Companies are spending nearly a quarter of their marketing budget, and a significant portion of their IT budget to collect, analyze, and use customer data. By using both data unique to their business and aggregating public data, marketing department are looking for better quality leads, higher conversion rates of those leads to sales contacts, and greater revenue from existing customers.
You use social media to nurture relationships with your customers, which in turn draws more data for storage, processing, and evaluation. In many ways, the past few years have seen the marketing department and the IT department boundaries blur, as data-driven and analytics-driven marketing becomes a reality.
So, how’s that working out for you?
This quote, from Gartner’s 2013 Data-Driven Marketing Survey, underscores the current state of the marketing market: while companies allocate a large amount of their marketing budgets to marketing analytics, organizations are still struggling to mine value from their analytics programs. So this begs the question, why are they struggling?
Interpretation Skills Are Lacking
Perhaps we have the assumption that everyone in this technology-savvy generation naturally understands how to read data, and the access to charts and graphs can give the illusion that data is readily and easily managed. The reality is somewhat different.
Think of big data as the focus group of the 21st century. Where before you hired a team of lab coat-wearing gurus to manage a focus group and deliver results under your guidance, now you have a computer. It feels kind of lonely, doesn’t it?
The mindset for analytical interpretation is not necessarily at odds with marketing – don’t ever believe that “I’m from Mars, you’re from Venus” garbage. Just like visual marketing and web useability are challenging, trained skills, so is data analysis. It takes time to get good at it – and having a good tool makes you a data scientist as much as having Photoshop makes you a graphics designer.
Hire talent with the skill, or hire a firm with the skill, and manage the process. I strongly encourage you to integrate an analytics mindset into your marketing culture. (To see why, take a look at these articles on Harrah’s and Caesar’s Entertainment, and envy how well they know their customers!)
Fragmented Analytic Platforms
“A typical analytic tool inventory includes multiple cloud-based tools for Web, social, search engine marketing, advertising and email marketing,” the report said. “Only a small fraction of the organizations have stepped up to the challenge of integrating the analytics process and tools to get the big picture.”
Not only is it difficult for the average marketer to analyze data, but the data sources are fragmented. The analytic platforms out there that can easily show how different streams of data interact with each other are few and far between. For marketers, this term is often referred to as “closed-loop marketing”.
That gets even more exciting when you look at data outside your organization’s data model – the realm of big data.
(Source – Gartner, Inc.)
All-in-one marketing software such as Oracle Marketing or Marketo or Hubspot enable marketers to connect data streams from multiple sources and analyze the effect each data stream is having on business goals. We’ve seen a huge increase in companies using all-in-one marketing software in the past 3 years. I suspect we will see even more companies adapt in the coming years.
Gartner Inc. found that companies are spending and average of 21 per cent of their marketing budgets on analytics. I propose we need to build the organization (and the structure) to best develop comprehension of the data.