- What Is Marketing Analytics?
- Why Is Marketing Analytics Important?
- The Benefits of a Successful Marketing Analytics Program
- Who Should Use Marketing Analytics?
- Common Marketing Analytics Terms
- Key Marketing Analytics Methods
- Tips for Using Marketing Analytics
Marketing analytics can help you improve your business’s brand, increasing profitability and total revenue. The right analytics can help you uncover new markets, new audiences, the best areas for future development, and more. Here’s some more information about marketing analytics, why it’s important, some of the most common terms, and key marketing analytics methods and tips.
What Is Marketing Analytics?
Marketing analytics, also called marketing data analytics, involves measuring and analyzing data to determine the impacts of marketing. This information lets people make changes when needed to maximize the effectiveness of campaigns, increase their return on investment (ROI), and prevent unnecessary spending. Marketing analytics can help you learn about new trends, customer behavior, and more. It gives sales teams essential data, helping them understand which campaigns are driving results and which ones aren’t successful. It also consolidates data from many different marketing channels to provide a comprehensive picture that can provide invaluable marketing assistance.
The scope of marketing analytics includes forms of marketing like billboards, television ads, and sponsorships for special events along with online advertising. The advent of search engines, search engine optimization, paid search marketing, and powerful new software has made marketing analytics easier to implement and more powerful than ever.
Image via Flickr by learn_tek
Why Is Marketing Analytics Important?
According to a survey from Gartner Research, 81% of marketers expect most of their decisions to be data-driven. Taking advantage of marketing analytics is increasingly important for marketers and executives to get ahead and stay competitive in today’s business landscape.
Marketing analytics lets you spend every dollar of your company’s marketing budget as effectively as possible. This helps your business compete with others in your industry. Marketing analytics also helps you back up every marketing decision with hard data instead of relying on hunches or small numbers of reviews from customers.
If company executives or board members have trouble making a decision, they can consult detailed information to predict the best marketing strategy. Using marketing analytics to track and report on diagnostic metrics, business performance data, and leading indicator metrics gives businesses answers to the questions that are most important to shareholders.
For example, a company that makes protein shakes could use marketing analytics to discover that many people buy their shakes as meal replacements when they’re too busy for lunch or dinner. This could prompt the marketing department to focus more on the convenience and appealing flavors of the shakes than their protein and vitamin content, increasing sales.
The Benefits of a Successful Marketing Analytics Program
With proper marketing analytics, you can understand marketing trends better, monitor those trends over time, and determine which marketing programs and campaigns work best and why. You can also get more information about the ROI of each project and forecast future results more accurately.
Marketing analytics makes analyzing data more efficient, letting people see the big picture. Instead of making decisions based on information from individual channels like digital marketing metrics, social media data, or web analytics, marketing analytics lets businesses consider all marketing efforts and their success levels over time.
It provides more information about what the target audience wants, and it lets you compare your marketing activities to those of your competitors. You can get detailed information about where they’re spending their time and money, the types of customers they appeal to most, and whether they’re using any channels or marketing methods that your organization hasn’t considered.
According to Adobe’s Marketo, marketers who use marketing analytics achieve 5% better returns on their investments and more than 7% higher levels of growth. An integrated marketing analytics approach can reduce your company’s marketing spending by 15 to 20%. Providing one platform for reporting across all marketing channels can simplify the entire process even more.
Who Should Use Marketing Analytics?
Whether your business is a growing start-up, mid-sized, or a leader in the industry, marketing analytics can provide useful data that can help you improve and grow your organization. Even if you’re not part of your company’s marketing department, you may benefit from the information that marketing analytics provides. Here are some common roles for people who should use marketing analytics and pay close attention to the results:
- Chief Marketing Officer (CMO): Chief marketing officers oversee the performances of marketing teams. Tracking data from marketing analytics helps them understand the impact that the marketing team has on the company’s bottom line.
- Marketing Director: Marketing directors are often involved in making decisions about day-to-day marketing tactics. They should track data that helps them determine how campaigns are performing and decide whether the marketing budget is being spent wisely.
- Head of Analytics: The head of analytics supervises data collection for a large organization. People in this position should be familiar with data from marketing analytics and what it means.
- Chief Revenue Officer (CRO): Marketing analytics can help CROs determine how much new business and revenue and how many sales are direct results of the company’s lead generation programs.
- Marketing Analyst: Marketing analysts are in charge of analyzing and interpreting marketing data. Being familiar with marketing analytics is an essential part of the job.
- Head of Business Intelligence: The head of business intelligence uses analytics from every department, including the marketing department, to make decisions for the entire company that are based on reliable data.
Common Marketing Analytics Terms
You’ll need to know what many words and phrases mean to set up a successful marketing analytics program for your company, understand how marketers talk about and analyze information, and interpret the data you receive correctly. Here are some of the most common terms used in marketing analytics:
Key Performance Indicators (KPIs)
Key performance indicators are the metrics that marketers look at using marketing analytics. They include many of the terms below.
The funnel is the steps a user takes from the time that they first interact with your brand to the time they become a customer. Marketers often use funnel analytics to find ways to improve the customer conversion process. For example, an online retailer who notices that some potential customers leave the site before checkout is complete could increase sales by streamlining the online purchase process.
A conversion rate is the number of people who take an action divided by the number of people who visited your website. The most common conversion rate looks at the number of website visitors who become customers. Conversions could also be people who sign up for a free trial, download a white paper, click on an ad, or subscribe to an email newsletter.
The visit-to-contact conversion rate is the number of people who contact a business compared to the number of website visits for a selected time period, and the contact-to-customer conversion rate is the percentage of people who become customers after contacting the company.
Touchpoints are interactions that people have with a company. They include viewing pages on a website, calling customer service, subscribing to an email list, following the organization on Facebook or Twitter, and more. You can use marketing analytics to track which touchpoints are most effective at creating conversions.
With attribution models and reporting, you can see how a set of user actions are linked to a desired result. For example, if you want to learn whether a blog post persuades people to follow the company on Facebook, you can use Google Analytics to get a detailed attribution report and see how those actions are related.
Cost per Acquisition or Click
The cost per acquisition is the amount of money you spend to acquire each customer. The cost per click is the amount needed for each click that leads to a company’s website.
Behavioral targeting monitors the behavior of a user to provide more personalized, relevant messaging. With the right data, marketers can use behavioral targeting to engage potential customers with customized messaging. This information could include purchase history, in-app activity browsing activity, and more.
This is the percentage of people who visit one page on a company’s website and then leave without clicking on anything else. Reducing the bounce rate and keeping visitors engaged longer can increase conversions.
Percent Exit Rate
The exit rate is the percentage of users who left a website from a particular page. For example, if lots of people are leaving after trying to look at a company’s online store, it could be slow to load or difficult to navigate. In contrast, a high exit rate on the order confirmation page would mean that many individuals have decided to make purchases.
A company’s churn is the number of subscribers or customers that leave over a set amount of time. For example, if a customer subscribes to a monthly service and then leaves before the first year, they would increase the churn rate.
When someone enters their information in a form on your website, they become a contact.
Personally Identifiable Information (PII)
PII refers to any user data that could distinguish one person from another. This includes phone numbers, social security numbers, email addresses, mailing addresses, and names.
In marketing analytics, a cookie is a small file that’s stored through the browser when a user visits a website. Cookies, also called tracking cookies, let marketers track the behavior of site visitors and map the path that visitors take after landing on their website.
Retargeting is an advertising technique that works by tracking users who visit your site with cookies and then displaying ads to those users as they browse other websites. This encourages people to take another look at a site and reconsider making a purchase.
When someone visits a website by typing in the address instead of clicking on a link, it’s direct traffic. Using a saved bookmark is considered direct traffic as well.
The engagement rate measures how long a person stays on your website and the number of pages they view. You can also consider whether or not the person shares a social media post or subscribes to an email newsletter.
Lead Scoring assigns every lead a score based on their engagement rate, their perceived fit for a company, and where they are in the marketing funnel. A lead in your company’s target demographic would score higher than someone with a similar engagement rate from a different group. Every lead gets a score based on the person’s readiness to purchase. Predictions about future buying habits can help inform your decisions about marketing or selling to the lead.
An entrance is when one person visits a site. If the same person visits three times and closes the website between visits, they would have three entrances. If someone visits the homepage once and then comes back by clicking on a link to a blog post, those two visits would count as one entrance on the homepage and one on the blog post.
Organic search visitors find a website through a search engine like Google, Bing, or Yahoo.
Paid search visitors click on a paid ad or social media post to get to a website.
Queries include searches that a site appears in even when it doesn’t receive any clicks. If people are skimming past your blog posts, you could need more interesting titles. If your site appears in searches for unrelated topics, you could need to change its phrasing or keyword use. To get ideas for future pages, check the list of queries for related words and consider using them in future content or meta descriptions.
Referrals and Referrers
A referral is a visitor who comes to your site from another website, and a referrer is any page that sends a visitor your way. Referrers can include social media posts, Quora questions, images embedded with links, posts on other blogs, and more. People sometimes call links from referrers backlinks.
A source is any offline or online channel that generates traffic or leads. Sources can include social media, search engines, blog posts, TV ads, billboards, offline direct mail campaigns, and more.
Segments are groups of people within your audience. You can use marketing analytics to compare the behaviors of these groups and gain additional insights into your data. This is also called segmentation or list segmentation. For example, you can create a segment of users who visit your website at least once per month to see what those people have in common. If most of them live in one area or are part of one demographic, increasing advertising in that area could help increase sales more than spending the same amount over a wider area or demographic.
In marketing analytics, a revenue report lets readers know how much of a company’s revenue came from different marketing activities. For example, you can run a revenue report to find out how much revenue your social media marketing efforts have generated over the past year.
The number of impressions is the number of times that people have viewed a social media post. For example, a post on Twitter would get 200 impressions if 200 Twitter users look at it.
People often compare the impressions to the exposure level, the number of times your post could appear in users’ feeds. Most people don’t look at every post on their feeds, so the exposure level is usually higher than the number of impressions.
Time on Page or on Site
In Google Analytics, time on page is the amount of time someone spends looking at one webpage. Time on site is the amount of time they spend browsing the website as a whole. Many marketers use these metrics to get an idea of the effectiveness of a page or an entire website. Sites and pages that encourage people to spend more time with them can increase your conversion rate and get more people to make purchases.
URL stands for uniform resource locator. It’s an abbreviation for a web address, and the term comes from the early days of computing. A tracking URL is a regular URL with a token, also called a tracking pixel or a UTM (urchin tracking module) parameter, UTM code, or UTM tag, attached to the end of it. The UTM tag helps track where the view originated, and it usually comes after a question mark in the URL. The text after the question mark is part of the token, and it changes based on the source of the page view.
With a UTM tag, you can include the source of a page view, like an ad on Twitter, the content that the person was viewing at the time, and the keyword associated with that marketing campaign. That way, you can tell which marketing campaigns are most successful from the sources of views. You can use Google’s Tag Manager to add UTM tags to a website and share what you learn easily with Google Analytics.
Event tracking is monitoring the interactions that visitors have with the content on a site. These events could include downloading an eBook, clicking on an image, watching a video, subscribing to an email list, and more.
Data aggregation is gathering all of a company’s data into a single source. Some people do this manually with spreadsheets, and others use software that takes care of it automatically.
Customer Lifetime Value (CLV)
Identifying the customers with the highest lifetime values, those who are likely to spend most, helps you focus on them and make your business’s marketing spending more efficient.
Customer Acquisition Cost (CAC)
CAC is the average amount of money needed to acquire each new customer. It’s the total sales and marketing cost divided by the number of new customers within a specified time period. You can find a company’s online CAC or a combination of online and offline CACs.
Marketing Percentage of CAC
Marketing percentage of CAC is the total marketing cost divided by the sales and marketing costs.
The Ratio of CLV to CAC
This helps you compare the customer lifetime value (CLV) to the customer acquisition cost (CAC).
Time to Earn Back CAC
This metric lets you know how long it will take to earn back the money you used to acquire each customer. It helps you set realistic revenue goals and future marketing budgets.
Marketing Originated Customer Percentage
This metric measures how much of your new business comes from your marketing leads. Divide the total number of leads in a month divided by the total number of new customers to get the marketing originated customer percentage.
Marketing Influenced Customer Percentage
This measures the role that your marketing efforts had in the acquisition of new customers. It’s the number of customers who engaged with your marketing activities divided by the total number of new customers.
The marketing dashboard is the place where you record your aggregated data.
Visualizing marketing data means presenting it in a chart or graph. You can visualize data automatically or manually. Visualization can help you spot trends and relationships between data points and show those results to company executives or owners.
Key Marketing Analytics Methods
Many different marketing analytics methods are available:
Unmet Need Analytics
Unmet need analytics uncovers any unmet needs around your product or service or within your market. Then, you can use this information to increase revenue and customer satisfaction. Useful tools for unmet need analytics include qualitative surveys, product reviews, focus groups, and interviews with individuals. It’s easy to ask customers what they want by starting an online focus group or inviting people to comment on your business’s Facebook page.
For example, if lots of people say that the lines at one store location are too long, the manager could benefit from one or two more associates working during the busiest hours. You can also use tools like Google Trends to find out what customers are searching for.
Market Size Analytics
Understanding the size and growth potential of your target market is essential for deciding whether a business proposition is viable. Without enough potential customers, a business’s sales will never be high enough to make a profit. People measure market size in terms of volume or the number of units sold, value or the money customers spend, or frequency, how often a service or product is sold.
Marketers often consider trade association data, government data, financial information from competitors, and customer surveys to determine market size. Remember that large markets may already have several products designed for them that are similar to yours. You should consider the number of competitors as well as the market size.
Understanding customer demand is essential for businesses to remain competitive. Demand forecasting is a type of predictive analytics. It uses data mining, statistical modeling, artificial intelligence, and machine learning to estimate the amount of a product or service that customers are likely to purchase. Demand forecasting uses historical sales data and information from current test markets.
You can use time series analysis to see how sales change over time. For example, sales could increase near the end of every month because people get their paychecks around that time. This would make the end of the month a good time for promotions or sales.
Market Trend Analytics
Knowing where the market is heading is important for every business, no matter what the industry is. Market trend analytics can let you know whether a market is growing, stagnant, or in decline and how fast changes are happening. To monitor market trends, you can analyze scenarios to see how a growing, stagnating, or shrinking market might impact your business. You’ll need to keep track of changes to local legislation, events, and fashions and check market trends regularly.
Businesses need to understand their customers so that they can find more people like them. Non-customers are important as well. Understanding what people who aren’t current customers think of your product, services, or brand can help you expand your business’s market to include those people. You can use surveys, focus, groups, and comments on social media to find out why people are choosing competitors instead of your business, fix the problem, and expand the company’s market.
Competitor analytics can help you learn more about a company’s competitors. You can find out who they are, how they’re positioned in the market, and how they compare to your business. Understanding their strengths and weaknesses can help you decide which opportunities to exploit and which threats to be aware of. Marketers can gather competitor data from business journals, newspapers, product brochures, annual or quarterly reports, and marketing activity. You could even get an employee, family member, or friend to visit a competitor, buy one of their products or services, and assess the experience.
With pricing analytics, you can find out exactly how much customers are willing to pay for a product before you start selling it. You can also see what will likely happen with each price change. Pricing analytics involves analyzing price sensitivity in different market segments. It’s especially useful in competitive markets where you’ve already tried other techniques. It requires data mining and the creation of forecasting models and algorithms. If you use pricing analytics to increase a company’s revenue, you should improve the value the business offers to people who are paying a bit more.
Sales Channel Analytics
There are many possible channels where businesses can market and sell their products and services. Sales channel analytics lets you assess the channels available and focus your marketing efforts on the ones that should be most effective. After you start a marketing campaign, you can assess its conversion rate, the number of viewers who become customers.
Brand analytics compares the strength of a brand to its competitors. Your brand is more than just a logo. It’s the feel and look of your products and locations and what they represent to customers. Understanding how customers perceive your brand can help you make better marketing decisions. You can get information from review sites, social media, conversations with customers, focus groups, and surveys.
Different models attribute purchases to different pages or marketing efforts. In Google Analytics, a position-based attribution model gives 40% of the credit to the first and last interaction and 20% of the credit to the interactions in the middle. Single attribution, also called first touch/last touch attribution, is one of the most popular marketing analytics strategies. It allocates all value to the first or the last interaction with a customer before they buy. First-touch attribution gives the lead generation strategy credit for a sale, even if it happens months after a person first visits a business’s website.
Combining revenue cycle projections with single attribution strategies can give you a better idea of the average amount of time between the first touchpoint with a potential customer and the first purchase. This lets you know which products have longer buying cycles than others. You can use data from previous campaigns to predict the strategies that will be most successful. Attribution across multiple programs and people tries to determine the value of each unique touchpoint by starting with the action that led to a sale and working backward.
Full marketing mix modeling (MMM) uses complex statistical techniques to determine how marketing touchpoints and non-marketing variables work together to impact sales volume. These models require lots of data, so not many businesses are taking advantage of them yet.
Test and Control Groups
Test and control groups, also called A/B tests, let you decide which marketing campaigns work best in real life. For example, you can compare two similar regions while running a new marketing campaign in one and keeping the company’s current campaign going in the other area. Then, you can compare results from the two campaigns and help executives decide which one the business should use and whether any changes are needed.
To use test and control groups, choose a marketing channel like Twitter or Facebook. Then, form a hypothesis and decide which KPIs you want to track to test it. Control factors other than the variable you want to test as much as possible and make the control and test groups as much alike as you can. Also, remember that some percentage of people visit pages before making purchases because of coincidences, not because of a company’s marketing efforts. If sample sizes are too small or the time period of the testing is too short, the results may not be accurate.
Reach, Cost, Quality (RCQ)
RCQ separates each touchpoint into its component parts: the number of target customers reached, the cost per unique touchpoint, and the quality of the engagement. People often use it when MMM isn’t feasible because of limited data. RCQ lets you compare many types of touchpoints. However, it can’t account for differences in social media networks and other factors.
Predictive Lead Scoring
Traditional lead scoring involves identifying the characteristics of a qualified lead manually, and predictive lead scoring uses algorithms to analyze historical data and decide which leads are most likely to result in conversions. Then you can focus your marketing efforts where they’re likely to create more profits.
Clustering helps marketers to segment prospects and customers in natural ways. Then, they can create different content, campaigns, and offers for each segment. You can take any number of characteristics into account, and clusters are formed based on the distances between the characteristics if you visualized them on a chart or graph. People with similar scores stay in the same cluster, and you can segment campaigns, products, ads, and other variables along with customers and prospective customers.
Tips for Using Marketing Analytics
Using marketing analytics can help make companies’ marketing and advertising campaigns more effective. It can also increase brand recognition and improve an organization’s reputation. Here are some tips to help you take advantage of the benefits of marketing analytics:
- Start with keyword research: Keywords can let you know exactly what your current and potential customers are thinking. You can use the keyword data from each click that leads to your website to decide which keywords will attract more readers.
- Use predictive analytics: With predictive analytics, you can identify the customers most likely to churn or leave. Then, you can set automated offers or incentives to go to those customers and encourage them to keep using your company. You can also alert salespeople or customer service representatives to contact those people. For example, you could send an email with a coupon to people who abandon their online carts before making a purchase. Before you use predictive analytics, you should use descriptive analytics to look at historical data. After making predictions with predictive analytics, use prescriptive analytics to decide on a course of action.
- Predict conversions: The conversion rates for most businesses are in single-digit percentages, making predicting who will become a customer difficult. To succeed, you‘ll need lots of historical data about user behavior. Then, you can use that information to identify the early characteristics and behaviors associated with a future conversion.
- Target content: Targeted content distribution lets you create different content for different segments of potential customers. You can group one or more similar segments into target personas that describe them and help people create content that appeals to them. For example, people likely to buy a desktop computer include PC gamers, people with home offices, and students. While the most powerful computers appeal to gamers, others are more likely to prioritize value and convenience over power. Knowing which channel you can reach segments on best is important for targeted content distribution. For example, an ad on Steam would reach plenty of gamers.
- Send customized recommendations and suggestions: Choose a marketing platform with a recommendation engine that can suggest or target content to people automatically. That way, you can avoid spending on ads for a wide audience that might be largely unresponsive to your company’s product.
- Stay alert for anomalies: Anomaly detection uses machine learning and statistics to let marketers know when key metrics such as the conversion rate, traffic, and revenue change more than expected. After you detect an anomaly, you can find the cause and correct it or adjust your marketing strategy.
- Use a centralized marketing database: Without one place where you can compare it all, you won’t be able to completely interpret your data. A good marketing analytics platform should let you see a summary of marketing data and more specific details about the variables you search for.
- Use lookalike marketing: With lookalike marketing technology, you can find people in similar segments to the people who have already made purchases and then advertise to the people most likely to become customers.
- Determine customers’ upselling and cross-selling readiness: If you use marketing analytics to decide which customers are most likely to make another purchase, you can focus your marketing on those people.
Marketing analytics can help you get the information you need to understand your company’s audience and make good marketing decisions. You can use content promotion services from CopyPress to get more people to your business’s website, raise sales, and increase your ROI and brand recognition. You can schedule a free strategy call to discuss your organization’s goals. We have experience in a wide range of industries, and we can help you publish interesting content, grow your customer base, and make your company more successful.