Marketing Analytics: What Are They & Why Do They Matter?
Imagine this scenario: You spend days or weeks planning a new marketing campaign — deciding who your target audience is and what channels you’ll use, developing messaging that resonates and eye-catching creative, and then implementing your campaign across display ads, social media ads, and email. Finally, you launch your campaign, it runs for the designated amount of time, and then it ends.
Now what? How do you know if your campaign was successful? And more importantly, was it worth the money you spent?
Without the right marketing analytics tools, it can be nearly impossible to measure how your campaigns are performing and what kind of impact they’re having on your business. Marketers who aren’t utilizing data to form a proper understanding of their ROI or to optimize campaigns could, unfortunately, be wasting precious budget.
On the other hand, in-depth marketing analytics enable invaluable insights into not only campaign performance, but customer interests, behaviors, retention, and more.
What is marketing analytics?
Marketing analytics is the practice of tracking and analyzing data across marketing efforts to evaluate performance and reach a quantitative goal. Through marketing analytics, businesses are able to measure ROI, collect deep audience insights, and inform smart changes to future marketing strategies.
Marketing analytics are used to determine the success of nearly all marketing initiatives, including your website, social media campaigns, email blasts, blog posts, etc.
A vast number of data points are collected through marketing analytics as well. They include everything from basic metrics such as:
to more sophisticated metrics like:
traffic by device type
geographic location of users
Types of marketing analytics
Marketing analytics fall into a number of categories, each of which interprets certain kinds of data. Each category of analytics produces unique insights, but businesses benefit the most by using a combination approach. The three most common types of marketing analytics are:
Descriptive marketing analytics
Descriptive analytics explain what happened in the past. This type of analysis often serves as a foundation by surfacing historical performance data that is generally easy to understand. Examples include an annual sales report, the number of form fills on a webpage, and percentage of people who clicked on a display ad.
Descriptive marketing analytics help marketers establish data patterns and trends. Often, descriptive analysis answers the “what?” but not the “how?” or “why?”
Predictive marketing analytics
As the name suggests, predictive marketing analytics explain what could happen in the future. By analyzing descriptive data, marketers can begin to predict how those trends will carry on and impact future outcomes.
For example, many businesses use predictive analytics to recommend new products to existing customers. An online beauty company may know that Customer A purchased shampoo and conditioner for damaged hair recently. Based on that purchase, the company knows Customer A is likely interested in damaged hair products and can begin serving the customer retargeting ads featuring leave-in conditioners and similar products.
Prescriptive marketing analytics
Prescriptive marketing analytics explain what should happen — and are the most advanced of the three types. This form of analytics uses learnings from descriptive and predictive analysis to make actionable recommendations for the future. Sophisticated algorithms, machine learning, and other technologies are used to power prescriptive analytics, which guide marketers to optimal outcomes while reducing the risk of human error.
A common example of prescriptive marketing analytics is email automation. Marketing automation software will automatically segment customers into groups based on behavior, intent, and other factors, and then deliver email content based on those traits. Customers are moved into different segments based on how they interact with each email they receive, and the cycle continues until they take the desired action (often, this is making a purchase).
Why is marketing analytics important?
In today’s digital world, shoppers are inundated with marketing messages and tactics everywhere they look. This has allowed them to become more selective in the media they choose to engage with — and ultimately the purchases they decide to make.
To capture shoppers’ attention and drive sales, it’s crucial for marketers to have access to robust data that allows them to target the right people, on the right channel, at the right time, with the right message. Marketing analytics tools surface this kind of information, which is used to shape the most effective and profitable marketing strategies.
Gain the benefits of marketing analytics
If you’re new to marketing analytics or your current analytics software isn’t cutting it, explore AdRoll’s all-in-one digital marketing platform. Our Cross-Channel Performance Dashboard makes it simple to analyze, segment, and optimize your campaigns across Google Search, display, and social media — all from one place.
The AdRoll Cross-Channel Performance Dashboard makes it easy to see campaigns holistically, analyze performance, run reports, gather insights, and optimize to improve return on investment.
Marketing analytics is the practice of tracking and analyzing data across marketing efforts to evaluate performance and reach a quantitative goal.
What are the main components of marketing analytics?
A successful marketing analytics strategy involves four main activities:
Deciding what you want to measure and what your goals are
Collecting accurate and timely data
Analyzing the data, including identifying trends and making predictions
Acting on data insights to improve performance and achieve higher return on investment
Why is marketing analytics important?
Marketing analytics is important because it allows marketers to measure ROI, collect valuable audience insights, and make improvements to marketing strategies and initiatives. Marketing analytics tools enable marketers to optimize their marketing activities so shoppers receive the right message, on the right channel, at the right time.
How do you use marketing analytics?
You can use marketing analytics to learn about your customers and prospects (their interests, behaviors, and what motivates them to buy, for example) and campaign performance. Metrics like email open rate can indicate how well the messaging in the subject line is working, while customer lifetime value (CLV), which measures retention, could indicate a need for better targeting or lower acquisition costs.
What are the benefits of marketing analytics?
The benefits of marketing analytics include:
A clearer understanding of who your customers are and what they want
Visibility into how your marketing campaigns are performing — by themselves and as a whole
More precise segmentation and targeting
Insights to inform a more effective marketing strategy