There was a time when marketing primarily consisted of guesswork and creativity.
While creativity remains integral to all marketing campaigns, guesswork has been eliminated by the availability of big data, much to the marketer’s relief.
Marketers can’t afford to shoot arrows in the dark in the modern competitive business ecosystem. Digital marketing analytics allows modern marketers to make informed marketing decisions and develop strategies based on reliable, accurate data instead of hunches and opinions.
In this article, you’ll find all the information you need to understand and get started with digital marketing analytics.
What is digital marketing analytics?
Digital marketing analytics is the process of collecting, analyzing, and implementing data-driven insights from all your digital marketing channels.
It takes an average of seven interactions before a purchase takes place.
You need to track your business-customer touchpoints to better understand customer journeys. Digital marketing analytics spans all your digital channels and gives you actionable insights from all the platforms your brand has a presence on.
All businesses with some online presence are sitting on a goldmine of data. When used correctly, this data can help stakeholders and marketers differentiate between facts and opinions and make data-driven decisions.
Analyzing digital marketing data helps you gain critical insights into the performance of your marketing strategies. It gives you a complete overview of how your campaigns work across various digital touchpoints.
The core application of digital marketing analytics is to guide business decisions with data-driven insights. This application then trickles down and generates many other use cases, like helping businesses minimize their churn rates, decrease customer acquisition costs, increase customer lifetime value, or simply optimize their marketing budget and overall revenue.
These applications make digital marketing analytics a vital growth and digital transformation element for a whopping 94% of businesses, as per a survey by MicroStrategy.
Types of digital marketing analytics
There are three types of digital marketing analytics. Each type has the same way of action but with a wildly different objective.
Descriptive analytics helps marketers make sense of the data from the past. This type of analytics helps you gain insights into the performance of the marketing campaigns you have already built and set in motion.
This data lets you understand which of your strategies have worked, allowing you to do more of that and understand what doesn’t work. In other words, descriptive analytics highlights your areas of improvement and guides your way forward.
Predictive analytics is exactly like it sounds. It takes historical data and current trends and pairs them with data science techniques to make predictions in any given field.
Machine learning algorithms analyze large volumes of data to make increasingly accurate predictions which can help marketers be proactive in their strategies and decisions.
Prescriptive analytics works in tandem with predictive analytics. While predictive analytics tells you what will happen in the future, prescriptive analytics can generate suggestions about how you can get the most out of that situation.
For example, predictive analytics tells you whether your website will see an increase in traffic during the summer months. Prescriptive analytics can give you ideas on how to capitalize on this increase in traffic and use it in your favor.
Digital marketing analytics vs. web analytics
People often use digital marketing analytics and web analytics interchangeably.
However, the fact is that digital marketing analytics is an umbrella term that covers web analytics and other forms of analytics like social media, advertisement, email marketing, etc.
You know from above that digital marketing analytics spans all areas of your online existence. Web analytics, on the other hand, only tracks, analyzes, and develops insights on the data within your website’s bounds. This data may include web traffic, dwell time, unique visitors, visitor frequency, etc.
Web analytics isn’t enough for a modern business to thrive. You can’t afford to have tunnel vision, focus only on your website and stay in the dark about other digital handles. This is why digital marketing analytics is what businesses should prioritize.
In the next section, you’ll get to understand why.
Importance of digital marketing analytics
Data analytics is considered the most effective way to gain a competitive edge.
Understanding buyers and building targeted campaigns
Tracking analytics is mostly about understanding your customers better so you can build campaigns that they find relevant and relatable to buyer personas.
With digital marketing analytics, you can understand your audience demographics, likes, dislikes, preferences, and buying behavior. This could potentially increase customer engagement by 6x.
You can’t make the cut with a one-size-fits-all customer communication and engagement approach. Digital marketing analytics enables precise customer segmentation, leading to targeted campaign development and a better customer experience.
In the competitive marketing world, complacency is your enemy. No business can grow with a mediocre campaign. You must continuously find and mend your flaws to maintain growth momentum.
Digital marketing analytics highlights your areas of improvement and guides you on the next step toward working on these areas.
It pinpoints the reasons behind any specific customer behavior. And once you know why something has happened, you are better positioned to resolve the underlying issue.
Data-driven decision making
Making decisions is a heavy task. And when stakes are as high as they often are in the marketing world, you can’t afford to rely on hunches and assumptions when making big decisions. Digital marketing analytics empowers you with clean, accurate data that eliminates assumptions and guesswork and helps you make decisions based on pure facts.
Descriptive, predictive, and prescriptive analytics combine to guide marketers on the way forward with insights from previous campaigns, predictions for the future, and dedicated recommendations.
This is perhaps why 76% of businesses relying on data-driven marketing automation campaigns witnessed significantly increased ROI within a year of implementation. And 44% could see growth in less than six months.
A complete overview of online marketing efforts
Marketers feed on data as they make decisions. In this situation, jumping from one platform to another and collecting data and insights to guide the next step is too much work.
Digital marketing analytics platforms consolidate all your data and give you a complete snapshot of how your campaigns perform across various channels. With centralization, there are no silos to hinder your way as you move towards harnessing the potential of data your activities generate.
Metrics to track in digital marketing analytics
A host of metrics can be tracked when getting started with digital marketing analytics. Knowing what some of the most prominent metrics signify and why they are essential to track can help you choose which ones you should track.
As the name suggests, web traffic is a website analytics metric that indicates the total number of website visits in a given time period.
You can gain granular insights by digging deeper and tracking web traffic by channel (which referral channel drives the most traffic) and traffic by device (which device your website gets the most traffic from).
If your goal is to drive web traffic, tracking this metric can indicate your campaign’s success. Additionally, tracking traffic by channel can help you identify which channel drives the most and least traffic so you can adjust your focus accordingly.
Website load speed
Website load speed tells you how long it takes for your website to load entirely once a user has clicked through to it. This is a crucial website performance indicator and an SEO factor indicating if you need to improve your website’s user experience (UX).
The bounce rate represents the percentage of people who landed on your page but backed out before taking any action. This metric is, again, critical for optimizing your website’s UX.
Conversions occur when a website visitor takes a desired action. Regarding a website, the conversion rate represents the number of people that took the desired action against the total number of visits the website got.
When measured as a digital marketing metric, it could represent the number of people your marketing message converted compared to the number of people it reached. This is the ultimate metric to determine how successful your campaign has been.
Top landing pages
A website may have multiple landing pages. Knowing which ones perform better can help optimize and uplift the low-performing ones by determining the elements that make the top landing pages.
So, the top landing page metric simply represents the performance of your landing pages so you know what works well and what doesn’t.
Customer demographics involve age, location, gender, job title, income, and other information about your target audience. This metric can help you understand your prospects better and build targeted campaigns.
Frequency of visitors
Visit frequency represents how many repeat visits your website gets and if a website visitor makes multiple visits to a given web page.
This may help identify if a web page has valuable content. For example, a web page getting a high number of repeat visits means that the web page may have information that interests that particular audience. You can target this audience with similar content for better impact and results.
Social media analytics
Social media analytics is a world of its own. It includes metrics like engagement, reach, likes, shares, audience growth rate, etc. These metrics help you track the performance of your social media marketing efforts.
Email marketing analytics
Email marketing analytics, again, cover many metrics like email open rates, click-through rates (CTR), unsubscribe rates, etc. These analytics help you understand how well your email marketing campaign is performing.
Click-through rate (CTR)
CTR represents the number of people who click on a link vs. those who get exposed to said link. This can determine whether your post or link is reaching the right audience or if the content can be reshaped to be more enticing.
For example, low CTR may indicate that the content either didn’t interest the users or couldn’t entice them enough to click through.
CPC is an advertisement metric that tells you the amount you’ll pay when someone clicks on your ad. This could help you determine your ad spend and optimize it for higher efficiencies.
Cost per acquisition (CPA) and customer lifetime value (CLTV)
CPA is the amount you have spent on acquiring a particular customer. This is an important metric to track to keep your spending in check. CPA is usually most valuable when measured against another metric like CLTV.
CLTV determines how much value the customer brings to your business. CPA is measured against CLTV to determine if the customer is returning the amount spent acquiring them.
Return on investment (ROI)
Who doesn’t track ROI? ROI determines how much return your efforts have generated and if a project is worth pursuing based on its returns. It also helps you identify your profit margins and guides your decisions regarding future plans.
Best practices for digital marketing analytics
Despite knowing how vital digital marketing analytics is, only 30% of businesses leverage true data-driven insights.
Below are some best practices to get you started.
Define a goal
You need to have a goal, an objective in mind that all your efforts will be focused on and that you will measure your success against. Determine what you want to achieve with your marketing efforts. Is it more leads? More sales? More web traffic? This goal will help you determine which metrics to track.
Make sure to set S.M.A.R.T. goals. This means your goal should be smart, measurable, attainable, relevant, and timely.
Choose the right metrics
Many marketers feel overwhelmed with too much information. Avoid this by being careful about the metrics you choose.
You may be tempted to track as many KPIs as possible. However, it is always best to hand-pick and track a few metrics, analyze their numbers, deduce results, and implement your findings before diversifying your metrics portfolio.
Pick a digital marketing analytics platform
There are a host of marketing analytics software out there. Identify the functionalities you need, the existing skillset, and the price you are willing to pay. Then choose a platform that satisfies your selection criteria.
Instead of a fragmented approach, you need a consolidated strategy. Find one tool to collect and analyze data from all your digital platforms and present them in visually pleasing, clean reports.
Implement the results
All the benefits of data analytics you’ve read so far manifest only when marketers can implement their findings appropriately. Don’t just track and measure your results. Implement what you learn to improve your campaigns.
Also, track your metrics daily, but give your campaign a few days for the metrics to kick in before getting disappointed and rehauling the strategies.
Ascertain data security
You handle tons of sensitive data when you get into digital marketing analytics. Therefore, you must keep your tech stack up-to-date with the latest data security standards to prevent data theft.
Proper application guarantees better results
Digital marketing analytics entails collecting and analyzing relevant data and progressively implementing these findings to improve your marketing strategies. Data analytics is the key to staying competitive and digitally transforming your business for future challenges.
You can maximize its results by setting a goal, identifying and tracking relevant metrics, and implementing findings. Finally, don’t forget to ramp up your cybersecurity since you become a likely target of cyber criminals when you handle data.
Learn more about the history, types, and examples of big data to make vital data-driven decisions.