Role of Data Analytics in Digital Marketing

There is a lot of misunderstanding over role of digital data analytics in modern day marketing.

Most of the people in digital industry (especially the agencies), put the data, ahead of the consumers and audience.

While the data analytics tools have made rapid advancements in the last 5 years, understanding different data types in marketing, and how do we use those data types for making real business decisions, is something which gets sidelined .

‘How can we use the data for marketing?

As David Porter, VP of Media AAR for Unilever, says in one of his interviews:

Consumers are after all people, not numbers. These aren’t just hands that need washing or stomachs that need feeding. These are real people who need real communications. Data is just the way to help us get there.

 

Data analytics FOR simplifyING DIGITAL STRATeGY

 

Too much of data can really complicate the matters for the brand.

According to a Google Insights Report:

61% of marketing decision makers said they struggled to access or integrate the data they needed last year.

 

The report also mentioned, that the issue of data integration isn’t going away, as the amount of data being created continues to grow.

What’s the point of capturing and collecting so much data which makes us lose our focus?

A clear strategy around managing your data analytics systems is the most fundamental aspect in every digital strategy.

But alas, the idea is not as obvious to many people in our industry (that includes the clients and digital agencies)

DATA ANALYTICS FOR Choosing the DIGITAL METRICS

 

We live in divided times, both politically and commercially. You either believe in the power of digital metrics or you don’t. Sitting on the fence is no longer an option.

With so many different platforms, marketing channels and complex ad-tech systems, understanding or selecting the right metric has become a never ending nightmare.

For beginners, even before you choose metrics, you must create a measurement plan matching your business requirement.

In a world, where there is infinite data sets available at our fingertips, it can be tempting to go crazy and analyse the whole lot, but fine-tuning and being precise is vital to ensuring that ROI remains high and time is not wasted.

Data Analytics For FINDING MARKETING Insights

 

Neither data, nor analytics can be called sexy.

For a marketer, the sexy side of data analytics is called ‘the insights’.

Also read : Difference between Data, Analytics & Insights

No wonder the presentations are not done on Microsoft Excel.

Needless to say, marketing teams love insights.

And not just any insight, insights which are actionable.

Hence, role of data analytics is not just to spot trends but convert them into meaningful insights.

Data Analytics for CUSTOMER JOURNEy MAPPING

 

Data Analytics for Customer Journey Optimisation

According to a study conducted by MarTech company Signal, just 6% Of marketers have a single view of the customer (see above graphic).

With so many marketing channels influencing the purchase decision, customer journey is no longer linear.

Thanks to social media channels, customers can connect and interact with the brands in real time.

More often than not, Marketers have to deal with a moving puzzle due to lack of inter-operatability between various digital marketing platforms.

Role of data analytics is also to track & optimise marketing communication at every touch point and provide best possible channel attribution for maximising ROI.

Building Perspective – The First Step In Digital Strategy

The Context

Creating future ready digital strategy is on the top priority of every brand today. Here’s what you need to know to create a solid foundation.

Below graphic (source: Global Web Index) is an indication of the times we are in. In a nutshell, 65% of our media time, across audiences (in India) is spent in Online and close to 1/3rd of our digital life is spent on social networks.

Time Spent By Media Channel

 

What has really changed after Digital?

First

Gone are the days when the products were discovered in TV commercials or Newspaper Ads (refer to below graphic), according to GWI report, 50% of the global audience discover any brand on a Search Engine.

Search As Brand Discovery Channel

Second

There is a significant shift within the younger audience (18-24) segment towards social media as the new discovery channel. (see below graphic)

Social Media As Discovery channel

Social networks are now just 6 percentage-points behind search engines as the number one port-of-call for product research.

Third

A Sample Digital Customer Journey Map

A Sample Digital Customer Journey Map

SOLOMO (Social+Local+Mobile) have altered (and continuously altering) the consumer journey for all product categories.

The conventional linear journey of Awareness > Consideration > Preference > Purchase may not be able to capture all the possible decision making touch points as audience is now searching outside the funnel.

Lets take example of Automobile, thanks to the wealth of information available today through digital and traditional channels, consumers are better informed than ever—even before they actively look into buying a car.

According to BCG, 57% to 67%, depending on the country) settle on not only the make but the actual model they want to buy in the prepurchase phase.

What does digital strategy really mean?

According to Wikipedia:

Online Marketing  is an umbrella term for the marketing of products or services using digital technologies, mainly on the Internet, but also including mobile phones, display advertising, and any other digital medium.

In many ways, digital has blurred the lines between online and offline.

Hence, digital strategy is:

identifying insights about your audience, competition and category to deliver a seamless brand experience across all relevant touch points for achieving specific business objectives.

First 3 steps to infuse ‘Digital Thinking’ for your brand or agency?

Remove the line

As marketers & strategists, we can no longer be obsessed about creating television commercials only.

Our customer does not see above the line, below the line or online, lets just “REMOVE THE LINE”. It means remove the silo mentality and focus on delivering a quality experience to our audience.

Data is the new king

There cannot be any “strategic” point of view if it is not backed by data. Giving higher priority to your data in shaping your business & marketing strategy goes a long way in “future proofing” your brand.

Understanding of the metrics

“If you don’t know where you are going, any road will get you there.

~ Alice In Wonderland

While data is important, knowing the digital metrics, i.e. what you want the data for is equally important. What is also important is that evaluating digital metrics is a continuous process and not a one time exercise.

4 Things you must know as Digital Strategists

  • What is your expectation from digital? (Sales, Brand Awareness, Reach etc.)
  • What is your overall business goal? (Market share, Overall Revenue etc.)
  • Do you see digital as a separate line of business?
  • Who is your digital audience?

 

How to allocate funds for digital marketing?

Budgeting for digital marketing is a mystery for most clients.

In my experience, 2 out of 3 clients have asked me to recommend budgets for content marketing and digital media planning.

Is there a science to figure out the right media mix?

Lets go a little deeper to understand this problem.

A marketing plan is a detailed roadmap that outlines your marketing strategies, tactics, costs and projected results over a period of time.

Your marketing plan and budget keep your entire team focused on specific goals – it’s a critical resource for your entire company.

Frankly, nobody knows how much is too much for Digital and why?

Though, it is slightly easier for organisations whose DNA is 100% grounded into digital like e-commerce, gaming, music or other content apps etc.

But even for them, prioritising their budgets towards various channels is still difficult. 

I’ve consulted numerous startups at different stages of their business, marketing spend optimisation is as important as conversion optimisation. 

Here’s how one should go about budget allocation in digital marketing. 

CONTENT MARKETING Vs DISTRIBUTION (PAID ADVERTISING)

 

The first question marketers have to answer is how much they should spend in creating their digital assets and how much they need to distribute it.

Trust me, it is not as easy question as we think it is.

Key to this question lies in the understanding of digital metrics at different stages of customer journey.

  • What are we really chasing? (Brand Awareness / Brand Recall / Conversation Share / Leads / eCommerce sales etc.) For e.g. How much you should spend on content creation if your objective is sales?
  • What are your industry specific trends? ( for e.g, according to a Cisco report, B2B companies have rated video content in the top 3 most effective digital tactic for lead generation )
  • What are the general paid and organic benchmarks for Search & Social?

Allocating BUDGETs by Audience

 

People think the beauty of digital marketing is audience targeting.

Wrong!

The real beauty is the power of data analytics which helps you understanding your audience preferences in finer details.

Different data types in analytics helps you uncover various aspects of audience behaviour.

Also Read : Understanding types of data sets in marketing

It is very important to start understanding your audience reports in web /app analytics. 

Your site analytics could tell you a lot about your future customer and how you need to reach out.

By comparing sources such as paid campaigns, organic traffic and social media channels, you can apply the Pareto Principle, also known as the 80/20 rule.

You are going to find out what sources generate the majority of sales to later tune up your budget allocation.

Use the Pareto Principle and identify the top 20 percent of your traffic sources that generate 80 percent of good results. Focus your budget on that.

Also read : 80-20 rule of sales – How to find your best customers 

A/B TestING, Scale up and Repeat

 

One of the most important thing I’ve learnt in my digital career is to learn the art of creating successful pilot test campaigns.

It is vital for your to create certain hypothesis KPIs and key assumptions about your business audience which you would want to test through your pilot campaign.

For instance, if any third-party reports are saying that your target audience is actively engaging through social media and searching less on search engines, you should create a separate social led campaign to test the hypothesis.

Once you have your results, try re-verify them, but this time with slightly higher budget.

Now repeat this to your strategic benefit as it would give you enough confidence as marketer where you can keep on increasing your budgets in social media as a channel and optimise your business returns.

Create your own Digital Strategy Template

 

While allocating digital marketing budget for your brand or startup, it is critical to follow your industry best practices but at some point you must try to find some key insights about your actual audience.

A lot of times, you would realise that the actual buying audience is very different from the target group you are chasing for a long time in your media plans.

If you act fast enough, you can optimise the channel budgets in real-time which can boost your overall performance and drive efficiencies. 

Also Read : How to create your digital strategy template? 

Budget Allocation should be fluidic

 

A lot of enterprise companies allocate funds annually for marketing, but digital marketing usually requires more maintenance, with quarterly or monthly allocation adjustments.

High volume, automated buying in channels like paid search or paid social should be analysed for performance and landscape fluctuations, with budget allocations being adjusted accordingly.

70:20:10 Rule of Digital Media Planning

 

Frankly speaking, nobody can actually guesstimate the budget amount,  but new predictive modelling technologies have emerged to help CMOs forecast media performance to better allocate budgets.

If you are a nimble startup or a small business, consider the 70/20/10 rule as a good starting point.

  • 70% of the budget be allocated to “tried and tested” channels (like Search, Social Media & Email)
  • 20% to “safe bets” (newer channels like Mobile Marketing & Native Ads, that seem promising, even if they haven’t proven themselves just yet),
  • 10% allocated to “experimental” (cutting edge, unique opportunities like “Big Data” which might provide a big payoff).