Using Analytics Smartly To Measure Marketing Effectiveness
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Ever since inception, marketing has always faced a strange challenge – of being seen as a cost center. While marketing activities are always prominently visible, its direct impact on the revenue is not - creating the 'cost centre' perception. However, irrespective of a sales team's efforts, sales results are always measurable which gets them all the credit for revenue.
Finally there is good news now! In the era of Big Data and Digital Marketing, there are numbers with higher degree of accuracy to prove a thing or two about marketing’s effectiveness and impact on the company’s bottom line.
There are a multiple analytical tools available today to cull out, organize and present marketing data. They all look and sound impressive. How do you choose which of these these to use and which ones to discard? After all we are a greedy lot. When we see data, we want it all!
For me, the biggest watch out would be analytics which are just ‘feel good’ data. These are data that support marketing spends but have no actionable point. They make for fabulous charts and graphs for presentations to impress the sponsors but do not provide any insights which will help to achieve business objectives.
Having been a hands-on marketer for over a decade and a half, I feel the best way to select what you should measure is to keep asking yourself how you are going to use the insight emanating from the data to reach your company’s vision and achieve your department’s objective. Cool charts and graphs will not help to achieve business objectives but impactful insights will.
To drive accountability of marketing spends, I would evaluate analytics basis three distinct parameters :
1. Effectiveness vs Efficiency Measure :
I don’t want analytics which tell me how well I am doing what I am doing. I want it to tell me if what I am investing on is effective or not. Without effectiveness measure, efficiency loses its meaning. If an activity is not going to help me achieve the results I am investing towards, what’s the point of doing the activity very well. For example, my social media efforts may be extremely successful in terms of numbers but is the result contributing to the marketing objective? If not, there really is no point in running the programme however successful.
2. Actionability of the data
Does the data have an actionable outcome? My biggest bug bear is ‘feel good’ data. It just takes up a lot of mindspace without any impactful insights. What good is it for me to know that how many people downloaded my free app, if I don’t know what’s stopping them from using it for transactions and what will motivate them to do so.
3. Quality vs Quantity
Analytical tools are programmed to slice data in multiple ways. But in this case, quantity is not useful. In fact its frightening. My job is not to conduct a data fest but to support business growth. Show me good quality data for carefully selected five parameters and I will love you for life. It is difficult for an organization to focus on data beyond five parameters. Give me depth. I don’t want width.
To use analytics smartly to measure marketing effectiveness, my advice would be to select data analysis aligned to your company’s key performance indicators. Don’t waste a minute measuring any data that does not help you drive the overall business objective. End of the day, the idea is to align to the business and drive results, not just pat each other on the back.