Phil Phillips, Contributing Editor12.09.16
Last month we covered the basics of analytics and what potentially it could do going forward. This month we wanted to isolate on the topic of its effect and potential as a marketing tool.
McKinsey covered this topic very well in their Harvard Business Review, November 5, 2015 article...QUALIFYING THE IMPACT OF MARKETING ANALYTICS.
It is a fact that marketing analytics is becoming very attractive tool and potentially a “big business.” There is, as McKinsey points out, “a buying frenzy” associated with the “promise of improved precision and performance, advanced analytics and BIG DATA have set off.”
That being said, what are the corporate investments being made in it and what is the current and future impact of those investments?
Currently, the types of uses of analytic marketing activity and their respective use percentages are impressive as can be seen in this chart.
McKinsey reports that of their respective marketing budgets and over the next three years, companies will spend 11.1%, up from 6.7% currently. Additionally, major brands plan to increase their analytics spending by “73% over the next three years”.
According to VentureBeat, in 2015, more than a billion dollars have been invested in data analytics companies and the number of marketing tech companies has doubled to almost 2000 this year alone.
Now we know that a great deal of resources are being placed into this space called ANALYTICS. But what about the impact of all this “frenzy” on key business elements like...
• Marketing Analytics ROI improvement?
• Marketing effectiveness?
Part of the overall problem lies in how one quantifies the impact and, equally important, how does this transform into decisions about investing in and using analytics?
In a CMO (Chief Marketing Technologist) Survey it created a metric that reflected the number of ways companies use marketing analytics in 11 areas. The results showed strong support of marketing analytics use to ROI, thus supporting spending on analytics in the marketing arena.
Considering the table referred to earlier, the facts seem to show there is a great deal of room for improvement. The example given was Customer Acquisition being the highest activity use at 36.6%, represents the only instance where more than one third of companies use analytics.
CONCLUSION: Marketing analytics have major bottom line and ROI impact; however, their use is amazingly limited.
Additionally, the McKinsey article talks to the question . . . “how can companies get more from their investments in marketing analytics?”
Three things must be successfully overcome...
• These generated insights fail to get to the right people . . . the people who can use them.
• Delivering both analysis and insights from the data requires complex series of hand-offs. This leaves ample room for miscommunications.
• Poor articulation of the goals of the use of marketing analytics, a lack of focus on what it takes to get it right, and limited application of learned lessons across the organization.
To avoid these problems, McKinsey recommends...
• Using analytics for just 1-2 new marketing activities at first and,
• Creating a heat map of current capabilities across marketing activities and comparing with industry leaders. CW
Dan Adams, President of the AIM Institutre contributed content to this article.
McKinsey covered this topic very well in their Harvard Business Review, November 5, 2015 article...QUALIFYING THE IMPACT OF MARKETING ANALYTICS.
It is a fact that marketing analytics is becoming very attractive tool and potentially a “big business.” There is, as McKinsey points out, “a buying frenzy” associated with the “promise of improved precision and performance, advanced analytics and BIG DATA have set off.”
That being said, what are the corporate investments being made in it and what is the current and future impact of those investments?
Currently, the types of uses of analytic marketing activity and their respective use percentages are impressive as can be seen in this chart.
McKinsey reports that of their respective marketing budgets and over the next three years, companies will spend 11.1%, up from 6.7% currently. Additionally, major brands plan to increase their analytics spending by “73% over the next three years”.
According to VentureBeat, in 2015, more than a billion dollars have been invested in data analytics companies and the number of marketing tech companies has doubled to almost 2000 this year alone.
Now we know that a great deal of resources are being placed into this space called ANALYTICS. But what about the impact of all this “frenzy” on key business elements like...
• Marketing Analytics ROI improvement?
• Marketing effectiveness?
Part of the overall problem lies in how one quantifies the impact and, equally important, how does this transform into decisions about investing in and using analytics?
In a CMO (Chief Marketing Technologist) Survey it created a metric that reflected the number of ways companies use marketing analytics in 11 areas. The results showed strong support of marketing analytics use to ROI, thus supporting spending on analytics in the marketing arena.
Considering the table referred to earlier, the facts seem to show there is a great deal of room for improvement. The example given was Customer Acquisition being the highest activity use at 36.6%, represents the only instance where more than one third of companies use analytics.
CONCLUSION: Marketing analytics have major bottom line and ROI impact; however, their use is amazingly limited.
Additionally, the McKinsey article talks to the question . . . “how can companies get more from their investments in marketing analytics?”
Three things must be successfully overcome...
• These generated insights fail to get to the right people . . . the people who can use them.
• Delivering both analysis and insights from the data requires complex series of hand-offs. This leaves ample room for miscommunications.
• Poor articulation of the goals of the use of marketing analytics, a lack of focus on what it takes to get it right, and limited application of learned lessons across the organization.
To avoid these problems, McKinsey recommends...
• Using analytics for just 1-2 new marketing activities at first and,
• Creating a heat map of current capabilities across marketing activities and comparing with industry leaders. CW
Dan Adams, President of the AIM Institutre contributed content to this article.
