Marketing analytics poses a unique opportunity to merge your technical analytical skills and inner creative. In our increasingly computerized age, data analysis can be the key to reaching untapped potential in your marketing efforts.
In this guide, we’ll explore the fundamentals of marketing analytics, brief history, relevant terminology, career tips, and popular tools and resources to help you excel in this field. Let’s dive in!
Marketing Analytics 101
At its core, marketing analytics is the practice of evaluating and interweaving data to guide your marketing efforts. This data can be diverse. From campaign performance to competitor analysis, market research and site traffic metrics – a comprehensive marketing analysis takes both big-picture trends and individual tactics into account.
Data and analytics are essential to remain competitive in today’s highly competitive and saturated ecosystem. By dissecting and identifying patterns in marketing data, analysts can leverage their insight to measure the success of your current marketing efforts and suggest areas of improvement.
In practice, what does marketing analytics actually entail?
The fundamentals of marketing analysis can be split into 3 stages:
1. Data collection
2. Data Analysis
3. Optimization of campaigns
The first step: gather information. Track data about customers, metrics, market trends, and other relevant data points. Data can be sourced through a variety of means, including surveys, external parties, and web analytics. It’s important that the information is accurate, relevant, and reliable, as the quality of the data will affect the accuracy of the analysis.
After your data has been collected, it’s time to study and interpret your data. This typically involves using statistical methods to extract insights from the data collected. The goal of data analysis is to identify patterns and trends that can be used to inform marketing strategies.
Optimize your campaigns
Optimization is the final component of marketing analytics. Insights obtained from the analysis can be used to predict probable outcomes in the future and even recommend the best course of actions to achieve a specific goal. This can include adjusting targeting criteria, testing messaging, or refining which channels are used. It’s important to note that optimization is an ongoing process that requires constant monitoring and adjustment to ensure maximum effectiveness.
While modern marketing analytics is primarily focused on digital channels, its roots can be traced back to the first market research studies conducted in the early 1900s. Initially, data was collected using surveys and focus groups. As statistical methods improved, marketing analytics followed suit. Advanced statistical methods enabled marketers to analyze data and identify patterns in behavior that were not immediately visible.
The emergence of computers and the Internet marked crucial junctures in the industry. Computers, machine learning, and statistical modeling revolutionized marketing. Baffling amounts of data could be analyzed in real-time and used to predict future outcomes. Coupled with the Internet, complex consumer data and market research can be gathered, analyzed, and distributed at an unprecedented scale.
Today, marketing analytics is a testament to the power of data. Small businesses and large enterprises alike leverage the same principles to optimize the way they do business. As technology continues its rapid evolution, marketing analysis will undoubtedly play an increasingly important role in the success of modern businesses.
Terms to know
A means of determining which marketing tactics impacted a customer’s journey or resulted in a desired action, typically a sale.
The percentage of users or customers that take a desired action, such as making a purchase or completing registration.
Cost per action, also known as cost per acquisition. A measurement of the cost of a customer taking a specific action, such as making a purchase, clicking, or subscribing.
Compiling large volumes of marketing data into a centralized location. This is typically done to organize information and ease analysis.
A statistical analysis that provides insight into past performance and is used to explain what happened in the past, as well as how it happened. By interpreting historical data, descriptive analysis can identify patterns in consumer behavior, measure the effectiveness of previous marketing tactics, and identify areas for improvement.
First Party Data
Also known as 1P data. Information collected directly from customers. This data is typically owned by the company and can be collected via user registration, event-based tracking, and website activity. First-party data is valuable as it can be used to better understand your audience, personalize the customer experience, and create ads.
Lifetime value. The estimated revenue a customer will predictably generate throughout their relationship with a company.
Return on ad spend. A means of measuring the amount of revenue per each dollar spent on paid advertisements. ROAS is an indicator of the overall effectiveness of paid ads.
Return on investment. A means of measuring the effectiveness of your marketing tactics at driving revenue. ROI is often used to make educated decisions to optimize marketing campaigns, such as allocating budget spend to concentrate efforts around high-impact channels.
A secondary statistical analysis that builds upon descriptive analysis and historical data to predict what may happen in the future. Using statistical models and machine learning to extend patterns into the future, prescriptive analysis can determine the probability of different outcomes and identify risks and areas of opportunity.
A tertiary statistical analysis that provides actionable insight for future decision making. This approach can predict the why behind what may happen in the future and what should be done. Simply put, prescriptive analysis uses data-driven insights to assess the most probable outcomes and inform decisions, ultimately recommending the optimal course of action.
Second Party Data
First-party data acquired from a trusted partner, typically one that shares a target audience or has established a mutually beneficial relationship. Second-party data can be an effective way to refine audience insight and reach new prospects.
Information obtained by a data aggregator. Third-party data is collected from a variety of sources, compiled, segmented, and sold to external organizations. This data is often more generalized than its zero, first, and second-party counterparts.
Distinct tracking components embedded in URLs to measure the effectiveness of marketing campaigns. These parameters can be easily tracked to classify site traffic and reveal where visitors are coming from.
Presenting your data and results of the analysis in a visual format that is easy to understand, often using charts, graphs, and reports.
Zero Party Data
Data that is voluntarily shared by customers. Information collected through surveys, polls, and feedback forms are examples of zero-party data.
- Familiarize yourself with the fundamentals of data analysis. Having a solid foundation in statistics and data analysis is the first step for anyone looking to succeed in marketing analytics. Understanding concepts such as variance, regression, and correlation can help you make more informed decisions based on data.
- Understand your goals. The first step to successful marketing analytics is to understand your goals. What are you trying to achieve with your marketing efforts? Are you trying to drive sales or generate leads? Increase brand awareness? Having a clear understanding of your goals upfront is key to tailoring your analytics approach to measure the metrics that matter most.
- Analyze your data regularly. Regular analysis of your data is crucial to success. Set aside time on a regular basis to review your data and look for trends and insights. Use this information to adjust your marketing campaigns and optimize for better results.
- Practice, practice, practice. Like any skill, becoming a skilled marketing analyst takes practice. Look for opportunities to work on real-world marketing analytics projects, either through internships, volunteer work, or side projects. The more experience you gain, the better you will become.
Tools & resources
As a marketing analyst, you have a wealth of options for your tech stack. Here are a few of the most popular tools and resources within the industry:
A staple among marketers. Google Analytics is a free web analytics tool that allows you to track and analyze website data. It’s a great tool for understanding customer behavior, identifying areas of improvement, and measuring the effectiveness of your marketing campaigns.
A data visualization tool that can help you turn complex data sets into easy-to-understand visuals. Tableau includes a wide range of features for data analysis and can be used to create graphs, charts, and interactive dashboards.
Hubspot is an inbound marketing software platform that offers a robust set of tools for managing and analyzing marketing campaigns. It includes features dedicated to analytics, email marketing, and lead generation. tools for email marketing, lead generation, and customer relationship management (CRM). It’s a great tool for managing all aspects of your marketing campaigns in one place.
Google Analytics Academy
No need to fret if your hands-on experience with Google Analytics is limited. Google Analytics Academy is a free online learning platform that offers courses on mastering the platform, covering everything from basic analytics concepts to more advanced topics such as custom reporting.
Coursera is an online learning platform that offers a wide range of certifications spanning on marketing, analytics, and a diverse range of disciplines. The site is extremely beneficial for junior marketers looking to improve their skills or any professional exploring new career paths.
As a marketing analyst, you’ll have the opportunity to tangibly impact your company’s marketing strategies. Familiarizing yourself with the fundamentals of marketing analytics and leveraging the power of data positions you as a valuable asset to any company and can help you succeed in a competitive industry.
Want to learn more about a career as a marketing analyst? Read our in-depth marketing analytics career guide!