Analytics is one such field in Computer Science that always finds a way to evolve into different forms. There are diverse forms of Analytics today, with each playing a pivotal role across various projects being undertaken by an organization. One such form of Analytics that is crucial to Marketers, in particular, is Marketing Analytics. Marketers, in general, focus on how many leads they can acquire from numerous channels such as the organization’s website. This is a form of Web Analytics and with rapid technological advancements occurring in every nook and corner of the world, Web Analytics alone can not determine the performance of the Marketing campaigns. This paved the foundation for a new form of Analytics, Marketing Analytics.
So what is Marketing Analytics? Simply put, it is a form of Data Analytics that is designed to help Marketers manage and optimize their Marketing activities. The goal here is not only to improve the effectiveness of Marketing processes but also to allow Marketers to maximize their ROI (Return On Investment) by optimizing the processes that generate revenue for them.
This article focuses on discussing the importance of Marketing Analytics and its benefits to organizations. It will also discuss 4 key steps, companies can take to incorporate it into their Marketing processes. It will also talk about the important KPI (Key Performance Metrics) that can help track how well Marketing teams perform in their campaigns and the best practices companies can use to utilize Marketing Analytics. Finally, it will talk about a few limitations as well. Read along to find out more about this interesting form of Analytics.
Table of Contents
- What is Marketing Analytics
- The Importance of Marketing Analytics
- How Organizations use Marketing Analytics
- Important KPIs/Metrics to Measure Marketing Performance
- What is a Marketing Analytics Software Used For?
- Marketing Analytics Software- Features and Capabilities
- Skills That Marketing Analytics Managers Need
- How to Start the Marketing Analytics Process
- Best Practices for Marketing Analytics
- The Challenges of Analyzing Data
What is Marketing Analytics
Marketing Analytics is a form of Analytics that consists of processes that measure, manage, optimize and analyze Marketing performance. Its goal is to improve the effectiveness of the Marketing strategies of an organization and at the same time generate more profit for the organization by optimizing the ROI. The techniques used in Marketing Analytics help Marketers not only monitor websites to measure the performance of their campaigns but also help them measure their Marketing efforts and optimize them accordingly.
It consists of a combination of tools, on-site and off-site metrics, and both online and offline efforts to track the performance of the Marketing campaigns. The concept of Marketing Analytics is based on the way a campaign is executed and not on what the campaign talks about. It is the act of looking past random website results and focusing on measuring the efforts every team member puts in to improve that activity.
It helps organizations to re-prioritize their time and resources across Marketing activities. This way businesses can make better decisions and decide whether to invest in a resource or not and get a holistic view of their operations.
To learn more about Market Analysis in detail, click this link.
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The Importance of Marketing Analytics
Now that you have understood what Marketing Analytics is and the way it works, this section will help you understand the importance it plays for any organization. The role it plays is given in the following points:
- In today’s world, understanding customer and market trends are crucial. When companies leverage the power of Marketing Analytics, they get a bigger picture of the trends as each detail is monitored.
- It also helps depict which campaigns succeeded and which failed. It provides the reasons for the success or failure of the campaign as well.
- By monitoring the Marketing trends regularly, Marketing Analytics enhances the market study of the organization and provides clear reports to give a crystal view of the operations of all the campaigns. It also helps to understand the ROI.
- It can help to predict future trends as it monitors every transaction periodically.
These are the general reasons why Marketing Analytics plays an important role in any organization. According to LyfeMarketing, 93% of Finnish Business Directors, feel that Data-Driven Marketing strategies are crucial to the success of their companies.
How Organizations use Marketing Analytics
Now that you have understood the importance of Marketing Analytics, this section provides 4 key steps that businesses can use to incorporate it into their processes:
- Product Intelligence
- Product Development Trends
- Predict Future Results
- Customer Trends and Preferences
- Messaging and Media
- Customer Support
1) Product Intelligence
These activities focus on the current trends of the Marketing activities of the organization. It is important to focus on different sources of inputs, to measure performance, and, hence the Marketing team should have a wide-angle view of the processes and campaigns.
Companies should try to use more accurate metrics/KPIs such as Conversion, Comments, and Shares, and reports must be designed in such a manner that they can communicate to the whole team and not just one or two individuals. Most of the metrics are people-centred so that both current and future customers are well taken care of.
Competitive Analysis plays a major role in any Marketing team. Organizations must not compromise on this and must treat it as a constant metric in their analysis when leveraging Analytical techniques. In addition to the performance, the investments and efforts of competitors need to be studied. The Competitive Analysis adds an extra dimension in Performance Research and helps the team decide where and when to invest their time & resources and to strategize those decisions accordingly.
3) Product Development Trends
A Long-Term Analysis of Marketing goals helps a team get ready and prepares them for any possible situation. Organizations must measure their gains and losses in a Long-Term fashion to combat any type of risks that can arise. This will enable them to make holistic decisions on where they need to invest their energy.
4) Predict Future Results
Marketing Analytics helps predict where to spend time and resources because it values efforts and investments over a temporary period of success of a particular Marketing Channel. By treating all channels equally, the Marketing team will be able to decide when and where to use each channel. This helps to prioritize the next quarter’s investments more accurately.
5) Customer Trends and Preferences
Analytics can help provide detailed insight into your customers. This includes useful insights like which products are they buying, which products are being widely researched, which ads are leading to conversions, and which ones are being ignored to name a few.
6) Messaging and Media
Data Analysis can play a pivotal role in helping marketers decide which messages to display for specific customers. This has gained precedence with the increase in the number of channels. Apart from the traditional marketing channels such as television, broadcast, and print, marketers should also know which social media networks and digital channels are being consumed by customers. Analytics helps you decide which media is garnering the most sales, what message is resonating with your audience to name a few.
7) Customer Support
Analytics can also play a role in discovering areas in the buyer’s journey that could be improved or simplified. Important aspects like where are your clients struggling, and intuitive ways to simplify the product or check-out process can help you improve your funnel to increase efficiency and increase your Lead Conversion Rate.
Important KPIs/Metrics to Measure Marketing Performance
This section focuses on providing important KPI metrics that measure Marketing Performance so that companies can constantly keep track of their performance. The important KPI metrics are given below:
- Sales Revenue
- CPC (Cost Per Click)
- Online Marketing ROI
- Form Conversion Rates
- Social Media Reach
- Cost of Customer Acquisition (COCA)
- Website Traffic
- Customer Lifetime Value (LTV)
- Click-Through Rate (CTR)
- Marketing Revenue Attribution
- Cost Per Lead (CPL)
1) Sales Revenue
Sales Revenue is defined as the income that a company generates through its product/services. It is one of the most important KPIs because companies must monitor it regularly to ensure that their sales are exceeding the expenses they incur through their Marketing campaigns.
2) CPC (Cost Per Click)
Whenever a potential customer decides to show interest in a product/service offered by a company, that customer becomes a “lead”. CPC is the relationship between the amount of cost incurred by the organization to convert a customer into a lead. Mathematically, CPC is calculated by dividing the total amount of money spent by the organization to run a Marketing campaign by the total number of times a click occurred.
3) Online Marketing ROI
Online Marketing ROI depends on the relationship between Reporting and Analytics. It is the measure of the profit or loss that a company generates depending on its Marketing campaigns, concerning the money the business invested in those campaigns. It helps Marketers understand whether their investments are worth from the Marketing campaigns. The ability to analyze website traffic and convert it to valuable reports is an important KPI for determining the success of the company.
4) Form Conversion Rates
Form Conversion Rates are the rates at which the content produced by the Marketing team in a company drives traffic to the website of that company. This is also known as Content Marketing. Content Marketing is something that always requires to be optimized regularly. Once companies get a hang of the trends in the conversion rates, they can make effective decisions.
5) Social Media Reach
Social Media Reach is the KPI that measures the number of leads a company can get through its social media pages. If the Marketing team knows how each social media network functions, they can analyze which platform works for their business. This way they can improve Social Media Marketing techniques.
6) Cost of Customer Acquisition (COCA)
The Cost of Customer Acquisition is the cost involved in convincing a customer to buy the product or service of the organization. Mathematically, COCA is calculated by dividing the total Marketing investment by the number of customers acquired.
COCA is an important KPI as once the COCA is determined, the Marketing team can set their goals according to the number of customers they want to acquire and allocate the budget accordingly.
7) Website Traffic
Website Traffic represents the number of people that visit the organization’s website. These customers can turn out to be potential leads. Getting to know these customers is what makes up Website Traffic. It can help you understand what customers are searching for and what products/services they are interested in.
Whenever a potential customer is interested in the product or service an organization provides, he becomes a lead. Having more Leads increases your chances of acquiring more sales, thereby generating more revenue. In general, there are 2 types of leads:
- Marketing Qualified Lead (MQL): An MQL is a lead that is more likely to become a customer as compared to the other leads. They have decided that they are deeply engaged with the organization’s product/service but have not yet become fully-fledged customers.
- Sales Qualified Lead (SQL): An SQL is a lead that the Sales team has accepted to have a direct sales follow-up. SQL’s have been determined to have a high probability of becoming customers.
9) Customer Lifetime Value (LTV)
Customer Lifetime Value (LTV) represents the cost that each customer has to the organization. It helps to understand how much your customers are worth to you. It is an important KPI because it helps to determine the company’s ROI, and plan the companies future goals. LTV is determined by multiplying revenue that the company makes, the gross margin, and the average of any repeated purchases the customer makes.
10) Click-Through Rate (CTR)
Click-Through Rate is a KPI that measures the number of clicks advertisers receive on their advertisements. A high CTR is important because it directly affects the Quality Score and also reduces the cost incurred by you when someone clicks your advertisement.
11) Marketing Revenue Attribution
Marketing Revenue Attribution is the process of matching the revenue generated by customers onto a specific Marketing output. It helps improve the ROI, optimize the work and add all the relevant data to the correct destinations.
12) Cost Per Lead (CPL)
Cost Per Lead (CPL) is a Marketing pricing model where advertisers pay a fixed price for every lead they get. CPL is commonly used in the E-Commerce industry by companies that sell high-value products. CPL can be calculated by dividing the total money spent on advertisements by the number of times a lead was generated.
Overall, by following these KPIs, organizations can convert the customers into leads and that will ultimately boost sales and performance of their product.
What is a Marketing Analytics Software Used For?
With the help of Marketing Analytics Software, you can quickly organize, collect, and correlate valuable data quickly. This allows marketers to make real-time campaign optimizations.
Modern Marketing Analytics platforms are known for the speed at which they can process and store massive amounts of data. A primary drawback of having access to such a huge volume of data is that marketers cannot possibly parse through it all fast enough to make real-time optimizations.
This is where modern analytics platforms come into play, allowing marketers to adjust ad or creative placement as needed before the campaign ends. This helps enhance potential ROI (Return on Investment).
Marketing Analytics Software- Features and Capabilities
Here are a few key capabilities and features you should keep in mind while implementing a Marketing Analytics solution:
- Brand Measurement Capabilities
- Contextualized Market and Customer Insights
- Real-time Insights and Analytics
- Granular, Person-level Data
- Annual Media Plan Recommendations
- The Ability to Correlate Offline and Online Attribution Metrics
Skills That Marketing Analytics Managers Need
Here are a few skills that are desirable in a Marketing Analytics Manager to help you conduct quality analysis:
- Make Optimization Recommendations: Once you obtain the Data Insights, the ability to come up with recommendations to improve underperforming campaigns based on trends is critical. For instance, data may show that one consumer engaged with branded content only in the morning, informing a strategic shift to serve the ad on the consumer’s morning commute, rather than on the way home.
- Conduct Quality Analyses: It is crucial for an Analytics Manager to have sufficient experience in evaluating large data sets to uncover insights including engagement trends and buying patterns within the target audience.
- Work With Analytics Tools: Analytics Managers should be comfortable with various analytics and automation platforms, because of the pivotal role these tools play in reducing the time from consumer engagement to consumer insight.
- Understand MarTech and Consumer Trends: Analytics Managers should always stay on top of MarTech and Consumer trends. Understanding how buyers are engaging with virtual and augmented reality and consumer demands for a seamless omnichannel experience can go a long way in understanding the next steps for optimization.
- Collaborate with Stakeholders: Members of the Analytics team should be able to use the data they work with to weave a compelling story for their stakeholders, and demonstrate the ways other departments, such as product development or sales, can use these findings to drive conversions and engagement.
How to Start the Marketing Analytics Process
Here are the steps you can follow to get started on the Marketing Analysis process:
- Understand What You Wish to Measure: There are various aspects of a Marketing Campaign that can be measured: leads captured, conversion rates, and brand recognition are a few examples. You need to understand the problem you are trying to solve or insight you are trying to extract when you are beginning to analyze your data.
- Set a Benchmark: Understanding what a successful campaign looks like, will help determine the metrics and type of data that will be collected by marketers. For instance, if your goal is to increase brand awareness, the success benchmark might be an increased percentage of brand loyalty depicted in a customer panel, instead of an online impression or click.
- Access Your Current Capabilities: You need to get an idea about where your company stands right now. Understanding the weak points of your company can help you strengthen your program and boost efficiency.
- Use a Marketing Analytics Tool: Marketing Analytics tools will increase in significance as consumers continue to grow more selective and datasets continue to grow. An advanced platform typically helps identify the messages that resonate with your target audience and the types of media that will convert. This provides a comprehensive view of which campaigns are successful and which ones are underperforming in real-time.
Best Practices for Marketing Analytics
Organizations can use Marketing Analytics and its techniques to monitor their campaigns and optimize their processes to make those campaigns effective. In this section, we will explain 6 best practices that organizations can use to utilize Analytics and boost their performance:
- Create Separate Dashboards: Suppose an organization is running multiple ad campaigns simultaneously, it will make Marketers confused if they have all their entries on a single dashboard. Marketing Analytics helps avoid such confusion by allowing the Marketing team to create separate dashboards for each campaign and pull the main points from each campaign into an overarching Marketing dashboard to allow them to better organize their data.
- Compare YOY (Year Over Year), not only MOM (Month Over Month): When dealing with Analytics, only following a MOM scheme is not preferred because many businesses go through different changes every month, so the analysis can have errors. It is always advisable to also have a YOY Marketing Analysis along with MOM Marketing Analysis. It will give a much clearer picture of the performance.
- Plan A Segmented Approach: Organizations need to have an individual and personalized approach whenever designing any Marketing campaign. Analytics helps segment different strategies and deliver content to the right people at the right time. By segmenting ideas and decisions, Marketers will have a better idea of which campaigns are performing better and also decide when to invest in what campaign.
- Constant Monitoring: Analytics need to be monitored regularly to spot trends, errors, and optimization points along the way. Only if you monitor the Analytics constantly, you can utilize the opportunities when they come and improve performance, and adjust budgets.
- Patience is Key: When designing any Marketing Campaign, the Marketing team needs to give it time to improve. Many businesses stop analyzing a campaign when it does not perform and shut it down. Give the campaigns time, and once they stabilize over a period, Marketing Analytics can optimize them efficiently and accurately.
- Plan all Activities according to the KPIs: All the campaigns must be designed and planned to keep all the KPIs in mind. Each campaign likely has a different KPI that it is focused on, but many businesses lose sight of the KPIs as the campaign progresses. Not every campaign results in success and the KPIs decide which campaigns are successful and which aren’t. Hence, it helps to monitor the KPIs regularly to identify areas of opportunities and ensures that the campaign proceeds in a smooth manner.
The Challenges of Analyzing Data
This section highlights some of the limitations Marketing Analytics can have on an organization. In some cases, it can misinterpret data which can lead to misinformed decisions. Some of the limitations are given below:
- Misidentifying Marketing Needs: Sometimes, Analytics can overestimate or underestimate how well your competition is doing in the market. It can also misidentify the needs of the organization.
- Evaluating Marketing Growth without a Market Share: Market Analysis gives an idea of the range of opportunities you can have. Sometimes, this analysis will not please you and you can lose your opportunity. Hence, a proper Market Share is also needed with the analysis to compete in the market.
- Improper Interpretation of Data: It helps to analyze data by collecting data from multiple sources, but interpreting the data is a whole different process. You need to spend some time interpreting the data as well because you will be at an extreme disadvantage if you misinterpret the data and make decisions based on it.
This article provided a comprehensive analysis of Marketing Analytics and its importance to various businesses. It gave 4 key steps that companies can use to incorporate Analytics into their Marketing processes and gave the popular KPIs which companies can use to improve their Marketing Performance. It also talked about the best practices companies can use to utilize Analytics to boost their performance and also highlighted a few limitations of it. Overall, Marketing Analytics gives a 360-degree view of a business that governs all the business operations. It optimizes and prioritizes time and resources so that an organization can make effective decisions to boost its performance.Visit our Website to Explore Hevo
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