The analytics era seems to finally have arrived in marketing.
The question is, “Are marketers actually ready?”
For example, three-quarters of brands say they are spending more on marketing technology this year, with 24% claiming to be spending significantly more, according to a recent Forrester report.
It looks like marketers are finally taking this seriously.
At the same time, just 10% of brands in that report say they have a clear picture of who their customers actually are. Not just the data, but who they are as people, and how that affects their consumption habits.
Something’s not right here. I suspect we know why.
We've heard more than a few stories like this. A major marketer is fixated on using advertising to drive acquisitions and wants to better manage its return on investment. So, it turns to one of the many technology partners in the market for help in building a multi-touch attribution (MTA) models.
The marketer is excited about the promise of better analytics, so they invest a significant amount of time and money along the way. Then they start getting insights back, and realize they have loads of questions they can’t answer, such as:
“Are these numbers good or bad?”
“What is success?”
“What should we do with this information?”
“How do we take this insights and move our budget to places that will drive more acquisitions?”
Faced with all these fundamental questions, instead of taking the bold action they dreamed about, the marketer freezes. Eventually the company abandons the MTA tool with little to show for their investment.
Like I said, we've seen and heard lots of stories like this. We can help make sure this doesn't happen to you.
Making effective marketing decisions is complicated.
There are many considerations to determine which strategies are working and which ones aren’t, but that’s only the first piece of the puzzle. Once you figure this out, the next question is always “Why?” and then “What can we do about it?”
That’s why so many marketers are investing in advanced analytics tools like Multi Touch Attribution and Market Mix Modelling. These kinds of products theoretically answer those questions, helping you guide effective decision making and uncover optimization opportunities.
Currently, marketers spend 5% to 7% of their overall budgets on data analytics. According to the CMO Survey, that number is expected to jump to 11.3% in the next three years.
Which is great, but only if these brands get a return on their analytics investment.
This is easier said than done. I’ve seen many organizations adopt advanced analytics approaches but fail to use the insight gained in an effective way.
In almost every case, these brands want to improve ROMI (return on marketing investment). Yet as they proceed with their analysis, they often realize that different pockets of the organization have very different definitions of ROMI.
If everybody has a different measuring stick for success, as a marketer you will not be able to make many informed decisions. You probably suffer a perpetual state of indecision.
The good news is, we’ve seen this play out before, and we can help you through it. Here are five ways you can avoid letting your analytics investment languish - and turn your insights into powerful, profitable action for your organization.
Determine clear KPIs for the business and have the entire company agree upon them. This can be done by having open honest conversations about what the drivers of your business are.
Hold everyone accountable to those KPIs. If there is no accountability, people will not take action upon results, leading to a lot of wasted resources. The Harvard Business Review has outlined five ways to hold people accountable:
Train teams to accurately interpret the results. It’s crucial that your people must understand what the outputs are telling them in order to implement effective actions to drive business growth. For example, ROI is a simple metric that many marketers understand, but what they may not know is what is considered good/bad for an ROI.
Bring together additional considerations to tell the full story. There is more to performance than just what the model tells us. A marketer should ask themselves why something is performing well or badly. For example, who was the target audience? Is there an opportunity to invest more into those tactics? What additional media was in market? Were there additional factors at play that could have influenced results?
Partner closely with your analytics teams. Unfortunately, I've seen many organizations in which these two groups work in silos, which results in marketers not always being clear on what they need, and analytics teams providing less than actionable insights. On the flip side, when the two groups come together, I’ve seen them come up with those Ah-ha! moments marketers dream about when starting their analytics journeys.
Only when all these factors come together can marketers extract the true value out of their models, as they will be empowered to make smarter business decisions.
For example, a client of ours previously had a seasonal campaign running. Before it started, everyone, including the senior leadership team, came together to determine and agree upon the main KPIs.
We built a multi-attribution model to measure against the KPIs and trained the client and media agency on how to accurately interpret the results. Multiple stakeholders with different types of data and insights came together to discuss the results and it was determined that some creative messages weren’t resonating with their customers.
Therefore, the company adjusted their creative in their media during their campaign. This resulted in a multi-million dollar increase in revenue, which more than paid for the models.
In the example above, all the pieces of the puzzle came together to empower marketers to make smarter business decisions which drove more value for their organization.
It can be done - with the right help.
Lindsay Egan is a partner at Gain Theory