It’s not our place to discount intuition as a source of business wins. In fact, we’d be doing you a disservice if we told you to ignore your instincts in favour of calculations. The reality, however, is that avoiding the numerical side of business is a recipe for disaster—it’s choosing to ignore a clear advantage and all the possibilities that come with it.
In this article, we’ll do our best to convince you of the power of numbers in digital marketing. We’ll go over key concepts and illustrate how the best businesses and marketers put them into practice.
Digital marketing analytics is the practice of using data in order to understand, analyse, and optimise your digital marketing efforts.
There are dozens of ways data can be used in marketing such as customer segmentation (grouping customers according to demographic and behavioural traits), demand forecasting (using data to predict future demand), lifetime value prediction (estimating how much a customer will spend with your brand), and so much more.
Digital marketing analytics is a systematic and data-driven process that shows a realistic view of the hidden figures that govern how your customers think and choose.
Many marketers and business owners have discovered that digital marketing analytics can shed light on just about anything they want to know—provided they have the resources and expertise needed for proper research.
Closely related to this is the concept of big data, or the use of massive datasets which can no longer be stored in a spreadsheet.
As a basic statistical rule, the more data you can observe, the more accurate your eventual findings will be. For instance, polling five strangers on the street won’t tell you much about how the nation feels about, say Rugby League—but polling fifty thousand randomly selected participants certainly will.
I. Customer Segmentation
No two customers are exactly alike, but they can share enough common traits to count as belonging to specific groups or customer segments. For example, a business that sells sporting goods might see business coming from a wide range of age groups, sports interests, or purchasing patterns.
It can benefit a marketer to sort leads by what they’re looking for in a product, what turns them off when it comes to marketing, and how they prefer to go about shopping. These kinds of insights can inspire more targeted marketing and better ROI for your campaigns.
Of course, you wouldn’t know where a customer fits just looking at their faces (or email addresses, as is the case for most of today’s marketers). Many different factors have to align for marketers to truly profile their leads and customers, which is where digital marketing analytics comes in.
II. Smarter Diagnostics
Every business wants its marketing campaigns to succeed. Unfortunately, few have a good understanding of what success looks like. A spike in customers after a Christmastime marketing campaign looks like evidence in favour of the campaign—but it could also be a matter of seasonality.
Digital marketing analytics allows for more precise monitoring and evaluation of nearly every component of your marketing. There are processes for measuring the impact of a marketing campaign against previous ones, and even ways to know if the colour or placement of a button on your website leads to more conversions.
III. Business Forecasting
While we haven’t developed a way to peer into the future (yet), predictive analytics are an effective means of seeing how certain business outcomes are likely to wind up. We emphasise likelihood because again, achieving certainty is still beyond the power of modern technology.
Given enough data, a marketer could forecast how well a marketing campaign will do and come back with a range for potential ROI. Likewise, they could create forecasts to illustrate how current efforts at growing a brand’s social media following will play out over the coming months or years.
IV. Lifetime Value Prediction
Digital marketing analytics can yield insights into the lifetime value of a customer: their likelihood to spend more in the future, as well as how much and how frequently that spending will probably be.
This is an invaluable asset for businesses with an interest in customer care and retention. Running these numbers can point you in the direction of which customers exhibit the most loyalty, and which ones need more work.
Now that we’ve covered the benefits of understanding the numbers, we have a caveat to make: the benefits won’t come without some hard work. It’s a fact of life and business that makes no exception here.
Performing analytics to improve your sales and marketing outcomes takes a significant investment. It’ll cost you time and money to achieve the mastery needed to gain expertise, equip yourself with the necessary tools and software, and finally put that data to work.
Outside of large and wealthy organisations, you won’t see many businesses running analytics in-house. If they do, they’re working at a lower level of scale compared to the full potential of the field. Many trust agencies and consultants to get the job done and oversee data gathering, storage, processing, and analysis.
Getting familiar with the numbers that describe and propel your business is a profitable step. It works hand-in-hand with instinct to help entrepreneurs and their staff make smarter and better-informed decisions.
It’s a challenging field to be sure, which is why we at Emedia Creative are dedicated to helping businesses reap the benefits of business intelligence without having to sacrifice their time and work hours. Our team of experts have decades of combined experience in assisting businesses with their marketing, and we stay current with major developments in the field.