How much marketing analytics do you really need?
Global marketing spending took a big hit during the calamities and uncertainties of 2020. Although average company spending as a percentage of total outlays has not yet returned to pre-pandemic rates, marketing spending experienced a strong return in the last year, climbing from 6.4% of company revenue in 2021 to 9.5% in 2022. However, the resurgence of marketing outlays doesn’t simply indicate that it’s back to business as usual. Rather, businesses are focusing on analytics in 2022.
Why the shift to analytics for marketers? Companies are navigating a transformed landscape on the heels of radical changes to business-customer dynamics. The last two years have seen an unprecedented shift to remote work, an emerging customer preference for omnichannel communication and new data technologies that have lowered the barrier of entry to extracting insightful analytics.
Market evaluations reflect these trends as well. Marketing analytics had a global market value of $2.13 billion in 2020 and will rise to $4.68 billion by 2026, demonstrating a compound annual growth rate (CAGR) of 14% for the forecast period.
With spending on the rise and decision-makers increasingly converted to the cause of marketing analytics, businesses need to understand what benefits they stand to reap and just how far they want to go to match the general trend. In this guide, you’ll learn what marketing analytics is and how to evaluate how much analytic information your business really needs to market effectively.
- Spending on marketing analytics is on the rise as businesses attempt to gain data-driven visibility into the bottom-line value of their marketing activities.
- Marketing analytics enable marketers to connect their work to return on investment (ROI) more directly than ever before while simultaneously giving them greater real-time mobility to adjust content and messaging for better performance.
- The positive correlation between marketing analytics and increased revenue is not infinite. Current trends indicate that analytics achieve maximum ROI at a depth of personalization in customer experiences.
What is marketing analytics?
Marketing analytics refers to capturing and analyzing customer data across leads, sales and digital touchpoint traffic to gauge the performance of different marketing operations. Decision-makers use marketing analytics to achieve better budgeting allocation for various channels—such as social media, content marketing, and email—as well as for user behavior analysis and user experience optimization. Analytics can indicate which touchpoints perform well—and with whom—while also drawing attention to strategies needing an adjustment in other media.
Before the digital era, when companies collected small fractions of the customer activity data they do now—and had little means to process it into actionable insights—marketers struggled to demonstrate the value of their work in terms of return on investment (ROI). They had to rely instead on metrics of their activities, such as the number of ads run, events attended or leads generated.
With the advent of data analytics, marketers can now connect their activities directly to revenue, tracking customer journeys through various touchpoints to purchase and retention. Analytics enables marketers not only to establish when their efforts generate revenue increases. By tracking customer interactions and engagement across channels, they can also connect revenue changes to specific marketing activities and channels.
Marketing analytics: the more, the merrier?
Data analytics give marketers revenue-connected insights and fine-tuning capabilities they’ve previously lacked. But is more always better? Or does the value of analytical insight taper off past a certain threshold?
The in-house IT requirements of data management have dropped about 20% in the last year due to innovations in data software automation. Nevertheless, collecting customer interaction data and drilling deeper into it for even more meaningful insights always requires additional time and resources. To find your company’s optimal analytical depth in marketing, you’ll need to divine the greatest point of convergence for analytics and revenue in your marketing pursuits.
Make it personal
All businesses face unique marketing challenges, and no one-size-fits-all solution applies in every case. However, in the current discourse over marketing and ROI, one benchmark stands out among the rest– personalization.
Across the board, the data indicates that businesses that leverage analytics to create personalized experiences and interactions for their customers outperform their peers by leaps and bounds. Throughout the customer lifecycle, brands that invest in personalization see three bottom-line benefits:
- 76% increased chance of purchase
- 78% increased chance of repurchase
- 78% increased chance of recommendation to others
Among marketers focusing on advanced analytical solutions to personalized customer experiences, 70% achieve 200% ROI. Moreover, an undeniably consistent 97% of marketers report that effective personalization in customer experiences delivers measurable gains in positive outcomes. These current statistical trends suggest that the key to translating analytics into revenue is gaining sufficient insight into your customers’ identities to create meaningful, personalized experiences at every touchpoint.
Achieving scalable personalization through analytics
Your customer data collected across different channels and platforms likely already contains everything you need to know to turn anonymous users and browsers into diverse, granularly unique people. In most organizations, the hurdle is integration rather than collection.
You need a customer data platform (CDP) to bring down the partitions in your data and create system-wide visibility. CDPs serve as an integration hub for the uncooperative data sources you have scattered across applications, databases and third-party service providers. With a CDP, you not only have this disparate data consolidated. You also have it distributed system-wide and in real-time, so all marketing operations—human and automated—have immediate access to live, unified customer profiles.
Create deeply personalized digital customer experiences with Optimizely
Optimizely can help your marketing teams see the human being behind the data set. Leveraging deep analytics, Optimizely’s insights enable your site to evolve as individual customers return, adapting to their unique preferences and behaviors. With personalization at this depth, you gain visibility into where your customers come from and how they move through your content and where they’re likely going next.
To take your digital experiences to the next level, sign up with Optimizely today.