Marketing analytics is the practice of measuring and analyzing data and metrics to understand the impact of marketing activities, maximize ROI and identify the areas of improvement.
Welcome to MTA’s MarTech 101 (#MarTech101) series, where we take a deep dive into the basic ideas, concepts and tools of MarTech. No matter where you are in your MarTech journey, this exploration of the basics is sure to help you do your job even better.
THE NEW RULES OF (MULTI-CHANNEL) CUSTOMER ENGAGEMENT: HANDBOOK FOR GROWTH MARKETERS
Winning CX will come from Brands who can balance relevance, consistency and convenience to drive engagement. The kind of engagement that drives optimal customer lifetime value and real business impact.
In this installment of MarTech 101, we look at the fundamentals of Marketing Analytics.
In the pre-digital era, marketing had gained notoriety for being a cost center. Marketers would spend a lot of money on promotional activities, which were virtually untrackable. Then came the era of Digital Marketing; with the introduction of analytical tools, marketers could track each activity on their website. These Marketing Analytics tools enabled them to invest their budgets wisely and allocate their efforts and personnel to the channels that yielded the maximum Return on Investment (ROI).
In this primer, we look at the fundamentals of marketing analytics. We start by understanding the concept and the need for Marketing Analytics. Then, we look at the different attribution models and delve into the more intricate aspects of Marketing Analytics.
Table of Contents
Let’s dive in!
Section I: The Fundamentals of Marketing Analytics
What is Marketing Analytics?
“What gets measured gets managed.”
~ Peter Drucker (Management Consultant and Author)
An effective marketing analytics practice tracks and collects data across multiple marketing channels and consolidates it into a single view.
Also Read: Predictive Analytics for Right-Brained Marketers
Why Do You Need Marketing Analytics?
“I never guess. It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.”
~ Sherlock Holmes in “A Study in Scarlet” (by Arthur Conan Doyle)
As a marketer, along with your long task list, you need to be conversant with every new marketing medium that is introduced. But how do you know which of your efforts are making a difference? Is the new platform that you just signed-up for even bringing in any results?
You can’t rely on guesswork or gut feeling to be successful in this era of marketing. You need to back up the feasibility of every activity with facts and figures. Marketing analytics reports every action a visitor takes on your digital properties or even on social media. It helps you understand which marketing activities are bringing in revenue.
5 Ways Marketing Analytics Helps Your Business
- Understand your target audience in greater detail
- Identify where your competitors are investing their efforts
- Measure how well your marketing campaigns are performing
- Monitor current trends and predict future trends
- Use data to decide the future course of action
What are Marketing Attribution Models?
“If you stick with one attribution model, you might not get the full picture. If you use multiple models for one campaign, your data might conflict and it will be difficult to understand.”
~ Chris Miglino Chairman and CEO, SRAX
Since we’re talking about justifying the ROI of your marketing activities, let’s delve a bit more into marketing attribution. Understanding consumer behavior is a complex phenomenon. Even though you might have laid out a sound conversion funnel, you will not be able to easily figure out how a visitor ended up becoming your customer, as a customer goes through multiple touchpoints along the buyer’s journey. Marketing attribution helps us solve this mystery.
Different types of marketing attribution models can help you assign revenue credit to various touchpoints based on their contribution to the revenue.
7 Types of Attribution Models for Marketers
Single Touch Attribution Models
Single touch models assign revenue credits to only one touchpoint — either the first or the last.
First Touch Attribution
First touch attribution assigns all the credit to the first touch point that the customer interacted with. For example, if the customer got to know about you through a social media ad and then did an organic search to come to your website to make a purchase, then all the credit is given to the social media ad.
Last Touch Attribution
This attribution model is the exact opposite of first touch attribution, i.e., it attributes a 100 percent credit to the last touchpoint.
This is the easiest attribution model to implement, but it also is the most inefficient model because it completely disregards the previous touchpoints that may have contributed to the sale.
Multi-Touch Attribution Models
In these models, multiple channels get revenue credit for contributing to the final sale.
This model assigns equal credit to each touchpoint that contributed to the sale. For instance, if a customer interacted with three touchpoints, each touchpoint gets roughly a 33 percent revenue credit.
Time Decay Attribution
Time decay model attributes revenue credits to touchpoints that were closer to the conversion.
U-Shaped or Position Based Attribution
In the U-shaped attribution model, 40 percent credit is assigned to each — the first and last touchpoint. The remaining 20 percent is distributed evenly among the middle interactions (touchpoints).
Also Read: What is Customer Experience (CX)? Definition, Design, Management, Best Practices and Examples
Section II: The Basic Concepts of Marketing Analytics
What Are Some Commonly Used Marketing Analytics Tools?
“There is nothing so terrible as activity without insight.”
~ Johann Wolfgang von Goethe
Although Google Analytics is known as “The marketing analytics tool”, it tracks primarily owned properties such as a website or mobile app, and it has some limitations. Along with owned web properties, marketing analytics covers other marketing channels such as social media, paid ads, etc.
Let’s look at the six most widely used categories of marketing analytics tools:
1. Web Analytics Tools
Web analytics tools track events, actions, and other demographic, behavioral, technological and geographic characteristics and attributes of visitors within a website or app. Most companies use at least one web analytics tool to track user activities on their website.
Web analytics tools also track quantitative data such as page views, bounce rate, average time on page, traffic sources, site content, site speed, and conversions.
Here are five web analytics tools for you to consider:
- Google Analytics
2. Visual Behavior and Testing Tools
Collecting quantitative and qualitative data is just one part of overall web analytics. Web analytics tools have certain shortcomings – such as the fact that they can’t track how your visitors behave on your website. Although they provide quantifiable behavioral data, this is not enough. You need a tool that presents such behavior visually, for easier consumption and action.
Visual behavior and testing tools do precisely that. Also known as website optimization tools, these solutions track where users interact with individual webpages through heatmaps and session recordings, conversion funnels, form analysis, etc.
Based on such data, you can further improve website performance with the help of A/B testing tools.
Some of the most commonly used website optimization platforms are:
3. SEO Analytics Tools
SEO analytics platforms provide marketers with insights that help them improve their SEO results. These tools help with queries (keyword phrases that your website ranks for), SERP analysis, keyword insights and suggestions, competitor analysis and backlinks, to name a few.
The following tools can help you enhance the search engine ranking for your business website and landing pages:
- Google Search Console
- Bing Webmaster Tools
- Moz Pro
4.Social Media Analytics Tools
You need to track how people engage with your social media content in terms of likes, comments and shares, along with link clicks and rich media stats.
You also need to find the relevant people in your industry and start a conversation with them. There are specific social media tools that help you find such influencers in your field.
Let’s look at a few social media analytics tools that do exactly that:
- Facebook Insights (Native social media analytics tool)
- HootSuite (Social media management tool)
5. Content Analytics Tools
You constantly need to stay in the know in your field to maintain your competitive edge. Content analytics tools keep you up to date with the latest and most popular content developed by your competitors and publications in your industry. These platforms also help you find influencers in your niche who can amplify your content.
Here are a few content analytics tools:
- Google Alerts
- Google Trends
- Ahrefs Content Explorer
6. Email Analytics Tools
Now, there are no standalone email analytics tools. The analytics feature comes in-built with email marketing and marketing automation suites that give you a complete breakdown of your email and campaigns.
Here are a few email marketing tools that help you with email analytics:
- Campaign Monitor
- Constant Contact
What Metrics Do You Need to Get Started with Marketing Analytics?
“You don’t need to learn what customers say they want; you need to learn how customers behave and what they need. In other words, focus on their problem, not their suggested solution.”
~ Cindy Alvarez, Principal Design Researcher at Microsoft in “Lean Customer Development: Building Products Your Customers Will Buy” (Source)
Note: For the next section, we will primarily focus on web analytics and refer to the terms used in Google Analytics. Although this article is platform agnostic, knowing these terms will enable you to understand most of the platforms available in the market.
What are Dimensions and Metrics?
Before we delve into metrics, let’s understand the difference between dimensions and metrics. Google Analytics reports are a tabular format, each row represents dimensions and metrics in its respective columns.
A sample geographic report in Google Analytics can be seen here:
So, in the above representation, Country is a dimension and Users, Sessions, Bounce rate, Sessions, etc. are the metrics.
Also Read: 5 Must-have Skills of a Marketing Analytics Manager
The 6 Major Categories of Metrics Used by Marketers
1. Foundational Metrics
When you log into Google Analytics, you will see a snapshot of the overall functionality of the website:
Important Foundational Metrics
- Sessions: A session is a group of interactions a user performs with your website within a fixed time frame.
- Users: This is the number of visitors who initiated at least one session with your website.
- New Users: This metric shows the number of first-time users.
- Page Views: Pageviews is the total number of pages viewed by users.
- Average Session Duration: This is the average length of a session.
- Bounce Rate: Bounce rate shows the percentage of visitors who navigate away from the site after viewing only one page.
- Conversion Rate: Conversion rate indicates the percentage of users that completed a goal (such as submitting a form or buying a product/service).
2. SEO Metrics
Search engine optimization (SEO) is all about the processes and strategies people use to rank higher in search engines like Google, Bing, Yahoo, etc. to drive more organic traffic to a website.
You can monitor the following metrics to measure the effectiveness of your SEO activities:
- Organic Traffic: This is the traffic that comes from the Search Engine Result Pages (SERPs). You can dive deeper by segregating this traffic by location, devices, etc. to understand the impact of each aspect.
- Keyword Ranking: This is how well your website or webpages rank in SERPs for relevant/target keyword phrases.
- Branded Keyword Searches: This measures how many users search for your offerings by product or brand name.
- Organic Conversion Rate: The number of users that landed on your website through organic search and completed a desired goal.
3. Paid Ad Metrics
Measuring paid ads is important because, well, you’re spending a ton of money generating clicks on the link to your website.
To make sure your investment is paying off, measure the following four paid ad metrics:
- Click-Through Rate (CTR): CTR is the percentage of users that clicked on your ad to the number of times it was viewed (which is, impressions).
- Cost per Click (CPC): This is the money spent to generate each click. If you are running multiple campaigns, you need to calculate average CPC when working on a consolidated report.
- Conversion Rate for Paid Ads: This is the number of users who completed a desired goal after clicking on your ad.
- Cost per Conversion (CPC): CPC measures the money spent to complete one conversion. It is obtained by dividing the total spend by the number of conversions. For example, if you have five conversions after spending $100, then the cost per conversion is $20.
Top 20 Content Marketing Online Courses and Certifications to Enroll in 2020
4. Blogging Metrics
Tracking the following key blogging metrics will help you analyze the success of your blog and find areas of improvement:
- Blog Visits: This is the number of visits your blog gets in a given period.
- Traffic Sources: This metric tracks the sources, such as organic, social media, email, etc., that drive traffic to your website.
- Comments: This displays the number of comments you get on your blog posts. You can further see the average comments per post.
- Top Viewed Articles: Top viewed articles give us the most read articles on the blog. You can use this metric to identify future topics for your content strategy.
- Average Views per Post: This metric can help you understand whether you should focus on a few pieces of quality content or churn out content more frequently.
- Blog Conversion Rate: The blog conversion rate denotes the number of users who completed a desired goal after coming to your blog.
5. Social Media Metrics
Marketers have a tough time focusing on the right social media metrics as social media ROI is still difficult to arrive at, unless you’re running paid ads. Let’s look at the three key social media metrics to focus on:
- Social Media Engagement: This is the foundation of all social media metrics. Though they may be called ‘vanity metrics’, they are still important as they measure how well your content is being received by your audience. The most important engagement metrics are post likes, comments, and shares.
- Audience Growth: This metric denotes the number of social media community members viz. Facebook page likes, Twitter followers, etc.
- Social Media Traffic: This metric is the traffic to your website generated through the company’s social media accounts.
Email is still one of the most important channels to acquire new customers and retain existing ones. These five metrics will help you analyze your email marketing more effectively:
- Delivery Rate: This is arguably the most important metric when it comes to emails. It is the percentage of recipients who received your email.
- Open Rate: Open rate is the percentage of recipients who opened your email.
- Click-Through Rate (CTR): CTR is the percentage of users who clicked on at least one link included in the body of the email.
- Conversion Rate: Conversion rate is the number of recipients who completed a conversion after clicking on a link within the email body.
- Unsubscribes: This metric calculates how many users chose to opt-out of your email list.
Section III: Conclusion
How to Get Started with Marketing Analytics?
“If there’s one takeaway it’s just that it’s okay to do small wins. Small wins are good, they will compound. If you’re doing it right the end result will be massive.”
~ Kevin Li, Former Head of Yahoo Growth (Source)
It is not simply about extracting data from the analytics tool, you also need to establish a process of inference that will help you in making decisions.
If you are looking to get started in the field of marketing analytics, we recommend staying abreast of the latest news, content and thought leadership on MTA’s BI&CI; Page, Performance & Attribution Page; and Analytics Page.
Also, consider taking the following courses and learning from thought leaders in the industry:
Google Analytics for Beginners by Google Analytics Academy: This course is perfect to get acquainted with Google Analytics. Taught by Justin Cutroni and Krista Seiden, this course will educate you about the fundamentals of Google Analytics, and help you understand basic reports and set up dashboards. As you get a better understanding of the platform, you can pursue the more advanced courses as well.
Marketing Analytics by Coursera: Offered by the University of Virginia and taught by Rajkumar Venkatesan, this course focuses on the role of analytics, measuring customer lifetime value and explains the basics of regression.
- Learning Web Analytics by Lynda: Matt Bailey is the instructor for this course, and he gives an excellent primer on the topic. The course runs for only over an hour. So, you can get started with this course as soon as you finish reading this guide. LinkedIn Premium users can readily access Lynda courses.
Thought Leaders to Follow
- Avinash Kaushik: Avinash Kaushik is a digital marketing evangelist at Google and has authored two books on the topic of web analytics. You can follow his blog Occam’s Razor to learn more about web and marketing analytics.
- Rand Fishkin: Rand Fishkin has been one of the most sought-after thought leaders in the marketing industry. His insights into tech, marketing and startups are illuminating. You can read his blog here.
Also Read: 2019 Marketing Trends Will Be All About Data, Conversations, and Breaking Down Silos
Getting started with marketing analytics can be daunting, especially if you are a beginner. The recommended path is to start with the Google Analytics for Beginners course by Google Analytics Academy and start experimenting with the techniques you learn on your blog.
We also encourage you to follow the marketing analytics section on MarTech Advisor, among other resources.
Talk to us on Twitter or LinkedIn or Facebook. Feel free to ask if you have any questions. We’ll be sure to answer!