Digital marketing is data-driven by nature. Everything about digital marketing can be tracked using analytics tools, which means it is significantly easier to optimize digital marketing activities and produce a higher return on investment (ROI). That higher ROI is what makes digital marketing so attractive compared to conventional marketing instruments like billboards and print ads.
However, bad use of data and analytics can also lead to mistakes in the decision-making process. Incorrectly attributing sales to certain digital marketing activities, for example, can lead to more incorrect targeting and a dropping ROI in general. How can analytics be used to ensure digital marketing success? Here are the 5 tips to get you started.
1. Understand the Funnel
Customers seldom make a purchase decision the first time they see a social media post or an advertisement. It takes a few interactions and engagements for customers to conclude their purchase decision with buying your product or service. This journey – the funnel – is something that needs to be understood.
By understanding and mapping out the funnel, it then becomes easy to understand the metrics to track at each stage. Early in the funnel, you want to focus more on things like impression, reach, and engagement. Further down the line, metrics such as Click-Through Rate (CTR) and Cost per Action (CPA) may be more suitable.
2. Consolidate Multiple Measurements
It is not uncommon for a business to have multiple digital marketing activities running at the same time. What’s important when doing several campaigns – or even working with multiple agencies or digital marketing companies – is that all of these activities are tracked using a consolidated set of metrics and measurements.
When working with a marketing services specialist, for instance, you want to make sure that the metrics and the understanding behind why those metrics are used are the same. Focusing on the same set of metrics allows you to manage multiple activities seamlessly. More importantly, you will be able to move towards the same objective together.
3. Avoid Hyper-attribution
As mentioned earlier, one thing to avoid with digital marketing analysis is hyper-attribution. Hyper-attribution is the act of attributing each end-game metric such as sales or conversion to a specific digital marketing activity or spending. This leads to a skewed view of the efforts themselves, especially in today’s market.
An ad may be the point at which users decide to buy your product or service, but that doesn’t mean it is the only thing needed to make conversion happen. When you start thinking of it that way, you will reduce investment in other digital marketing activities, which will then reduce the effectiveness of the ads themselves.
The danger of hyper-attribution also lies in a failure to understand how different digital marketing instruments serve a specific function. Things like content marketing and SEO are good for generating traffic, but not necessarily for conversion. On the other hand, ads don’t always produce the highest user engagement, even though they may have high CTR.
4. Tie Metrics with Context
The best thing about doing digital marketing analysis today is that you can also gain a lot of understanding from the numbers. They are not just data to eat through, but rather components of a bigger story. Some analytics tools are advanced enough to augment context to their digital marketing reports. A lot of marketing companies do this manually.
Context is equally important in understanding whether your ROI is good. A low ROI that is combined with high customer loyalty and user engagement signals that your digital marketing efforts also help build brand awareness and loyalty, which are valuable assets for long-term growth. High sales during a discount period, on the other hand, shows that your customers are price sensitive.
5. Do the Analysis
That brings us to our last tip: you must do the analysis. Yes, analytics tools are great for processing data and giving you quick insights, but you are the one who needs to understand the market and your customers. At the end of the day, you still have to be the one doing the analysis, reading through findings and data, and gaining that deeper understanding.
A lot of businesses make the mistake of skipping this important step and just trusting whatever insights they receive from analytics tools or marketing companies. When the market – or the customers – change, it is much more difficult to understand that change, let alone to anticipate it. You gain a significant advantage when you do your own analysis.
With these five tips in mind, you can achieve greater digital marketing success through the wise use of analytics. All there is left to do now is using the insights you have gathered not only to understand the market better but also to engage the market more effectively.
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