics software to assess consumer sentiment through comments or responses without manually sorting through the data, and then adjust their social media marketing as necessary.

3. Boost your email marketing

Email marketing is mainly targeted at current customers who have subscribed to mailing lists or have already made purchases of goods and services, even though businesses can utilise email advertising to reach new audiences. Email provides a more accurate picture of consumer sentiment than other channels since current customers are more likely to respond to surveys or interact with advertising material. Popular email marketing solutions include Mailjet, Autopilot, and Salesforce Marketing Cloud.

Businesses may improve and personalise their email marketing campaigns with analytics. Companies may benefit from targeting their email marketing and customising their content to meet the expectations and desires of their customers by analysing how consumers interact with different email promotions. Businesses may utilise marketing analytics to see if customers are receptive to particular keywords, emails delivered at other times of the day, or links to content on specific topics.

4. Put predictive scoring to use.

Predictive lead scoring algorithms thoroughly picture consumer behaviour, advertising potential, and marketing opportunities using marketing data from all channels and internal data. These models include ML to develop consumer profiles, which businesses can use to predict how customers would respond to various outreach and advertising. Then, campaigns may be customised for specific clients to increase efficiency. A predictive scoring system, for instance, may rank people according to their likelihood of churning and risk of retention, which might help organisations prioritise marketing to their clientele.

Where to start the marketing analytics process?

There is no suspicion that the Internet is the only game in town. Statistics show that 90% of people in North America use the Internet. The quickest and most straightforward way to reach this sizable demographic is through paid search marketing, such as placing advertisements on Google Ads or other search engines. Reports and information on search marketing help your business in all areas, including product development and offline revenue.

As you do your search, bear in mind these five recommendations.

Five ideas for online marketing

1. Start with keyword research

A static keyword list is dangerous since it misses trends and details about new products or advances.

2. Create some PPC campaigns

To help raise your Quality Score, classify important keywords into relevant categories and write appropriate ad text. As a result, your bid will be lower, and your ad position will improve.

3. Analyse the Outcomes

The searcher and Google may see that your ad is relevant to their inquiry by looking for your keywords in the ad text.

4. Use natural search

80% of searchers prefer organic results versus paid adverts, according to Google. Include your top-performing keywords in your website’s content and produce pertinent articles.

5. Reiterate

Negative keywords are lovely since they guarantee that your advertisement only displays for relevant inquiries, preventing unnecessary clicks and spending.

What are the challenges faced in marketing analytics?

The following challenges should be taken into account by businesses when using marketing analytics:

Data integration is still a problem for many businesses and their marketing teams, making it difficult for analysts and engineers to get the necessary information. Companies must get rid of information silos because programmes for marketing analytics will not succeed if analysts do not have access to data from all marketing channels. For analysts to access integrated and readily available data, organisations should combine their data into a data warehouse.

Businesses must make sure they have management assistance and analytics specialists on staff. Some executives and marketing decision-makers are still reluctant to make the necessary upfront investments in staff or technology, and many marketers lack awareness of analytics. Spend time up front evaluating the present obstacles to analytics and then make the necessary hires or pitches to remove them.

Businesses must select the proper KPIs. Marketers may quickly become obsessed with either too narrow or too broad KPIs. To prevent this, companies should link performance indicators to clear corporate goals and objectives. For instance, a retailer may establish a specific target, like increasing profits by 10%, and then pick a few KPIs pertinent to its industry, such as sales per employee or average transaction value.

Any gathering of customer information poses privacy concerns. Organisations should create data governance and security standards to protect their customers’ sensitive information.

Final words

The right marketing analytics system must be in place for a marketing effort to be effective. You can ensure that your money is being spent correctly and increase ROI by analysing where your audience interacts and what is producing sales.