The importance of marketing data analytics

Brands spend an average of 13.8% of their total budget on marketing, so there’s no question that marketing is one of the most significant drivers of growth for businesses.¹ But there’s a difference between a generic marketing campaign and an effective marketing campaign, and it comes down to making use of marketing data analytics.

Marketing analytics is the lifeblood of any brand looking to make a more meaningful impression on consumers. Every organization should crunch marketing-related numbers to reach logical, informed, and profitable decisions.

However, as of right now, only around 50% of all marketing decisions rely on marketing data analytics—and businesses that hope to find continued success need to bring that figure closer to 100%.²

Here’s why.

The lowdown on marketing data analytics

Before we dive too deep into the rabbit hole, let’s ensure we’re crystal clear on a few terms: When we talk about marketing data analytics, what do we mean?

“Marketing data” refers to any bit of information that brands can use to make marketing decisions. This includes customer, operational and financial data, such as:

• First-party customer data
• Third-party market research
• Sales data
• Product reviews
• Current marketing costs and ROI
• Content marketing engagement scores

Marketing data analytics refers to the collection, interpretation and (most importantly) application of this information. The ultimate goal? Develop more effective, more successful marketing strategies via fact-based research (i.e., not gut-feeling reactions).

Essentially, marketing analytics is a tried-and-true practice that allows marketing teams, product developers, and sales departments to stop guessing and start knowing. There’s a reason the estimated share of the budget for marketing data analytics is expected to increase by almost 50% in the coming three years.³

Why marketing data analytics matter

When it comes down to it, marketing analytics is all about developing a better and more nuanced understanding of consumers. The better a brand knows its audience, the better it can respond—even anticipate—current and future needs.

So, what benefits do marketing analytics offer in practice? Below, find seven ways that analyzing marketing data can lead to better campaign performance.

#1 Data informs clearer, more personalized messaging

One of the clearest advantages of marketing analytics is awarding brands the ability to market to the right people, in the right way.

Marketing departments can use it to segment their audiences to leverage copy, imagery, and communication channels that are more likely to resonate with specific groups. Customer-supplied demographic data might detail buyers’:

• Age
• Location
• Gender
• Cultural tastes
• Lifestyle habits

With 56% of consumers expecting offers to always be personalized, this data plays an enormous role in customer satisfaction.⁴

While tailored messaging is possible without robust marketing analytics, data analysis makes trial and error second nature. Businesses can easily compare one set of ads to another, dissecting engagement stats and click-through rates (CTRs) to see which messages hit the mark—and which seem to miss it entirely.

Digital analytics also inform the medium of a message. If a campaign performs well on one channel and poorly on another, the marketing data tells that story. With concrete data, there’s no need to have a lengthy discussion about reallocating funds from one marketing platform to another—the answer is already self-evident.

#2 Data leads to more insightful product development

Successful product marketing is only possible with a marketable product. Similar to understanding customer behavior, data insight can help you understand your audience and create a better customer experience. By leveraging marketing analytics that goes beyond sales figures, product development teams can design and redesign goods and services that consumers sincerely want.

To take the guesswork out of development, product teams can partner with marketing specialists to dive into data like:

• Customer feedback
• Sentiment analysis
• Overall market trends

With cold, hard analytics at their disposal, product teams can back up requests for additional resources with facts. As such, the entire process of getting buy-in for R&D from stakeholders becomes streamlined.

#3 Data helps improve customer support

The quality of a brand’s customer support is paramount to building a loyal following. Case in point: 26% of polled consumers said they would cut ties with a company after one negative customer service experience.⁵

Detailed marketing analytics lets brands identify pain points throughout the customer journey and nip them in the bud.

With so much of the customer experience now online, monitoring and quantifying the actions consumers take is easier than ever. Some of the digital marketing analytics businesses can use to better understand their customers’ journeys include:

• Heat maps – A heat map tracks the taps and clicks on a website, providing companies with a visual representation of what draws a consumer’s attention.
• Engagement metrics – Stats like bounce rate (the percentage of site visitors who leave without diving deeper into a website) and average session time (the length of time users spend on an app or website) can point to bugs or sub-optimal experiences.

By leveraging analytics to address the root causes of customer issues, brands can design better online experiences—and possibly even win lost customers back.

#4 Data allows for quantifiable competitor analysis

Marketing data analytics doesn’t just allow brands to compare their current position to their past business and marketing performance. It also facilitates comparisons to competitors.

Why? Feelings and qualitative tidbits are challenging to juxtapose. Numbers are not.

Between accessing public third-party customer data and studying marketing reports that competitors publish, businesses can create straightforward comparisons that paint a clear picture of their industry.

Through this quantitative style of competitor analysis, marketing teams and non-marketing departments alike can identify areas that need improvement—and pat themselves on the back when they come out on top in a category.

#5 Data provides context

Taking this notion of simplified comparison a step further, marketing data analytics allows for a much wider understanding of industry-wide and global trends.

Marketing data doesn’t exist in a vacuum, and it shouldn’t. When brands use only their current and historical data to make decisions, they miss out on:

• The global lingua franca of data – Today’s world runs on data. Practically every for-profit, nonprofit, and governmental organization is tracking customer, financial and operational information. There is so much data out there. And when businesses have a firm grasp on theirs, they can better understand the world of data around them—and make incredibly informed decisions.
• Understanding the bigger picture – Collecting and analyzing marketing data allows businesses to put their successes and setbacks into context. For instance, a 10% dip in sales is a problem—unless the entire industry or the economy as a whole fell by 10%. Only by understanding its own marketing analytics can a brand avoid jumping to conclusions or raising false alarms.

#6 Data makes marketing decisions quick and effortless

AI-powered business decision-making tools like IBM’s Watson don’t make guesses based on hunches—they analyze data.⁶ When brands embrace the science of marketing data analytics, they can become lightning-fast decision-makers, too—no robots required.

Essentially, organized data analytics transforms marketing decision-making from an “art project” to a “math equation.” There’s no right or wrong way to paint a watercolor—but there is a correct answer to a math problem. Data analytics makes that right answer more easily accessible.

This isn’t to say that emotion and expertise should never factor into marketing choices. Rather, marketing data analytics can act as a guardrail, keeping decisions within the realm of quantifiable facts so that the artful aspects of marketing can mesh perfectly with the data science side of it all. The result is less time spent on decision-making.

#7 Data gives brands a crystal ball

Okay, marketing data analytics doesn’t actually bestow brands with a supernatural ability to see the future. But because data creates patterns, marketing data analytics can help teams use information from past campaigns to inform future marketing activities.

In fact, as predictive analytics modeling in marketing becomes more intelligent, businesses may be able to know how their campaigns will perform before they even run them. This power can drastically change how brands approach their marketing, potentially saving millions of “trial and error” marketing dollars.

But none of this is possible without marketing analytics.

Supercharge your analytics with Power Digital

These days, collecting marketing data isn’t all that challenging. Every platform and marketing tool has a built-in dashboard, an in-depth strategy guide, and a pro-tier feature that gives you more information than you could ever decipher. If you peek at your Google Analytics, you can easily see way more data than you’d like in this marketing analytics tool.

But making sense of all that data—and putting it to work—is an entirely different story. Properly analyzing millions of data points and making them actionable takes a dedicated and seasoned team of digital marketing experts.

Power Digital is the only digital marketing agency with the knowledge and enhanced data platform to turn your marketing data analytics into actionable steps. We use our home-grown marketing analysis platform nova to help our brand partners identify opportunities for distinction and growth.

If you want a marketing strategy that’s powered by data and supported by humans, find out more by reaching out to Power Digital today.

 

Sources:

1. Deloitte. The CMO Survey: Marketing in a Post-Covid Era. Highlights and Insights Report, September 2022. https://cmosurvey.org/wp-content/uploads/2022/09/The_CMO_Survey-Highlights_and_Insights_Report-September_2022.pdf
2. Deloitte. The CMO Survey: Marketing in a Post-Covid Era. Topline Report, September 2022. https://cmosurvey.org/wp-content/uploads/2022/09/The_CMO_Survey-Topline_Report-September_2022.pdf
3. Deloitte. Top trends from The CMO Survey. https://www2.deloitte.com/us/en/pages/chief-marketing-officer/articles/cmo-survey.html
4. Forbes. The New Role Of Marketing: Drive Business Growth By Reimagining Customer Engagement. https://www.forbes.com/sites/briansolis/2022/11/01/the-new-role-of-marketing-drive-business-growth-by-reimagining-customer-engagement/
5. Forbes. What Customers Want And Expect. https://www.forbes.com/sites/shephyken/2018/08/05/what-customers-want-and-expect/
6. IBM. Making Informed Decisions with AI. https://www.ibm.com/watson/whitepaper/informed-decisions-ai/