Analytics is big business-and predicted to become even bigger. In International Data Corporation's (IDC) forecast on the growth of the business analytics market, "Worldwide Business Analytics Services 2014-2018 Forecast," a growth of $51.6 billion to $89.6 billion is predicted over the period. For those companies without inside staff expertise, there also is a predicted increase in the use of outside resources of 12.8%.
There are a wide range of analytics readily available to even the smallest organization, many at no- or low-cost. But taking it all in can be like trying to drink from a fire hose. What's meaningful and what's not? Which tools provide the best insights into what's working? Can marketers rely on the data released by the sites themselves (e.g. Facebook, Twitter), or should they be doing some reality testing with other tools?
The issues-and answers-can be murky, but as with any marketing-related undertaking the answers should be driven by strategy says Cesar Brea, founding partner of Force Five Partners, in Massachusetts, is a marketing analytics expert and the author of Marketing and Sales Analytics (Pearson FT Press, 2014).
"What I've found is that success with analytics is really as much about getting the conditions right as it is about any brilliant PhD or insight that you have," says Brea. He has identified four conditions that he says marketers should pay attention to:
- Making sure the senior team is aligned on what questions are worth asking. There's much that you could know about the online activities of your target audiences, but you need to stay focused on what you need to know. Too often, says Brea, marketers are focused too much on the tools and not enough on the metrics they need to follow to drive business success.
- Thinking about access to data. "That may seem obvious, but if you don't have the data you can't answer the questions." Where the data is coming from can impact what it is telling you.
- Considering your ability to act on the data. This may also seem obvious, says Brea, but he notes: "There's no point in doing a lot of analysis of something that, in the end, you can't act on."
- Having a marketing analytics orientation. That requires collaboration between marketers-who may be data averse-and the more analytically minded.
The first step for marketers, he advises, is actually sitting down and outlining the specific questions that you are trying to answer. Then, he says, it's time to consider the tools that you'll need to get at those answers.
Kirill Storch, president of Electric Web, says, "No analytics tool will provide you with the most meaningful KPI which is money in the bank. In fact, he says, "old school analytics of measuring actual cash flow should always be priority number one."
While an enormous, and ever-growing, number of tools exists, less can be more says Storch. In addition, marketers do not have to spend a great deal on these tools-many are readily available at low, or no, cost. Google Analytics is arguably the big gorilla.
"For most campaigns we find Google Analytics to be sufficient," says Storch. But he says, no single analytics panel paints a full picture. "I don't recommend that someone export a Facebook or Twitter analytics report and use that as the basis for overall campaign performance, even if it is a Facebook or Twitter campaign they are measuring." Results, he says, must always be compared with on-site analytics and larger business KPIs such as gross revenue.
Tim Neighbors, digital marketing manager for SAVO, a sales productivity software solutions provider based in Chicago, cautions marketers away from what he calls "vanity metric." These, he says, are "numbers that can be reported, but don't actually represent anything meaningful." For example: raw webpage traffic, Twitter followers, etc.
"Digital analytics are absolutely necessary for program optimization," says Neighbors. "But, if marketers want to be relevant to the C-suite and build relationships with sales and finance, the analytics need to tie back to pipeline and revenue." Since every organization's business model and data needs will vary, no one tool will be right for all. The key as Brea and others suggest, though, is to focus more on what you need to know to drive business results and select the tools that provide the right data. Starting with the tool is the wrong approach.
Beware, cautions Brea, of becoming overly enamored of the proliferation of articles that espouse lists such as "The Top 12 Twitter Analytics Tools." That list is irrelevant until you've identified the top questions you need answers to.
(Image courtesy of Shutterstock.)