Marketing Analytics and Why it’s Important
Knowing where to invest your marketing budget, as well as which marketing channels and tactics to prioritise, is crucial when it comes to enhancing your marketing ROI. Marketing analytics offers various tools to help you gain insights into which of your marketing channels are performing, and which are in need of optimisation. Not every tool works in the same way as some offer diagnostic and descriptive results, while others offer prescriptive or predictive forecasts.
Here, we break down what marketing analytics is and which tools you could use to help you navigate the different findings that different tools obtain.
What is Marketing Analytics?
At its core, marketing analytics is the practice of measuring, understanding, and optimising your efforts. Not all marketing analytics tools serve the same purpose. Some marketing analytics tools like Google Analytics are web-based and primarily offer website traffic insights, whereas Proof Analytics considers data from all marketing channels and investments to learn how the larger reality of marketing activities and investment impacts a business. Proof utilises these findings to project scalable routes that a company could follow in order to strategically maximise their marketing ROI.
Different Marketing Analytics Tools Meet Different Ends
Before digital marketing took off in the way we experience and use it today, general marketing efforts were rarely measured. And if they were measured, it was only done manually within large-scale companies that could afford it. A business couldn’t, for example, attribute particular sales or lead conversions to a billboard ad or radio sound bite they paid for the month before. At that stage, there wasn’t a way to truly measure if these kinds of marketing efforts were successful or not.
With the rise of eCommerce, web analytics tools offered newfound means to analyse the engagement and KPIs of a company’s lead conversions. For over a decade, marketers have relied on these tools to measure website performance. As social media platforms multiply, so do the available tools to measure social impressions, customer demographics, and overall platform engagement.
These tools use historical data to indicate whether a Facebook ad led to a sale, for example, or if a social media campaign is attracting new site visits, but they don’t help companies follow new paths that will optimise their marketing ROI in the future.
Important factors that these marketing analytics tools don’t take into consideration include customer experiences, the propensity for consumer behavior to change, and the cause and effect of time delays or escalations between marketing investments and marketing gains. By utilising the right tools to examine these kinds of factors, companies will be given new insights to help bolster their marketing ROI.
Marketing analytics tools for the web and social media may evaluate past and present online activity, but without stepping back to view a whole picture of how all things correlate over time, no company will truly be able to forecast the impact of their future marketing efforts.
The Bigger Picture
You could solely evaluate the rate of your lead conversions and sales online, but that would only offer insights pertaining to the tools of descriptive, diagnostic, and process analytics.
This approach of marketing analytics questions:
- What happened when previous sales were made?
- Why did a sale happen?
- How did the sale happen?
- Could it happen again in the future?
- What could one do to ensure it happens again?
For each of these questions, you’ll find marketing analytics tools that provide companies with tactful answers. Instinctually, marketers will focus on attribution models and customer journeys to determine where sales or bookings came from so they can replicate that journey. In other words, they view the history of activities to try and understand what may work. But this presents the risk of only evaluating one’s company through a lens that is myopic and confined.
A marketing analytics approach that includes predictive and prescriptive tools, however, will take a big-picture look at all aspects of your business through a lens that is much wider. Instead of only trying to answer the aforementioned questions, some examples of questions this approach may ask is:
- What marketing tactics can help us drive our sales for the rest of the year?
- What marketing channels can we use to optimise ROI and find the fastest route to growth?
If you were to follow a big-picture approach instead, you’d discover more about the performance of your marketing activities at present, as well as what tactics you could pivot to optimise your marketing efforts in the days to come.
The following five analytics tools demonstrate how a holistic approach to marketing analytics utilises the knowledge of insight, foresight, and hindsight to improve a company’s marketing ROI.
Descriptive analytics study the history of a brand’s past strategies to learn which marketing tactics failed and which were successful. This offers valuable hindsight that marketing departments can learn from when it comes to knowing which strategies worked, and which didn’t. Truly understanding what had failed before can help brands steer clear of the same route going forward.
Diagnostic analytics examines a company’s data to learn why past lead conversions were made. This form of analytics is often coupled with drilling down and data mining since it performs an in-depth search for valuable insights like sale patterns that could assist a company in the present.
Unlike descriptive analytics, process analytics offers insights into how sales were made, as well as providing real-time reports on current marketing efforts. Through the use of attribution modelling, process analytics can evaluate the customer’s journey and attribute the cause of sale accordingly. This includes offline activities. Once companies have this end-to-end visibility, they can take actions to optimise current marketing campaigns in real time.
This form of analytics uses the findings gathered by diagnostic and process analytics to forecast changes in the marketplace, as well as consumer behaviour. It’s an analytics tool that maps out likely future scenarios indicating which channels a company should follow to improve their marketing ROI.
Most commercial analytics tools only assist brands at a diagnostic, descriptive and process level, but with predictive analytics tools, you enter into the arena of a big-picture marketing analytics approach. Here, the realities of the world come into play when drawing insights.
Prescriptive analytics offers suggestions that help companies invest their marketing budgets in the right channels at the right time, so they reach their intended business goals sooner. It ultimately interprets and transforms whatever data is collected into actionable insights, giving brands the foresight to make well-informed business decisions.
A big -picture marketing analytics approach goes beyond mere website stats or SEO rankings to bring you valuable information that will help you make holistic decisions about your business. It offers an important set of tools that can maximise your ROI, because it provides the full picture of how your marketing strategies are actually performing. With such insights, you’ll know when and where to invest both your budget and marketing efforts.
Your Route to Value
Finding the right platforms designed to meet these challenges is incredibly important when applying marketing analytics to your business.
Proof BusinessGPS™ is a marketing optimisation platform established to address business questions relating to what will happen in the future, while also offering guidance on how to actually make something happen in the future. Our platform primarily employs predictive analytics tools within the marketing analytics stack to help brands make the best decisions about their future marketing investments.
We deliver insights and statistical visualisations that demonstrate a company’s journey in a present, past, and future capacity. Our interpretation of data allows us to project impactful routes that will lead your business to greater marketing ROI.
The Proof platform is a valuable tool for marketers, analysts, CMO’s and business leaders alike. To learn more about how you can measure and optimise your brand’s marketing efforts, with us today to find out more.