Unit -1 Marketing Analytics Dr Neetu Singh

Introduction

Analytics is the systematic computational analysis of data or statistics.it is the discovery, interpretation
and communication of meaningful patterns in data. It is connection between data and effective decision
making within an organization. Organization may apply analytics to business data to describe, predict,
and improve business performance. Areas within analytics include are Predictive Analytics, Prescriptive
Analytics and Enterprise decision management.

Analytics vs. Analysis

Analysis is focused on understanding the past; what happened and why it happened. Analytics focusses
on why it happened and what will happen in future

Marketing Analytics is the practice of measuring, managing and analyzing marketing performance to
maximize its effectiveness and optimize return on investment (ROI). Marketing analytics comprises the
processes and technologies that enable marketers to evaluate the success of their marketing initiatives.
This is accomplished by measuring performance. Marketing analytics uses important business metrics,
such as ROI, marketing attribution and overall marketing effectiveness. In other words, it tells you how
your marketing programs are really performing.

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 programs also benefit team in other ways:

• See the big picture of marketing trends

• Identify which programs work and why

• Monitor trends for a given period and over time

• Understand the ROI of each program thoroughly

• Forecast results

Advantages of Marketing Analytics

1. Learn What Happened

Marketing analytics can first lend insight into what happened in the past and why. This is instrumental to
marketing teams in order to avoid making the same mistakes. Through descriptive analysis and the use of
customer relationship management and marketing automation platforms, marketing analytics bring to
light not only what happened in the past but also provide answers to questions on specific topics. For
example, we can ask more about why a specific metric performed the way it did, or what impacted the
sales of a specific product.

2. Gauge What’s Happening Now

Marketing analytics can also help you understand what’s currently taking place in regards to your
marketing efforts. This helps determine if you need to pivot or quickly make changes in order to avoid
mistakes or make improvements. Using dashboards to display current engagement in an email track or the
status of new leads are examples of marketing analytics that look to assess the real-time status of
marketing efforts. Usually, these dashboards are created by employing business intelligence practices in
addition to a marketing automation platform.

3. Predict What Might Happen

Some could say the predictive analysis of marketing analytics is the most important aspect of it. Through
predictive modeling’s such as regression analysis, clustering, propensity models and collaborative
filtering, we can start to anticipate consumer behavior. Web analytics tracking that incorporates
probabilities, for example, can be used to foresee when a person may leave a site and when. Marketers
can then utilize this information to execute specific marketing tactics at those moments to retain
customers.
Or perhaps it’s marketing analytics that assesses lead management processes to prioritize leads based on
those similar to customers who have already converted to show who has a higher propensity to buy.
Either way, the goal of marketing analytics for the future will be to move away from a rear-view strategy
to focus on the future. Luckily, the influx of data, machine learning, and improved statistical algorithms
means our ability to accurately predict the likelihood of future outcomes will rise exponentially.

4. Optimize Efforts
This last benefit only comes when you combine your marketing analytics with your market research
objectives—but if you do so you could see the greatest impact. Essentially, it’s about translating
marketing analytics findings into market research objectives. A common mistake marketer make in
conducting marketing analytics is forgetting to gather real customer feedback. This activity is important
to bridge the gap between marketing analytics insights, a marketing strategy, and activation.
We challenge brands to use marketing research as a tool to push their marketing analytics from just
learning about lead generation and sales metrics to actually understand customers in the context of their
marketing opportunities. You’ll also learn how a solution that combines these data types helps you
understand the dynamics of your category, your highest-value target audiences, and the best growth
opportunities your brand has.
 With analytics, you can answer questions like these:

• How are our marketing initiatives performing today? How about in the long run? What can we do
to improve them?

• How do our marketing activities compare with our competitors’? Where are they spending their
time and money? Are they using channels that we aren’t using?

• What should we do next? Are our marketing resources properly allocated? Are we devoting time
and money to the right channels? How should we prioritize our investments for next year?

Disadvantages of Marketing Analytics

The various disadvantages of data analytics are as follows:

• Data analytics can breach customer privacy as information such as online transactions, purchases,
or subscriptions, can be viewed by the parent companies. There are chances that the companies
will exchange these databases for mutual benefits.
• The price of the tools normally depends on the features and applications that they can support.
Moreover, some tools are complex and require proper training.
• The information that is obtained by making use of data analytics can be misused.
• One of the toughest jobs is to select the correct analytics tool.

Market Data Source (Primary & Secondary)

Government agencies, non-profit organizations, and non-governmental organizations often publish freely
available data that may inform marketers’ understanding of consumers, customers, the geographies, and
industry sectors where they operate. Great information sources include the following:

A centralized portal for open data available

from the U.S. government on a wide variety of
Data.gov topics. Helpful for finding government data
that you know exist somewhere, but you aren’t
sure which agency maintains it.

A U.S. government-maintained Web site that

provides access to a wide variety of statistical
data published by the federal government.
FedStats
Also helpful for finding data that you know
exist somewhere, but you aren’t sure which
agency maintains it.

A directory of publicly-available data sources

Google Public Data Directory
from around the world.
 A search tool for exploring search volume for
Google Trends
any term used in a Google search.

Public opinion and research reports from a

non-partisan, American think tank. Freely
Pew Research Center available research covers social issues, public
opinion, and demographic trends shaping the
United States and the world

Data published by the federal government

about economic indicators for the economy as
U.S. Bureau of Economic Analysis
a whole, as well as specific industries and
economic sectors.

Demographic and geographic information

U.S. Census Bureau Data
about the population of the United States.

A collection of data about the U.S. economy,

U.S. Small Business Administration (SBA) General industries, businesses and the general
Business Data and Statistics population, developed with business users in
mind.

A data service of the United Nations that

provides centralized access to a wide variety
of U.N.-maintained data sets such
United Nations UNdata
as demographics, socioeconomic status and
development indicators for nations around the
world.

Economic data and economic development

World Bank Data indicators for 100+ countries around the
world.

Information about international trade and

World Trade Organization (WTO) Data tariffs and the regulatory environment for
100+ WTO member countries.

Syndicated Marketing Research Data

A number of commercial companies provide syndicated marketing research that is well respected and
often well used by organizations that subscribe to their services. A sampling of these services is provided
below:

Acxiom Extensive consumer datasets containing demographic,

 purchasing, credit, and other information companies can map to
their own customer and prospect data for research, marketing
analytics, and marketing campaign execution.

Extensive consumer datasets containing demographic,

purchasing, credit, and other information that companies can
Experian
map to their own consumer and prospect data for research,
marketing analytics, and marketing campaign execution.

Extensive datasets around multimedia audience research and

GfK MRI (formerly MediaMark)
measurement.

The Affluent Survey USA is an annual survey tracking media

Ipsos and consumer spending habits of U.S. households in the top
20% income level.

Point-of-sale data linked to household panel purchasing data,

IRI providing detail around sales, pricing, promotion and market
share for a variety of consumer products.

Audience demographics and media consumption profiles for

Media Audit
100+ media markets in the U.S.

Point-of-sale data linked to household panel purchasing data,

providing detail around sales, pricing, promotion and market
Nielsen share for a variety of consumer products. Datasets to support
popular lifestyle and behavioral segmentation systems such as
PRIZM.

Database of public opinion and polling questions exploring

Roper Center for Public Opinion
many aspects of American life, including contemporary data as
Research
well as polling data dating back to the 1930s.

MONITOR provides long-running syndicated research about

Yankelovich
consumer values, attitudes, and trends.

Other Useful Sources for Marketing Data

These additional sources for other types of marketing information are also warrant attention. Whether or
not marketers use them, they should be aware of these tools and how they can be useful for a variety of
marketing purposes.

Google Detailed analytics, statistics and insights about Web site traffic, usability and sales
Analytics effectiveness. Free and premium services available.
 Searchable source for full-text articles from regional, national and international newspapers,
LexisNexis
government documents, and many legal, medical and business publications.

A subscription-based statistics portal, providing searchable access to many original sources

Statista
of market, industry, and business data.

Primary and Secondary Data. Primary data is information collected through original or first-hand
research. For example, surveys and focus group discussions. On the other hand, secondary data is
information which has been collected in the past by someone else.

The New Realities of Marketing Decision Making Market Sizing: Data Sources

Every business has a market. From businesses like Amazon, whose audience could be anyone, to niche
businesses selling specialized, custom products, knowing your market is essential to establishing a
successful business. Many organizations believe their product is so novel or useful that their market is
everyone, but more often than not, the customer base will actually exclude certain demographics. If your
product is extremely expensive, that means the product is probably only going to be bought by people in a
certain income bracket. If your product can only be used in certain areas (like boats as opposed to cars),
you’ll likely only sell that product regionally. This is why it’s important to understand your target
audience and estimate your market size and type when setting up your business and marketing plans.

Market Size

Market size can be simply defined as “the number of people likely to buy a product or service.” Many
businesses have a rough idea of who their market is or how many individuals it might involve, but it’s
important to accurately estimate market size in order to plan for things like budgets, sales goals,
marketing efforts, and staffing. Knowing how large your market can be directly proportional to your
business efforts. Using smart market size estimation techniques is an important planning step.

How to Evaluate Market Size?

There are several kinds of market sizing techniques that businesses should consider and use in their
market size analysis. The most important step, before considering anything that will help you estimate
your market, is having good data that accurately paints the picture of the marketplace or industry. Having
good data and research is necessary to understanding how to estimate your market size. Before working
with any market size estimation techniques, make sure you have solid information to draw from and
analyze. With good data, you can:

• Look at the competition: Are you the only provider of your business or service locally?
Regionally? Nationally? This will tell you a lot about the potential size of your market. If you have a lot
 of competition, you know you are competing with other businesses for customers, effectively reducing or
limiting your potential market.
• Understand your product: Be realistic about things that will affect who will buy your product.
Things like cost, usefulness, reliability, or availability will influence how many people are truly in your
market.
• Understand your customer: Similar to understanding your product, you must know something
about your customer when doing market size calculation. Are your customers likely to be male? That tells
you something about your market. Are they likely to be college-educated? Found in cities? Make a certain
salary a year? Knowing your target customer always leads to helping you estimate your market size.

Estimating your market size is an important step in establishing and growing your business, including
planning budgets, forecasting goals, and creating marketing plans. In addition to being something
businesses should do as they launch, it should also be reevaluated regularly as your business gains
customers and recognition. Customer market size is never a static thing and can grow, change, and shrink
based on anything from the economy to available technology, so always be mindful of market size for
your business.

Data Sources

Your selected approach will dictate the necessary sources to estimate market size. Secondary research or
desk research searches for existing data and is the most commonly used form of research in this type of
exercise because it is quicker to obtain and therefore usually more cost effective. Through general web
searching, a wealth of information can be found at little or no cost. Subscription-based or syndicated
research is a great place to start, but there are also free sources that contain valuable information. Articles
about companies or products in the target market will often quote data from these sources. You might also
check whitepapers and product announcements for similar information. Publicly held companies are
required to share information in analyst and investor reports. Quarterly and annual reports are typically
available on these company websites as well as through the SEC filings. Also, trade associations will
often conduct market research and aggregate industry data.

Primary research, also called field research, is often used in addition to secondary research. The primary
research can take on many forms and can strengthen your understanding of the market, allowing you to
make better informed assumptions. The most versatile form of primary research is in-depth telephone
interviews that can be used to capture more sensitive information. If possible, on-site visits can be used to
confirm or contradict market sizing estimations or determine key information on market trends, such as
technology, market performance, relative competitive position or other information dealing with
understanding scope and defining the target market.

Stake holders

A stakeholder is a party that has an interest in a company and can either affect or be affected by the
business. The primary stakeholders in a typical corporation are its investors, employees, customers and
suppliers. However, the modern theory of the idea goes beyond this original notion to include additional
stakeholders such as a community, government or trade association.

Stakeholders can be internal or external. Internal stakeholders are people whose interest in a company
comes through a direct relationship, such as employment, ownership or investment. External stakeholders
are those people who do not directly work with a company but are affected in some way by the actions
and outcomes of said business. Suppliers, creditors and public groups are all considered external
stakeholders.

Top Down and Bottom-UP Approaches

Markets are made of buyers. The key question to be solved in your market analyses is for which
customers can we create value and how many of those customers can we serve? When performing a
market analysis, it is important to use both a top-down approach and a bottom-up approach. In the
top-down market analysis you will typically start with an STP analysis (Segment, Target, Position).
Using these insights, in a top-down market forecast you try to estimate the overall size of your market
segment, looking at what might be feasible in terms of market share and customer adoption and doing the
math.One major problem, however, with this top-down approach is that it doesn't tell you anything about
your first 'real' customer and it fails to provide more qualitative insights on how customer really think.

Therefore, you also need a bottom-up market analysis, where you start to identify a first potential
customer and based on the initial feedback, you adapt your products or services in order to develop your
initial customer base. Bottom-up market forecasts look at things in a more micro fashion. What
customers can you actually reach this year, by name? How many customers can you currently keep in
your sales process simultaneously? Can you name the list of prospects that you need to hit for each year
you're forecasting in order to make those numbers real? What are the bottlenecks keeping you from
doubling your sales over the next 12 months? Can they be eliminated such that your sales forecast is
legitimate? These types of forecasts are consistently lower than a typical top-down approach and,
therefore, are much more convincing to investors.

• Top-down usually encompasses a vast universe of macro variables while bottom-up is more
narrowly focused.

• Top-down investing strategies typically focus on exploiting opportunities that follow market
cycles while bottom-up approaches are more fundamental in nature.