What is Marketing Analytics?
Marketing analytics is used to evaluate marketing efforts in order to enable organizations to customize them for greater efficiency, more effective outreach, higher conversions, and maximum returns. They assess marketing activities in an effort to reach a pre-defined, quantitative goal. It is a math-based procedure of unearthing trends and patterns in marketing data which translates into actionable knowledge used to improve marketing performance.
Predictive modeling, statistics, and machine learning are utilized to gain insights and explore solutions to issues. Today, marketing analytics is considered to be an essential element of digital marketing since it helps companies understand the impact of marketing efforts, and also predict trends in marketing such as user behavior. This knowledge enables companies to improve their customer experiences, refine their marketing strategies for maximum effort, drive sales, and optimize the return on their investments.
Research has proven that companies that utilize marketing analytics are able to optimize decisions related to spend. To be effective, marketing analytics collates data from various data sources and combines them to present a single view which helps the marketers to identify problem areas, areas for improvement, and opportunities gaps.
Marketing Analytics in Business
Marketing analytics is used to drive growth but also retain business. While the data collected by most companies is just numbers, marketing analytics gives this data context, and that information benefits the creation and customization of marketing efforts for the maximum return. Businesses can use marketing analytics to segment their customers based on demographics, interests, and even online behavior. Or, it can be used to target specific groups with tailored advertisements and content. Marketing analytics enables organizations to understand the effectiveness of their marketing strategies, realign their efforts with their business requirements, and prepare for the future by predicting trends.
Companies use marketing analytics to gain insight into these categories:
- Customer insights: What do customers like, when do they interact the most, what excites them?
- Product analysis: What kind of products are in demand, what features are more desirable?
- Customer satisfaction: What can be done to ensure customer’s satisfaction with a process or product?
- Marketing initiatives: How can an organization tailor campaigns and messages to cater to specific segments, needs and channels?
- Future preparation: How can an organization deal with new trends and challenges in the future?
How Does Marketing Analytics help?
Marketing analytics is used to aid the marketing initiatives of a company across all marketing channels. While there are many benefits of marketing analytics, companies need to assess which ones are the most beneficial to them and adopt them.
Search Engine Optimization
Search engines are where consumers begin their buying journey and this makes it of utmost importance for companies. Search engine marketing is about advertising on the search engine result page to raise the visibility of the brand and promote business. Search advertising is usually responsible for nearly half the revenue earned from digital advertising. Marketing analytics is used to monitor and optimize the search engine marketing efforts.
Companies also make use of search engine optimization where the online content is structured so that the pages have a better organic search engine ranking. Search engine optimization enables companies to enhance the visibility of their brand and reach out to more consumers. Several analytics tools help companies analyze their optimization efforts by monitoring relevant metrics.
Social Media Analytics
Social media is a crucial marketing channel since nearly a third of the world’s population spends time on these platforms. Social media marketing is used to create interest and demand from new segments of consumers as opposed to search engine marketing which is for people already looking for specific products. Many small and mid-sized businesses are now using social media exclusively for marketing and sales. The analysis of social media data helps companies build their brand, business, customer relationships, and also refine their marketing strategy to address specific needs of the customers.
Marketing analytics can also assist with email marketing by helping companies personalize and optimize their efforts. By analyzing the interaction of customers with different email formats and content, businesses can customize their messages to satisfy the customers’ expectations and requirements. Analytics helps in assessing the correct keywords that should be used, the time-of-day emails are well received, and even the kind of layout that interests the customers.
Predictive lead scoring models make use of machine learning to create profiles of customers. The profile is built from the data collected from all marketing channels and highlights the customer’s behavior and interaction with the brand. This helps companies understand the opportunities and potentials that exist within various customer segments since the company can predict how customers will react to advertising and outreach. Campaigns can then be tailored to target specific consumer groups, increasing efficiency of the effort.
How to Use Marketing Analytics
Marketing analytics is not just tools and data. It only works if the marketing team is able to put that data into a perspective. To be able to derive valuable and useful insights from data, companies must understand how to utilize analytics and incorporate them as part of a holistic solution.
What are the Goals?
The business objectives need to be established first. Once the overall goals are set, drill down to the specific marketing campaigns and channels that will be used to identify and define the key performance metrics. Milestones and benchmarks also need to be determined so that the progress can be evaluated at every stage with their help.
Choose the Relevant Tools
A range of tools and techniques must be employed to reach the maximum benefit of marketing analytics. The past, present, and future data must be analyzed to understand the efficacy of strategies, their shortcomings, and how to customize them for upcoming trends.
Have the Right People in the Right Roles
It is important for businesses to also assess their capabilities in terms of analytical skills and then fill the gaps. It isn’t necessary that marketers who are brilliant at strategy are also great analysts. Businesses must invest in skilled analysts to support the marketing effort.
Implement Strategies with Thought
While gathering data and analyzing it is a great first step, marketing analytics will be of no use if the information is not acted upon appropriately. The overall profitability of a company can only be enhanced when the information is used to create successful marketing campaigns.
Types of Marketing Tools
Digital Marketing Analytics
This kind of tool collects data from various marketing channels. The tools fall into the categories of:
- Search engine optimization tools, which help brands surface their content organically
- Social media analytics, which focus on how customers interact with the company’s profile and posts
- Search engine marketing tools, which monitor the performance of search engine advertisements
- Display ad platforms, which analyze ads displayed online
- Predictive scoring models, which help marketers understand the probability of users making a purchase
Marketers may decide to use each platform’s analytics individually or in collaboration with others based on the marketing goals and business requirements.
These tools record the amount of time users spend looking at their screen while interacting with the app or company website, creating heat maps. Based on the way the users move their cursor around the site or scroll, the marketers can rearrange the elements on the application or website for optimum engagement.
These are used to test the impact of different messages and marketing methods on users. Alternatives options are tested to assess which one derives the best results in accordance with the overall marketing goals.
This sort of tool performs click analysis by tracking the users’ actions within a website or an app. The analytics helps the marketers to enhance the user engagement on their websites and apps.
Marketing Dashboard Tools
These tools collect and consolidate data to analyze and present them in a readable format.
Why Do Organizations Need These Tools?
Marketing analytics can be used to understand the journey of a consumer and figure out what works and what doesn’t. There are a few reasons why companies need marketing analytics.
The Numbers Game
The results of marketing efforts need to be quantified. Describing customer engagement through numbers makes it more digestible to management. Marketing analytics helps quantify the claims regarding marketing and advertising campaigns. Be it the number of email sign-ups after a pay-per-click advertisement or an increase in sales after running an ad, numbers from marketing analytics helps companies determine which strategy is working and understand the ‘why’. This not only helps in getting buy-in from stakeholders, but also makes marketing initiatives efficient and cost effective.
Transform Data to Information
Given the increasing number of marketing channels, every company ends up collecting a massive amount of data. However, without proper tools, most of it ends up sitting in some server without being useful or gets interpreted incorrectly, thereby misleading the organization. It is only through effective marketing analytics that this data can be converted into information which can initiate better decision making and support the creation of strategies that work.
Marketing strategies are goal oriented. Every step is taken to meet a certain goal, such as driving traffic, or increasing sales. With marketing analytics, it becomes easier to measure these metrics to track and monitor progress. It also helps in figuring out issues so that they can be resolved at the earliest.
Benefits of Marketing Analytics
Marketing analytics helps campaigns and marketing strategies become more effective.
Today, marketing is spread across several channels; pay-per-click advertising, social media, and email marketing being just a few of them. With the help of marketing analytics, a comprehensive picture of all the marketing channels can be acquired. This helps stakeholders to not just look at the whole picture but also shows them where they need to drill down to the nitty gritty of the marketing trends.
Using the insights from marketing analytics tools, companies can target the profitable consumers to increase sales, ROI, and thereby optimize their marketing efforts.
Marketing analytics helps companies gain valuable insights into the behavior and preferences of their customers. This can then be utilized to customize the marketing strategies so that they meet the needs of the customers.
Companies find it easier to analyze real-time data so that they can tweak their marketing efforts accordingly and are proactive in making real-time decisions. Predictive analytics can also be used to predict and prepare for trends instead of simply reacting to them.
Better Customer Experience
By analyzing data from customer interactions, behaviors, and actions, companies can create customized campaigns that fulfill the needs of the customers and provide them with a superior experience.
Challenges of Marketing Analytics
While marketing analytics can work wonders for companies striving to reach their business goals through marketing efforts, it does have its shortcomings. Here are some challenges that come with marketing analytics.
Integrating data from various sources is still a big challenge for engineers and analysts. Unless data silos are broken down and datasets unified, data will continue to be isolated. Without access to accurate data from all marketing channels, marketing analytics tools are not effective enough to provide insights. A data warehouse is a common solution for storing information in a centralized location so that data is integrated and accessible.
Before companies invest in marketing analytics tools, it is important to ensure that they have personnel onboard with analytics knowledge and expertise. It is not a given that marketers will have analytics experience as well as marketing skills. Companies need to make necessary hires or plan training to ensure their resources are well versed in the tools used for analytics.
For the analytics tools to work effectively, the correct KPIs need to be selected. Performance measurements need to be linked with specific business goals and requirements so that the metrics can present relevant data. While data does present a great picture, without proper guidance, it could be presenting a completely incorrect or irrelevant picture.
Since marketing analytics tools utilize customer data, privacy concerns should be a major concern for companies. Proper data governance and data security guidelines and policies should be in place to ensure that customers’ sensitive data is well protected.
Because marketing is an ever-evolving science, it is essential that companies employ appropriate analytics tools to measure their effort to ensure effectiveness of their strategies. Marketing analytics helps marketers to review their campaign’s performance and tweak them accordingly to optimize them for maximum returns.
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