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Unit-1 Marketing Analytics (KMBMK05)

Definition of Marketing Analytics

measuring, managing and analyzing the marketing performance. The concept of marketing
analytics facilitates not only to improve the effectiveness but also allows the marketers to take a
successful shot at optimizing the return on investment.

Marketing analytics portrays the customer insights and trends.

Marketing analytics involves the technologies and processes CMOs and marketers use to
evaluate the success and value of their efforts. As such, marketing analytics uses various metrics
to measure the performance of marketing initiatives. Effective marketing analytics gathers data
from all sources and channels and combines it into a single view. Teams then use the analytics to
determine how their marketing initiatives are performing and to identify opportunities for
improvement. It is difficult to determine the effectiveness and return on investment (ROI) of
your marketing campaigns without marketing analytics.

It’s worth mentioning that metrics play a critical role in marketing analytics, but marketing
metrics and marketing analytics are two different things. Marketing metrics refer to the data
points, while analytics put the data in context and show how your marketing efforts translate to
revenue.

Marketing Analytics : Importance

(i) Understanding the customer and market trends is really important in today’s time. Marketing
analytics easily allows understanding of big picture trends that too by focusing on every single
detail.

(ii) With the aid of providing you with a clear picture of the efforts and the returns, it allows you
to easily depict that which programs worked and also depicts the reasons why it failed or even
succeeded.

(iii) The market study is also an important part of the business. Marketing analytics allow
monitoring of trends over time.

(iv) Marketing analytics allows understanding the return on investment by providing a clear
picture of the working and the reports of each programme.

(v) By easily helping to study the market trends, marketing analytics facilitates to proficiently
forecast future results.

Turning to search marketing, keywords also allow understanding what even the mindset of the
customers is. Analytics help you find the keywords that can easily be used to optimize business
processes by –
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Unit-1 Marketing Analytics (KMBMK05)
(i) Customer surveys — One can easily infer the relative priorities of competing interests by the
examination of keyword frequency data

(ii) Industry trends — It becomes really easy to understand and predict trends in customer
behavior

(iii) Product design — It is vital to understand what are the solutions that a customer is looking
for. Keywords can easily facilitate the understanding of what the customer actually wants

The main questions that strike the mind of the marketers after evaluating and understanding the
importance of marketing analytics, is where to start and how to work proficiently with marketing
analytics tools.

With the easy availability of search engines, search engine optimization, paid search marketing it
has become easy to implement the concept of marketing analytics.

There are many Marketing Analytics tools that are available for the marketers to easily use for
their aid. Below are some of the most famous tools that can be effectively used for the concept of
marketing analytics-

Marketing Analytics Best Practices

As marketers come to learn the value of delivering a consistently outstanding customer

experience, marketing analytics has emerged yet again as a must-have because of its role in
transforming the customer journey. Now that marketing platforms are accessible to marketing
teams, including those without analytical or technical backgrounds, they are weaving data and
analytics into their strategies like never before.

To that end, MarTech Today suggests five best practices for utilizing marketing analytics in the
best way possible to transform the customer journey:

Ensure high-quality data – Your analytics rest on your data. That means you need a tool that
mines both structured and unstructured customer data from all possible sources, including
various interactions and touch points.

Get real-time insights – Your marketing analytics solution also needs to deliver real-time
insights to you. You can’t be effective if your information is out-of-date; tracking the right
metrics at the right time is key.

Perfect your dashboard – While it may be tempting to track as many metrics as possible, your
analytics will not be as useful if you do. Rather, define your goals and measure results for the use
cases most important to you.
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Unit-1 Marketing Analytics (KMBMK05)
Choose the right analytics visualization – Marketing teams and stakeholders must be able to
make something of the data if you are to gain meaningful insights from it. The key is to choose
the most appropriate data visualizations so you can find patterns and interpret the data. Thus, you
must choose a marketing analytics solution that allows you to choose or customize your
visualizations instead of using default charts for displaying data.

Use a tool featuring machine learning and AI to predict and prescribe – Marketing must be
real-time and predictive to be effective today. You must be able to make accurate predictions,
analyze the data, and make data-driven decisions to enhance each step of the customer journey.

Applications of Marketing Analytics

MEASURE PERFORMANCE OF MARKETING CAMPAIGNS

The most basic form of marketing analytics is to provide marketers with the tools to understand
what business impact their marketing campaigns have. This task can range from something as
straightforward as providing standard metrics (click-through rate, ROI, etc..) at the campaign
level to an analysis as complex as developing a Market Mix Model to come up with the optimal
marketing strategy to maximize profit.

FIND OPPORTUNITIES IN MARKETING PERFORMANCE

While marketing performance analytics will let you know on the whole how a campaign
performs, it isn’t until someone digs in to many cuts of data to uncover whether there are certain
types of users that respond better to particular marketing treatment - perhaps some campaigns
work better in certain markets or on mobile. Marketing analysts mine and model your data to
uncover nuggets that can be acted on by marketers.

UNDERSTAND YOUR CUSTOMERS

Diving deep into customer demographics and behaviors can help you understand which are more
likely to be successful. This information can then be used by marketers when selecting their
target audiences. Through data mining and statistical modeling, marketing analysts can provide a
rich understanding of your customers and what drives success.

UNDERSTAND YOUR COMPETITION

Market research is often within the domain of marketing analytics and it can help marketers
understand the competition better and adjust their strategy accordingly.

Conclusion
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Unit-1 Marketing Analytics (KMBMK05)
Marketing analytics provides insights that allows a marketing team to work more efficiently and
to have a bigger impact on the business.

Top-Down vs. Bottom-Up Approaches to Data Science

Data projects are generally organized in one of two ways: top-down (that is, starting with the
business question) or bottom-up (starting with the data and working up to insights). But is there a
“right way,” and is one approach better or more effective than the other?

Let's take a look at these approaches one at a time from the perspective of a financial institution
that offers lines of personal credit.

Top-Down

In this approach, you might start with an initial belief that fraudulent transactions are a serious
problem for your company. To test this hypothesis, you'll need some data, so you choose some
representative customer profiles and carefully follow their transactions to be certain which are
fraudulent and which are not.

After collecting sufficient transactional data and enriching it with third-party data (such as
information about the locations where transactions were made, the weather at the time the
transactions were made, holidays, and so on), you can:

Estimate the cost of fraud among these cohorts and then extrapolate to your entire business.

Build a model for predicting whether a transaction is fraudulent, and deploy the model to flag
suspicious transactions for immediate investigation.

Bottom-Up

In this approach, you might start with all of your transactional data and wonder if there are any
interesting relationships in it. After sifting through various groupings, charts, and summary
statistics, you hit upon a compelling geo-temporal map that suggests there is a spike in customer
purchases after 5pm within 10 miles of the customer's billing address. This is information that
retailers would find valuable for marketing purposes.
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Unit-1 Marketing Analytics (KMBMK05)

How the Two Approaches Are Different (Yet Complementary)

The bottom-up approach to data science tends to be unstructured and exploratory. It lets the data
lead to a result, while the top-down method defines a problem to be solved and constructs an
experiment to solve it.

In this sense, the top-down approach is better aligned with the scientific method; however, it can
also be relatively costly to design and carry out a proper experiment. Moreover, you need to have
enough information at the start of the top-down method to set up the data collection so that you
don't miss any important features. On the other hand, while the bottom-up approach makes good
use of the available data, it can also take you on the proverbial fishing trip and you need to take
care that you don't chase spurious results.

Ultimately, neither approach is always best. They are often complementary, with one approach
leading to the other in a cyclical fashion. For example:
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Unit-1 Marketing Analytics (KMBMK05)
Top-down to bottom-up. After formulating the initial belief that fraud is a problem for the
company, you can use the currently available data to perform a sanity check to gain a ballpark
estimate of the scale of the problem and whether the full experiment is necessary.

Bottom-up to top-down. After the exploratory analysis suggests when and where the increase in
customer purchases occurs, you can confirm the finding with a more rigorous top-down analysis.

Both the top-down and bottom-up approache