UNIT V INTRODUCTION TO APPLICATION TO ANALYTICS
THE FUTURE OF MARKETING IS BUSINESS ANALYTICS
What is Business Analytics?
Business Analytics is a process that helps using historical data to gain new insights and make
smarter decisions for the business. It is a way to bring innovations and use industry best
practices to meet the business’s goals. Nowadays, organizations are using Business Analytics
for marketing practices for leveraging competitive advantage and bringing growth to the
business.
Importance and Use of Business Analytics in marketing
The importance of business analytics in marketing can be understood by a Forrester study. In
this study, it was found that 44% of B2C marketers use big data and analytics to improve
responsiveness to 36%. For marketing professionals, it means more opportunities for growth,
highly targeted campaigns, eliminating pain points, etc.
Business Analytics has been able to bring a desirable change in the marketing and sales
department of the organizations. There are not one but several benefits of using Business
analytics in marketing. In this blog, we will go through the changes that empowered the
marketing functions of the businesses over time. The points given below shows how business
analytics can be used in marketing:
1. Efficient Use of Marketing Spends
According to a survey by McKinsey and Company, 15-20% of a company’s marketing spend
can be freed up with an integrated analytics approach. Advanced analytical approaches such
as marketing mix modeling can determine spend effectiveness per channel.
As an approach, it can also statistically link marketing investments to drivers of sales,
including external factors like promotional and competitor tasks. It can also effectively
highlight the differences between online, offline, and social media interactions. Statistical
modeling, regression techniques, and algorithms can help accurately determine the online
touchpoint that led to conversion instead of the traditional last/first click methods. McKinsey
estimated reinvesting as much as $200 billion worldwide to other areas by optimizing
marketing spends with analytics.
There are signs that let you know that your marketing budgets are not appropriately
optimized. These signs include inefficient advertising campaigns, budgets drained on PPC,
the cost to the wrong channels, and many more. Business Analytics gets your expenses into
control by finding out exactly what you are spending much and calculating the return on ad
spend (ROAS) for each campaign.
2. Analyze audience segments, and other data
Deep data analysis with the help of Business Analytics helps in getting hidden insights. The
marketing professionals can collect all the data and secure it in one place to merge the data.
They also perform Segmentation with the data using cohort analysis and funnel-based
Segmentation.
In addition to this, marketers can check the efficiency of the keywords and landing pages
based on customer behavior and information. Find the keywords or landing pages that result
in the decrease of ROAS and the reasons. This way, find out the most efficient models that
improve the advertising campaign management and drop the ones that do not work anymore.
As per a survey conducted on a US insurance company, big data has increased its marketing
productivity by more than 15 percent every year. The company further reported that with the
help of Analytics, they could make better business decisions and keep efficient market spend.
You can also make better business decisions and keep a optimal market spend with the help
of these free insurance analytics courses.
Also Read: Step by Step Guide to Becoming a Data Analyst
3. Measuring Marketing ROI Confidently
Marketing has always been an expense center for the company, but now, companies can
predict the ROI of all marketing activities. Even if yours is not a data-driven company like
Google or Amazon, with better predictive and optimizing abilities, more ROI can be
generated in the marketing space.
Personalizing customer experience has been a top priority for all marketing teams across
companies offering services or products. Using analytics to do that is a sure-shot way of
bringing down the acquisition cost while maintaining a relationship with them with consistent
engagement across channels. Customer Value Analytics (CVA) based on Big Data
Analytics provides Omnichannel customer experiences across channels.
Learning online marketing analytics will help you understand how to use data to improve
your marketing campaigns and ROI.
4. Understanding Customer Behaviour
Targeting the right customer and reaching them at the right time with the right message is key
to making sound marketing decisions. Analytics has enabled marketers to analyze customer
behavior and buying patterns, predict their purchases, personalize their experience, better
understand their future needs, optimize pricing for higher sales, etc. In addition, big data
analytics is enabling businesses to provide a consistent customer experience across all
channels instead of focusing on the top few.
5. Enhancing Customer Experience
Personalized targeting through analysis is helping marketers cut acquisition costs while still
maintaining a relationship with the customer. Research shows that personalization can deliver
five to eight times the ROI on marketing spend and lift sales 10 percent or more. With the
effective use of analytics, marketers can plan highly targeted campaigns making offers more
personalized. What seems like a natural progression to customers is actually analytics in the
background.
The biggest example is how e-commerce websites show customers related products and make
suggestions based on customer personas that they build based on their interests and history.
6. Reinventing Content Marketing
58 percent of survey respondents (Spencer Stuart survey of 171 US-based marketing
executives) revealed it is the areas of digital marketing — search engine optimization (SEO)
and marketing, email marketing, and mobile, where big data is having the largest impact on
their marketing programs today.
Analytics is helping content marketers create content according to their target audience’s
interests, socioeconomic profiles, and other factors. Analyzing content primarily helps bring
more traffic to a website that can turn it into a lead generation engine and subsequent higher
conversions. Brand awareness and recall is another significant area where content marketers
are leveraging analytics.
7. Data Analytics and E-Commerce
Data Analytics definitely improves marketing and gives a tremendous boost to how
customers shop online. It helps determine the devices used by the customers in online
shopping, time spent on these devices, and the customers’ positive experiences.
Data Analytics also helps in deriving insights on how consumers use social media to interact
with the business. E.g., a brand might discover that many users are interacting through
Facebook while the other company might find out that more traffic is generated through
YouTube.
It also aids in knowing the products that are more popular on specific social media networks.
THE GOLDEN AGE OF MARKETING
There's been a shift in how companies operate, interact with consumers, and design
internal roles. If you've been paying attention, you may have heard buzzwords like
"data-driven" and "customer insights" being thrown around. You might also have
heard colleagues ask questions about quantifying, tracking, or syncing data about
customer and employee behavior.
And you've probably noticed changes in many job scopes, as more deal with
interfaces that collect, store, and interpret information. This all points to the idea that
organizations have entered the golden age of data. Exchanging information via
technology is no longer an afterthought. It's ingrained into how businesses,
governments, and everyday citizens operate and live. Here is why some believe the
world is experiencing data's peak.
The Emergence of Big Data Tools
While many organizations collect and work with large amounts of data, they're not
necessarily good at optimizing it. The C-suite might be looking at customer
acquisition and churn numbers to decide whether a market expansion is fiscally
possible. Meanwhile, the marketing department is analyzing surveys and focus group
responses from the same area. And sales representatives responsible for the territory
are evaluating the number of leads versus actual conversions.
Different sources and types of information might lead each team to distinct
conclusions about the same market. Without data tools and infrastructure that bring all
sources of information together, these teams' conclusions could be incorrect. There
might be disparate grains of truth in the findings, but it takes synchronization and
optimization to see the big picture.
Organizations that use data observability tools are better able to understand the
complexities that come from large amounts of information. You might think you're
making a sound business decision based on data. But if you have data quality issues,
you won't get the results you were hoping for.
An increased focus on building solutions that manage and optimize data from multiple
sources shows that organizations have an immediate need for these capabilities.
Employees must have a way to wrap their heads around the uptick in information.
Data observability can help businesses predict, prevent, and even fix problems before
they cause damage to your decisions.
Real-Time Insights Are Becoming More Valuable
Business leaders are used to developing strategies based on historical data. By the
time a market research company or ad agency gathers information, it's far from recent.
It may only be a year old, but the global pandemic revealed just how fast data can
become irrelevant. Predictive models for consumer behavior are no longer working, as
explained in an interview with leading data and analytics innovators.
While forecasting models for demand have been reliable in the past, consumer choices
and behaviors are highly influenced by uncertainty. If people start doubting they'll
have a job next week, they'll automatically tighten their belts. If people start doubting
there will be toilet paper on the store shelves tomorrow, they'll put multiple packages
in their carts today. Even if those fears are pure speculation, volatility in the economy
or sudden changes can lead to skewed behaviors.
Companies and data analysts are rethinking their strategic approaches and information
practices because of what occurred in 2020. They're not just relying on historical data
and predictions based on that information. Businesses are injecting real-time analytics,
often from front-line sources, to make more accurate moves.
Rapid macroeconomic shifts like those that happened at the onset of the pandemic
could lead to instantaneous surges or drops in demand. The restaurant, travel, and
hospitality industries all experienced a near halt. Yet telecom, internet, and
videoconferencing services all saw a massive jump.
It's more critical than ever to adjust to real-time signals and have plans in place for
meeting current customer needs. Businesses that can't understand consumers in the
here and now could get left behind. By the time these companies are done playing
catch-up, consumer demands and environmental factors may have shifted again.
Data Skills Are Part of Everyone's Job Description
While the separation between "thinkers" and "feelers" or "analytical" and "intuitive"
workers still exists, the gap is closing. It's not enough to base conclusions on your gut
or subjective experiences. More roles and job descriptions include interacting with and
relying on information.
Building and running reports, using and interpreting analytics, and designing data
collection methods aren't responsibilities only IT handles. In the past, dealing with
data required specialized knowledge and narrowly defined positions. While some of
these roles are still around, it seems everyone - whether customer-facing employee or
marketing professional - is now using analytics.
Today web-based tools with interfaces that are easy to manipulate and understand are
integrated into everyday tasks. There are programs and dashboards for collecting
surveys and reporting organic and paid website traffic. Graphic designers and
marketing managers can see performance trends and data for digital ad performance.
Retail sales and customer service reps pull up programs that generate a customer
lifetime value score before they offer solutions.
Using these tools, interpreting the data, and acting on it are core skills employees are
expected to develop. More companies also require some experience and familiarity
with specific platforms and data skills from candidates. It's hard to find a job
advertisement without something about data or a preference for experience with
specific tools.
With corporate data volumes increasing by 63% each month, according to a 2020 IDG
survey, specialized roles can't handle everything. It's impractical and inefficient to
expect a few departments or teams to manage that amount of information. Ensuring
data gets used and optimized to an organization's benefit takes cooperation and
support from all functions.
Conclusion
The signs that the world is living in the golden age of data are clear. Information flows
in from innumerable sources, and real-time consumer insights are more valuable than
historical data. Nearly all roles in organizations require baseline data skills and
familiarity with software that produces analytics. This increasingly means data
observability and big data tools that manage and improve gathered information aren't
options - they're necessities.
POWER OF DATA
As iteration and innovation in information technology continue to speed up, people are
increasingly immigrating their daily activities online. Activities such as working from home,
chatting via social media, shopping on e-commerce websites, and ordering food delivered to
the door have become popular. This kind of cyber life digitizes people’s interests and
behaviors and stores them in data in cyberspace. Businesses rely on these data to explore
valuable information and customers’ views to make wise business decisions. They also
realize and emphasize the importance of extracting useful knowledge from those data to
identify and solve business problems. Many of them attribute their success to better decision-
making through the effective use of analytics.
The power of data has been exposed in today’s competitive global business environment. We
all see that data play a vital role in improving business leaders’ decisions and enhancing
business strategies. For example, marketing departments rely on data to determine customer
buying patterns, understand their customers, and support customer service. Business
executives rely on data to identify marketing changes and predict marketing trends; thus, they
can support their marketing strategies. Data are invaluable to businesses, big and small, that
are already harnessing the power of data from a variety of resources in cyberspace.
Capturing the Right Data
Businesses must be able to develop data-driven decision-making capability and
organizational agility to support business operation and performance. With so much data in
cyberspace, identifying and capturing the right data are both important for business leaders
when building quality data models and making wise strategy decisions. Successful business
leaders generally make decisions based on facts that they learn from the data. Therefore,
businesses need to prepare the right data that can match the data analysis tasks and needs of
the business. There is a wide range of data sources, including public/business data sets and
databases, social media, data APIs, and web pages. These data can help businesses gather
what they need and learn about their customers and develop business tactics.
Businesses must have the capability of extracting desired quality data from these sources with
different techniques (e.g., data-mining tools) and converting them into a uniform format.
They can then transform the extracted data, such as clean null/duplicate values, join data from
multiple sources, extract relevant subsets from large datasets, and then load them into
databases or data warehouses for data analysis tasks. This is referred to as ETL (extract,
transform, and load), which is a vital step for data analysis and illustrates how to blend data
from multiple sources and prepare appropriate data for a business data-analysis task. The
more accurate the data are prepared, the more reliable the analysis results businesses will
acquire.
Effective Use of Data Analytics
To maximize the benefits to businesses, it is not good enough just to have the right data.
Effective use of data through data analysis is the next important part for businesses leaders to
make the best decisions and chart the best strategies. As businesses accumulate a large
amount of data, analytics heavily rely on the application of various technologies and
techniques (i.e., tools) such as SQL, Python, and R. Those tools help organizations enhance
their ability to extract useful insight and knowledge from the data and implement them in
business processes and strategies.
This process of making decisions based on data analysis and interpretation is defined as data-
driven decision-making (DDDM). DDDM aims to provide business leaders with reliable
information and knowledge that allows them to have a better understanding of the risk and
return of future business performance. The accuracy of a data-driven decision depends on the
quality of collected data and the methods and tools used for data analysis. With
knowledgeable data analytics professionals, businesses can create and maintain their
competitiveness (e.g., productivity, agility, and innovation).