How to Leverage Data Analytics to Solve Marketing Problems

Today’s marketers are made of steel. They have to deal with challenges that are constantly coming from all sides: changing markets, lower budgets, declined audiences, ios 15, martech tools... Marketers are typically so busy with their day-to-day struggles that they can’t even see the emerging issues. 

However, there's a knight in shining armor to help them combat these challenges, and it goes by the name analytics. It has become a game-changer for marketers worldwide, enhancing their problem-solving capabilities immensely. Let’s dive into how this works. 

In this article updated in 2023, we'll talk about how analytics can help marketing specialists get their heads out of the routine and gain complete control over their marketing performance.

Marketers waste 21% of their marketing budgets because of bad data. Whether you’re a marketing Swiss Army Knife in a small firm or if you are the third email copywriter in the marketing department of an international company, you have the same pain point every single day — data. Whatever task you’re doing, you need raw, pure input and output data. You want to know where information comes from and how it should be attributed.

All challenges related to data can be divided into three categories:

• Knowing where your data is coming from: Where does data flow in your business and how the marketer can use it to maximize revenue and decrease costs?
• Data control and ownership: What do your have to do to take full control of these internal and external data flows?
• Activating your data: How can you utilize the data to make decisions and what’s the budget for this?

First, you have to set up data collection and fight with sampling problems — because you can’t be confident in reports built on sampled data.

Next, you have to merge your data coming from different sources to avoid different metric values across reports, duplications, data loss, and expensive bills for the tools you choose for these tasks.

Finally, you have to store your data and process it carefully.

Every marketer knows how expensive any kind of data errors are and avoids those mistakes.

Setting up data analytics carefully can protect your company from pains, related to those issues mentioned above.

Moreover, answering these questions will help you determine what data you should pay the most attention to. You have to remember that if you have no or a limited budget to build up data processes and culture within your organization - it’s worth setting up basic data analytics procedures, even if you start with 100% free tools.

You can’t just hide behind digital analysts, but in most cases, it’s going to be your problem as the marketer, if the analyst would builds the wrong report. You have to always pay attention to data — even if you don’t like to — because the alternative is ad waste, getting less revenue, not meeting your goals and KPIs, and finally - losing your job.

Even if you’re not an expert in data science, you'd benefit a lot even from the basic metrics and reports, as Christopher Penn suggests.

Thus, problem #0 shows up — the need to constantly learn, grow, and expand your skill set. But seeing as it’s a better topic for Instagram coaching, we won’t dwell on it but will continue with the next problem that every marketer faces.

Why does every marketing department need key performance indicators (KPIs)? 

The main reason is that any marketer is an investment in a company's business results. Every company wants to be profitable and keep expenses far below the revenue. Measuring the right KPIs is the way to prove the value of the marketing department as an investment, and control your efficiency and growth. 

Have you ever found yourself in a scenario where Key Performance Indicators (KPIs) felt like a mere fantasy, detached from reality? All marketers run into this again and again.

The mission of your KPIs is to reflect the real situation. It's not a data snapshot or mathematical exercise.

It's a simple yet crucial point often ignored in casual discussion. If you find it challenging to justify your chosen KPIs, and why you need to measure certain metrics and not the other ones, let's step back to problem #1 and thoroughly reassess your marketing data.

To deal with the problem of key performance indicators, you definitely need to know the answers to these questions:

• What are our overall marketing goals and how are they connected with the business goals? This is the first stage of setting up your KPIs. It’s the place where you find out how marketing is connected with the financial KPIs and discover all the dependencies between sales and marketing activities.
• How are you going to meet the overall marketing goal considering each aspect of marketing? This is where you determine the KPIs of each channel such as PPC, organic, email marketing, social media marketing, referral, etc. You should establish a strong connection between your overall marketing goals and the personal KPIs of your team members. It’s the best place to make the KPIs connected, measurable, and realistic.
• Are your calculations for measuring those KPIs correct and suit your business model? Are they truly based on the data you have available? Two companies from the same industry could use different formulas for the same KPIs because they have different sets of data available. Sometimes, you can’t just take a popular KPI and start measuring without adapting it for your specific business case.

These are the main questions you should answer to create a perfect KPI system for your department.

Data Analytics is your copilot. 

After you define the goals of the marketing department and each marketer in specific, you'll be able to track the results of your day-to-day activities with a system of metrics and understand how they are connected with the KPIs you chose.

Here are some of the examples of the metrics:

• ROI (return on investment)
• traffic metrics
• the click-through rate of your emails
• checkout page conversions on your website
• calls initiated from Instagram.

Such a simple system of metrics provides a strong basis for measuring success or failure of everyday tasks, and these metrics can easily be understood and acted on by marketers. Meanwhile, the CMO and the heads of marketing domains can deal with high-level KPIs by controlling budgets and creating the marketing performance plan. That’s an order and structure that can’t be shaken by any changes.

After you've selected what metrics to measure, and which KPIs to track, the last step to marketing efficiency is accurate reporting. 

To control your KPIs and metrics, you have to use data analytics and set up reports to get insights on time to make smarter decisions, save money, and adjust your strategies. Marketers should set up reporting as a regular and long-term activity, as all marketers need their own specific reports to control the successes and failures, and fix the small problems before they become big.

Each of the reports you might need usually falls into one of two categories depending on the KPIs/metrics they include:

• Ad-hoc reports for measuring something specific within a specific metric;
• Automated reports for tracking your KPIs.

Also, all of the marketing reports can be divided into two categories depending on their main purpose:

• Reports for measuring results and keeping them under control;
• Reports for increasing marketing efficiency.

Let’s review some of the reports and see how they are connected with marketing metrics and KPIs.

This report should give you complete information on the marketing performance right now, and typically it’s in the form of a dashboard. If you are in the ecomerce nich, this dashboard typically includes KPIs like revenue, user behavior infromation as well as the number of sales by product or product category.

It should be close to real-time, update automatically, be simple and clear. A general performance report is not only for the CMO but for every marketer who cares if the team is reaching the goals.

Attribution modeling helps marketing specialists to understand how their advertising budget should be redistributed to maximize the revenue. Different models have different approaches to calculations, so it’s not easy to find the one that perfectly fits your business model. You should understand why modeling results differ a lot and how to apply it in your day-to-day activities.

This kind of report requires knowledge of attribution modeling and the ability to compare models. The main headache of budget distribution is mainly solved by attribution modeling, which might be based on custom models or standard attribution models. In any case, you have to build reports that would help you to compare the results of attribution modeling with your main KPIs such as revenue.

The AIDA report is marketing classics that would not ever lose it's frequency. Funnel stages — from Awareness to Action — with your own customer would provide you with lots of insights about the sales funnel, user behavior at different stages and how each channel helps you move your prospects down the funnel. Which steps of the conversion path are worth your attention, and which ones are doing great. You can find the bottlenecks in your customer journey with ease after building this report.

But first, let's chose the steps for your AIDA funnel.

These reports will give you a deeper understanding of who your customers are and what revenue you should expect to get during their llifetime with your brand. Ever dreamt of finding out your customers’ buying habits? They’re all in these reports. Use it to build your personalized strategies for your cohorts, depending on their LTV and activities.

With a ROPO report, you’ll find out how your online activities result in offline purchases. This is definitely one of the most useful reports for companies with online and offline points of sale (retail/ecommerce).

All of the abovementioned reports help marketing specialists understand the problems they have, solve them, and make immediate improvements.

Other reports for controlling results:

This report will help you see all technical issues and errors appearing on your website. With a website errors report, you can better control your developers and help them localize problems with code faster and more efficiently.

This report will help you estimate the revenue you’ve lost because goods weren’t available and the revenue you might get if goods become available. You can also use it to trigger a halt to advertising for any goods that are no longer available and save your budget from being wasted.

This report will show you which products aren’t selling well, indicating that it’s time to stimulate their popularity by pairing them with other goods or to stop offering them. It will also help you save money on promoting inefficient keywords.

These basic reports are necessary for the everyday work of marketing specialists. They show you how to estimate regions, landing pages, goods categories, new and returned visitors, and types of content from the position of efficiency. Only with these reports can you get control over your current marketing situation.

Marketers can leverage various types of analytics to solve problems.

One of the main uses of marketing analytics is giving marketers a deep understanding of customer behavior. These analytics tools can gather and analyze a wealth of data related to how customers interact with different marketing channels (i.e., social media, emails, PPC ads, etc.) 

• How many people viewed your ad?
• What did they do after viewing the ad?
• How many people viewed your ad?

Armed with this information, you can adjust your marketing strategies to optimize customer engagement. 

Time is a marketer's most precious resource. By using analytics, you can streamline marketing operations and save valuable time. For instance, analytics tools can automate tasks such as data collection, campaign tracking, and report generation. This gives you more breathing room to focus on strategy development and creative work. 

Imagine the power to predict the future! Predictive analytics technologies can analyse historical data and current trends to forecast likely scenarios. Anticipating customer behavior, potential marketing opportunities, and even possible threats becomes easier with these insights. This allows you to stay one step ahead at all times. 

With the proper use of analytics, you can transform your marketing efforts from feeling like a constant uphill battle to being a well-orchestrated ballet, where every step is calculated, and every move balances precision with creativity.

Descriptive Analytics involves analyzing historical data to gain insights into past performance. By examining data on customer behavior, sales trends, and marketing campaign results, marketers can identify patterns and trends that can inform their decision-making process. For example, they can use descriptive analytics to understand which marketing channels are most effective in driving conversions or to identify customer segments that are most likely to make a purchase.

Prescriptive analytics is a more advanced form of analytics that provides recommendations on the best course of action to achieve a desired outcome. By combining historical data, predictive models, and optimization algorithms, prescriptive analytics can help marketers make data-driven decisions. For instance, prescriptive analytics can recommend the optimal allocation of marketing budget across different channels or suggest personalized content recommendations for individual customers based on their preferences and behavior.

We hope your analytics help you each day you work in marketing. Make analytics your main advantage compared to your competitors. And if you have any questions considering your marketing problems and really want to solve them, let us know. All the reports you’ve seen in this article you can get based on your own data with OWOX BI.