Advanced tools and technologies have empowered businesses like never before. And now with intelligent tools and analytical capabilities, business leaders can make decisions based on real data and not just random facts gathered from Google. Normally, entrepreneurs and marketers rely on a single approach for business planning and subsequent performance management. However, with time, they do find out the limitations to that single approach.
Marketing efforts must be planned, keeping the diverse audiences and marketing activities in mind which requires a much more refined approach. Business leaders, with the help of marketing analytics, can utilize their assets to the best, while enhancing the productivity and improving the efficiency of their marketing team. One of Mckinsey’s studies reveals that using an analytical marketing approach can help the companies reduce marketing expenditure by 15 to 20 percent which is equal to $200 billion globally and can be invested for better things.
Understanding Marketing Analytics
It is all about managing the marketing activities through different data metrics. Every business organization generates massive amounts of data each day but using that data in enhancing the business processes is a road less chosen, even today. Using marketing metrics, you can learn about the performance of each marketing activity with different types of users. CMOs and managers of the marketing teams can determine the ROI of the marketing activities and look out for areas of improvement. It always makes sense when you talk with numbers.
Creating an impressive marketing strategy should not only look good but it should perform great too. But most importantly it should be measurable. So, rather than guessing what went wrong, marketing analytics gives you insights into what you can improve for better and more effective results and get rid of the things that are taking you down. That said, marketing analytics isn’t just limited to your business’s marketing department. Here, in this blog, we will understand how marketing analytics and insights can help any business transform into a more intelligent business.
Performance Marketing Over Mainstream Marketing
Anything that costs more than it returns, can never be a good investment. The same applies to your marketing campaigns. For any business to stand out and get ahead of its competition, the marketing team must focus on marketing performance metrics. To find out what is contributing to your marketing objective and what is weighing you down, marketing analytics must be integrated into your marketing software.
The core of marketing analytics is based upon keywords. Keywords being one of the most important marketing performance metrics, help you understand what your potential customers are looking for. Both paid and organic search marketing generate keyword data that can be analyzed to create effective strategies that produce optimal results. Here is how you can utilize the keywords in different areas of business:
- Design: Using keywords, you can determine what features or functionalities your potential customers like.
- Customer Behavior: Keyword frequency data can help businesses learn about the interests and preferences of the customers in order to have better interactions.
- Market Trends: Keyword frequencies change as per market and industry trends which makes it easier for marketers to learn and modify marketing campaigns accordingly.
- Support Services: Customer support services can be enhanced by understanding the key pain areas of customers reflected through keywords.
These are a few applications of marketing analytics in an organization but marketers and business leaders can create more innovative and unique strategies as per their thought process but the good news is that they will be able to measure the performance to go ahead with the strategy that drives growth.
Your marketing campaigns are generating good leads without marketing analytics and you are quite happy with it. So, why do you need marketing analytics, you might think.
It is time that you befriend the word optimization. It is not necessary that marketing analytics can prove beneficial only for businesses that are not generating desirable results with their marketing activities. Business growth is determined by increasing profits and decreasing business costs. So, the implementation of marketing analytics will allow you to see where you are overspending, thus, optimizing the marketing performance in the minimum budget.
Let’s see what’s more for your business in marketing analytics…!
Data-Driven Strategies
Are you one of those companies too, that allocate their entire marketing budget based upon their last year’s spend or the last quarter spend?
Apparently, this approach is never getting you anywhere but you will become one of the consistent players who use the same technique every single time but never learn better ways of doing it. Now, imagine if you could find out what marketing areas should be allocated more budget, you could maximize your ROI drastically. This kind of marketing strategy is called a data-driven strategy because it is based upon real numbers (please do not think that last year's budget was also a real number).
We have been focusing on the marketing funnel so much that we forgot to see that our customers have evolved so much. User behavior is now based upon several distinct influence moments that can or cannot be the order that you predicted. Therefore, with marketing analytics, you can get educated about the changes in your target audience’s buying behavior. So, understanding where your user is interested will help you define your own marketing funnel that boosts conversion rates.
Improved & Informed Decision Making Skills
I cannot focus more on how important marketing analytics are in making better business decisions. In marketing analytics, your business judgment combined with your creativity helps in recognizing new and unique possibilities of using data. Based on data availability and quality, you and your marketing team should put in the best efforts to look for insights that can be transformed into informed actions.
Choosing The Best Analytical Approach For Making Informed Decisions
To implement an analytical approach in marketing, you must evaluate the advantages and disadvantages of every tool, method, or technique that you have shortlisted in your market research process. Here are a few approaches that can help your business become smarter:
Marketing-Mix Modeling
MMM is an advanced marketing analytics approach that utilizes big data to find out the efficiency of spend as per channel. By linking marketing investments with other sales drivers, this approach involves external factors such as seasonality, competition, and promotional tasks that uncover the interaction effects as well as the longitudinal effects. Interaction effects include differences in online, offline, and social media models. Longitudinal effects are the modifications in individuals and segments over a period of time.
For MMM, you need high-quality data on marketing and sales which can stretch to several bygone years which can be challenging for some organizations. You cannot measure marketing activities that change only a bit over a period of time. Moreover, MMM needs trained users who can understand its model and its application to make informed decisions on spending.
Heuristics (Reach, Cost, and Quality)
When MMM is not possible, heuristics is the best analytical approach to follow. So, you can follow a heuristics approach when you have limited data or when the spending rate was comparatively consistent throughout the year, or for the always-on media. RCQ lets you divide each touch point into its components; the number of customers reached, cost per unique impression, and quality of the customer engagement.
All touch points are measured in the same unit, thus, allowing you to compare them with each other. While RCQ is quite easy and simple to execute, it can be tiresome and challenging to verify all touch point values considering the different channels.
Attribution Modeling
Attribution modeling continues to be effective and popular among the contemporary marketers for online media purchasing and marketing execution. It runs on different algorithms that determine how credits are assigned to online touch points to convert traffic into customers. Marketers, with the help of these credits, measure the comparative success of their online marketing activities that drive sales. Attribution modeling and other newer approaches such as regression methods, statistical modeling, and sophisticated algorithms are gaining popularity but these techniques and methods depend upon cookie data that limits the quality of data and in the end, makes it challenging to credit the importance of individual touch points accurately.
Leveraging The Marketing Analytics To Produce Business Insights
Most of the organizations prefer to stick to a single analytical approach and underestimate the capability of multiple marketing analytics tools used in accord. In an integrated ecosystem, you can leverage the best features of all tools and utilize the same in producing the most effective marketing results. So, you can implement MMM, RCQ, and attribution modeling altogether for all their benefits and minimize their limitations at the same time.
Placing values of distinct approaches on common grounds will help marketers in many ways. Integrating the results of these techniques into a decision-making tool can help track marketing performance in real-time and can be rectified as and when required.
Businesses need to carefully allocate the money to short-term objectives and invest more in the long-term goals. Considering the customers’ behavior is subjective to change as per their growing interests and varying preferences, 10 to 20% of the total sales come from the short-term effect. Thus, the marketing model should be a mix of both that allows your organization to measure the efficiency of the marketing activities over both these aspects.
Embrace the analytical approach for all your business processes & operations
Rather than relying on the team of analysts; both in-house or outsourced, marketers must take responsibility for working together with data scientists, digital analysts, and market researchers. It is a collaborative task that requires individuals or teams that understand analytics and understand business. The data analysis should not be restricted to marketing but the researchers and analysts must collaborate with other teams to discover data that can enhance the efficiency and productivity of corresponding departments.
Businesses must also pay attention to speed and agility. The comparative analysis must be done as soon as the actual results come out to help teams modify their strategies and adjust budgets. There should be frequent data reports that compare results over different periods of time to create a strategy that is best suited for the business.
Bottomline
With the pressure increasing on business leaders to produce results with maximum ROI, the need for innovative and effective marketing processes is increasing at a fast pace. While some companies simply implement a single tool to measure their marketing performance, some upgrade to a better approach of implementing an integrated analytical approach that offers actionable insights capable of driving business growth consistently.
