How Marketing Analytics Helps Businesses Make Data-Driven Decisions and Grow
Lately, everyone has been talking about marketing analytics. But what is it exactly and why is it so important? In this article, we sort out everything you need to know about analytics in marketing.
Table of contents
- What is marketing analytics?
- Why marketing analytics is necessary
- Who needs marketing analytics?
- Why it’s important to combine data
What is marketing analytics?
According to Gartner, marketing analytics is the process of collecting, analyzing, modeling, and visualizing data to optimize marketing campaigns by better understanding users’ behavior across channels. Marketing analytics is also about measuring and optimizing marketing efforts. It helps you assess the impact of marketing on the business as a whole.
Why marketing analytics is necessary
Thanks to marketing analytics, you can avoid guesswork and pay special attention to unprofitable marketing campaigns, uncover patterns and valuable insights in your marketing strategy, adjust your advertising campaigns, and get more revenue.
The importance of marketing analytics is illustrated by recent researches by Gartner, Adage, and The Trade Desk:
- As marketing costs decrease, the share of those costs for analytics and marketing technology is growing.
- 37% of company executives who don’t meet the growth plan believe the CMO should be changed first of all. Therefore, it’s crucial for marketing directors to implement plans and achieve growth goals.
- 78% of marketing directors have raised ROMI by using marketing analytics to shape their strategy.
How to set up an analytics system and what tools to use depend on the goals you set for your company. But two rules apply to everyone: You should ensure the quality of your data and combine it in a single system.
Who needs marketing analytics?
Marketing analytics is necessary for all data-driven companies, and in particular for:
- startups and small online projects
- medium-sized online stores
- omnichannel retailers and marketplaces
Why it’s important to combine data
Marketing analytics starts with quality data. The KPIs in your reports and the management decisions you make based on them depend on the completeness and reliability of your collected data. Consequently, poor data quality is the primary reason for erroneous business decisions, which can lead to losses of time and money.
What are the most common challenges marketers face?
- In Google Analytics, 10% to 20% of conversions are lost, data is aggregated by the API, and data in reports is sampled.
- Combining data in Google Sheets or a standard database leads to regular system failures and subtle errors.
- Data in advertising services is collected in different formats and can change retrospectively, leading to discrepancies in reports.
- As a result of these challenges, businesses lose time and money.
Therefore, the first thing to do when building analytics is to automate data collection.
Find out the real value of campaigns
Automatically import cost data to Google Analytics from all your advertising services. Compare campaign costs, CPC, and ROAS in a single report.
Marketing is not an independent business function. Metrics only have value and meaning when combined with primary business data. If marketing indicators exist in isolation from business data — for example, in Google Analytics — their value is low.
Now let’s take a look at how marketing analytics helps businesses grow when faced with specific challenges.
Find and scale profitable ad campaigns
Typically, startups and small online projects want to scale profitable campaigns.
- There’s no separate budget for analytics.
- The marketing budget is constantly changing depending on the business results.
- Decisions are made intuitively due to a lack of data.
- Analytics implementation is postponed until “better times.”
- Study the best market practices: what tools to use, KPIs to calculate, and reports to build first.
- Keep track of benchmarks — conversions, traffic, cost per attracted client, and so on — and focus on surpassing them.
- Set up advanced ecommerce tracking in Google Analytics and automate reports in Google Sheets.
- Automatically import costs from advertising sources into Google Analytics. Compare the ROAS of all ad campaigns in one report to efficiently allocate your budget.
- Transfer sales information from your CRM to Google Analytics using the Measurement Protocol.
Example of implementation
To speed up the process of preparing reports for clients, the Webmart Group has automated reporting in Google Data Studio with the help of OWOX BI Pipeline. This service automatically imports expense data from various advertising services into Google Analytics, then transfers that data to Data Studio and updates reports without the involvement of data specialists.
Here’s what this data scheme and a prepared report look like:
This solution isn’t a full-fledged analytics system, but it’s enough for the initial stage. It allows you to get accurate data on advertising campaigns. However, this data is flat without considering the mutual influence of channels and your business’s funnel.
- Do you track events and goals in Google Analytics?
- Do you know how Google Analytics metrics relate to your business metrics? (Obviously, revenue and profit in the CRM will be different from online data.)
Achieve sales growth
Medium-sized online stores tend to prioritize sales growth.
- Marketing reports are collected manually in Google Sheets or Excel once a week or on demand.
- When the profitability threshold is already defined, it’s necessary to maintain the sales growth rate according to the specified CPA or ROAS indicators.
- There are not enough resources to implement analytics. For example, developers or specialists who work with reports don’t have time for analytical tasks.
- There is a popular belief that to increase sales, it’s enough to simply attract more traffic, set up Google Analytics, or work with an advertising agency.
To solve these problems, it’s no longer enough to simply transfer orders from your CRM to Google Analytics through the Measurement Protocol.
- Formulate and measure online and offline metrics. This will allow marketers to focus their goals and advertising budgets on the growth of the company as a whole.
- Collect raw data in Google BigQuery cloud storage to combine marketing and business metrics.
- Create a single marketing dashboard that’s available to all members of your team so they can find out at any time what’s happening with advertising campaigns and how the sales plan is being implemented.
A dashboard may not answer all questions, and insights can be generated based on more in-depth data. But at least at the top level, it’s desirable to create a single marketing dashboard.
Analysts segment orders by the number of sessions before making these orders (1, 2, 3, 4, and 5+). Long chains of interactions (5+ sessions) are handled similarly to short chains: the first two and the last two sessions are the most important.
During these first and last sessions, a user gets acquainted with the product and makes a purchase decision. The contribution of other sessions is lower, so the rest of the sessions are considered as one item. As a result, M. video marketers received a dashboard where orders are segmented by advertising source, region, product category, and number of sessions before registration.
This dashboard gives answers to the following questions:
- Which channels are more likely to be triggered at the beginning/middle/end of the funnel?
- Which channels are more likely to be triggered in a particular Region segment?
- Which Region segment has the largest number of orders?
- Do all marketing department employees know how the business evaluates their effectiveness and where they can see the results of their work? Company management shouldn’t require the marketing director to attract new customers or increase ROAS while advertising campaign specialists think their main goal is to increase conversions.
- Do you know where the data you need is stored and how to use it?
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Increase market share and attract new customers
Omnichannel retailers and marketplaces often face this challenge.
- Marketers who need to increase market share and attract new customers often work with several advertising agencies, and each agency is responsible for a specific advertising channel.
- The number of new customers is difficult to measure with Google Analytics: there’s no indication if a user has made an order before. In Google Analytics, a new visit is just a cookie that hasn’t appeared on the site before, so it’s hard to set a goal like new customer orders.
- This leads to contradictions between the goals of the advertising service and the business. An ad service analyzes the overall contribution to the business and measures conversions in general. But for the business, it’s important to know who placed the order — a new client or an existing client. You won’t be able to understand this without CRM data.
- Analytics is built retrospectively. That is, it looks at numbers when they can no longer be influenced. Plans are made in a table based on expert opinions or, at best, using logistic regression. Market trends are not taken into account.
- Focusing only on brand traffic can play a cruel joke with businesses. Yes, driving more traffic leads to more conversions, but this strategy scales poorly.
- Evaluating the effectiveness of advertising campaigns doesn’t take into account ROPO sales. This can lead to inefficient solutions: The better an advertising campaign stimulates offline purchases, the more undervalued it looks online. In response, it’s allocated a lower budget, which contradicts the goal of the business to grow overall sales.
- The sales and customer information that a company collects in its CRM isn’t enough to grow sales. An internal system lacks data on sessions, traffic sources, and regional breakdowns — everything that allows you to attract a target audience.
- Collect and aggregate raw data from your website, advertising sources, CRM, call tracking services, and Google BigQuery emails to link marketing metrics to business goals.
- Identify key metrics for each online marketing area. For example, the top-level task to attract the maximum number of orders with the given ROAS and RRR can be decomposed into different channels: paid search, social networks, and email.
- Set up funnel based attribution that matches your business model and takes into account all online and offline user actions and real profit from your CRM while also showing the mutual influence of channels on conversions and user promotion through the AIDA funnel.
- Reports based on attribution data from OWOX BI allow you to evaluate acquisition channels separately for new and returning customer cohorts and effectively allocate your budget to target cohorts.
- Create a forecast for each metric and track its deviation from the plan. Moreover, you should compare not the fact with the plan but the forecast with the plan. If your forecast is automatically updated based on market trends, you’ll learn about risks and growth zones before the plan turns into reality — that is, before too much time passes and you’re no longer able to influence it.
This approach helps companies develop a culture of predictive analytics that allows them to influence the future rather than analyze the past. If you see that the plan is not being fulfilled, you can build a pivot table in advance for those segments and metrics that marketing can influence.
- Do you know how digital advertising affects your company’s overall sales?
- Do your managers trust the dashboards the marketing department prepares?
- How many decisions do you make based on predictions, not facts?
Increase the speed and quality of decision-making
This goal is relevant for all data-driven companies.
Analytics helps marketers:
- Quickly find a common language with colleagues from other departments, argue opinions, and focus on common goals.
- Save time. Previously, it was necessary to spend hours compiling tables with data from different sources in Excel. Now, you can get a report in Google Sheets, Smart Data, or Google Data Studio in a couple of clicks.
- Strengthen the team with individual reports. Each employee can receive effective reports so they can see the results of their efforts, make timely decisions, and adjust advertising campaigns.
If you want to build an effective marketing strategy but aren’t sure where to start, book a free demo of OWOX BI.
Marketing is like pinning the tail on the donkey. Analysts remove the blindfold and show you what’s in front of you. What matters isn’t the mere availability of reports but the fact that they’re built on complete and accurate data and not only analyze the past but predict the future.