What's your last attempt at making a recipe in the dark? It's unlikely you've ever done it. It is reckless and unnecessary. It's not necessary and reckless.
As if making a mistake by trying to find a recipe, it is also dangerous and irresponsible.
This post will introduce you to marketing analytics and the benefits it offers. We will discuss the different types of marketing data as well as how to create your own reports. We'll also highlight three companies that have used digital marketing analytics to their advantage.
What is Marketing Analytics?
Marketing analytics uses data to assess the effectiveness of marketing activities or group marketing efforts.
Between 2012 and 2020, the percentage of projects in which marketing analytics were used to make decisions has varied from 29 percent up to 43.5 percent. This number may seem low but it shows that marketing analytics can be used to drive campaigns for your business.
Why is Marketing Analytics Important?
Before we get into the details, it is important to understand why marketing analytics are so important. Some companies might argue that analytics data doesn't matter to them, but others will rely on their ability to use the data to make a profit.
The greatest benefit of digital marketing analytics for businesses is their ability to forecast future results and understand large-picture marketing trends.
Marketing analytics can be used to help businesses understand their ROI on individual programs at a micro level. This will help them decide which programs they should cut and which ones to invest in. They will learn what they need for future projects.
Consider that advanced marketers, those who use 5 or more analytics tools, are 39% more likely to see an improvement in overall marketing program performance. Imagine how that growth could look across your portfolio!
Marketing Analytics Data
There are three main categories that marketing analytics data can be classified into when it comes to marketing. Below is a description and examples of the metrics that are used.
Descriptive Analytics
Analytics that provide descriptive insights can help you understand the state of your company. They answer the question “What is happening now?”
These metrics are only surface-level. These metrics provide a snapshot of your business today, but not any analysis or reasoning. These metrics include page views and revenue as well as units sold and average unit prices.
Diagnostic Analytics
Diagnostic analytics can provide insight into the root causes of descriptive analytics. They answer the question “Why is this happening?”
If you have any questions about the descriptive metrics, you can look into the diagnostic metrics. They look at traffic sources, bounce rates and exit rates as well as last touch channels to determine the root cause.
Predictive Analytics
Predictive analytics gives you a glimpse into the future of your company. Predictive analytics answer the question “What's likely to occur in the future based upon past and current trends?”
Predictive analytics, as you can see, requires more complex input. Predictive analytics is more difficult than descriptive and diagnostic analytics. However, it's possible to make connections and draw conclusions. You will typically need to use a predictive modeling tool, or a data analyst.
How to create a marketing analytics report
These steps will get you started if you have been given the task of creating a report on digital marketing analytics for your company.
1. Get the raw data
It all starts with the raw data. The raw data.
The tools and platforms that you use will determine how you get your data. There are many options, both paid and free, and you might find yourself using multiple to get a better picture.
Google Analytics provides in-depth website analytics for a nominal fee. You may have free analytics if you use an e-commerce platform such as Shopify. HubSpot, Domo and Tableau are all available as paid options.
2. Understand Your Audience
Before you begin compiling your data, there are two questions that you must answer. These are the questions:
- What is the purpose of your marketing reports?
- Who is your target audience for your marketing reports?
You can answer these questions by digging deeper. Here are the answers:
Is the purpose of pulling the data to see a snapshot or something more? Do you plan to present the report directly to a manager or top-level executives? What data will you use? What frequency will this data report be required?
An analysis of a business unit by the CFO of the company will look very different from a weekly report on the business's state to your manager.
3. Highlight the KPIs that Matter
Now that you have the data, it's time to decide the purpose and audience of your report. It's now time to make sure you highlight the correct data in your report. It all comes down to understanding which type of data analytics will be required to answer your audience's questions (e.g. predictive, diagnostic, or descriptive).
Let's suppose you are assigned to report on the launch of your new product. It was launched on the virtual shelves 2 weeks ago. Now it is time to assess its initial success. How does it look?
This is where you will find descriptive analytics. This includes metrics such as product page views, add-to-carts, revenue and conversion rate.
Your audience will want to know the reasons for these metrics. It doesn't matter if they are below or above your target goals. It's important to know what happened to get to where you are.
This will allow you to collect diagnostic metrics such as last touch channel and traffic source. You can also look into customer behaviors and demographics.
This data will allow your report to become more than just a collection of KPIs or graphs.
4. Visuals can be used to break down the data
Now you have the data and know your audience. You now have your story. It's now time to think about the best way to tell that story so it makes sense to everyone. This is where visuals can be a key tool.
Visuals can include charts, graphs, maps, funnels and Venn diagrams. These visuals can help you to see your data differently and tell your story better.
The good news about analytics tools is that they offer a variety of visualization tools, so you don’t have to reinvent the wheel. Microsoft Excel makes it easy to convert raw data into visuals.
Examples for Marketing Analytics
It is inspiring to see other businesses using marketing analytics to help them make decisions. These are just three examples to help you think about.
Marketing Analytics: Example #1: Costa Rican Holidays
Marketing analytics evaluations often use averages. This approach is not necessarily wrong, but it's worth looking at outliers to see if they are a good idea.
The conversion rate of Costa Rican Vacations websites has increased by 40% when you look beyond the average customer.
Casey Halloran is the CEO and Co-Founder of Costa Rican Vacations. He says that their team often looks at averages in order to make decisions. These averages include the average amount spent, the average length of stay and the average number travelers.
After digging deeper into the data, they discovered that the average number was far from the actual customer's metrics due to extremes of outliers. This meant that most of their customers fell on either one or the other end of the spectrum, with very few falling in the middle.
Costa Rican Vacations was able to make a change in its product offerings by using this information. They did this by increasing the slider for total budget to $20,000.
They were able to offer their services to a wider customer base, with a higher level of spending, and increased website conversions by 40%.
This example can also be used to benefit other businesses. We don't often consider the impact of marketing decisions on outliers when we only look at averages or medians. This is why it's important to take the time to understand your average customer and whether they are simply an extreme product.
Marketing Analytics #2: Allrecipes
Allrecipes is the largest online food company in the world. It has 18 websites across 23 countries, and over 85 million users. There's always competition, no matter how big your brand is. Allrecipes partnered with Tableau in order to understand the customer journey at every stage. This helped them maintain their competitive edge.
The primary goals of the brand were:
- improve user experience
- Increase video engagement
- drive mobile engagement
- inform product strategy
- Expand user base
- Increase advertising revenue
Allrecipes used Tableau, a business intelligence platform, to visualize data in one place. The brand was able achieve many goals through custom dashboards and collaboration with other organizations. Let's take a look at how Tableau's device level analytics allowed them to drive mobile engagement.
Esmee Williams (VP Consumer and Brand Strategy), stated that mobile usage has increased from 8% to three-fourths in recent years.
It was designed to increase mobile usage and provide a consistent experience across all devices. As a way of learning more about the user's interaction with mobile site elements, they conducted an A/B testing.
Allrecipes used Tableau's digital analytics collection and visualization tools to improve their mobile site. The goal was to optimize content and encourage photo uploads using an intuitive interface.
Although you don't have to run a cross-device test, these same results can be obtained by your business. However, mobile device engagement should be evaluated by your business to understand customer behavior. Only then will you be able to implement changes that have a tangible impact on customer engagement metrics.
Marketing Analytics #3: Netflix
Let's close our examples with Netflix, a giant of the industry.
Netflix's customer retention rate is 90 percent, which is much higher than Amazon Prime's 75 per cent and Hulu’s 64 percent. What is the secret to Netflix's success and longevity? Netflix claims that its success is due in large part to the collection of customer behavior data.
What data does Netflix gather and feed their algorithm? Here are some examples:
- What date and time did the user watch a particular show?
- Which device was used for the viewing of the show?
- Do they resume watching the show if the user stops the program?
- Is the user able to binge-watch a whole season of TV?
- How long does it take to binge watch it?
Netflix also considers the interactions customers have with their movies and shows. Does a customer finish a series if they choose a show based upon the recommended Netflix rate of 96 percent? Are they satisfied with the series?
Netflix boasts a huge data base with more than 150 million subscribers. This allows them to gain insights. This is crucial to their success as 80 percent of viewers are triggered by personalized algorithmic recommendations.
Marketing Analytics: Frequently Asked Questions
These are some of the most common questions regarding marketing analytics.
Do you have any other types of marketing analytics data?
There are prescriptive analytics as well as cognitive analytics.
What are the main components of a marketing campaign that uses analytics?
Digital marketing analytics campaigns should be sustainable, scalable, and cost-effective.
Which are the most effective marketing analytics tools available?
Your business's needs will influence your choice of marketing analytics tools. Tableau, Power BI and Adobe Reporting are just a few of the tools you should consider.
Do I need a data analyst for my business to interpret our marketing analytics?
Data analysts can provide valuable insights for your company. They are not necessary for small or medium-sized businesses.
Marketing Analytics Conclusion
Marketing analytics is much more than a collection data. It can provide valuable insights that would otherwise go unnoticed.
You need to assess all data when making major decisions about your company's marketing programs and campaigns. Only by analyzing past data and looking at current trends can you make the right decisions to improve your company's bottom-line.
How much of your company's marketing decisions can be made with analytics?
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By: Neil Patel
Title: Marketing Analytics: Everything You Need to Know To Start Leveraging it Today
Sourced From: neilpatel.com/blog/marketing-analytics/
Published Date: Tue, 05 Jul 2022 19:00:00 +0000