Marketing analytics: Making $ense of it all

“Analytics will define the difference between the losers and winners going forward.”..So stated Tim McGuire, a McKinsey & Co. executive, several years ago as the wave of data-driven hype began to swell in the corporate quest for new revenue opportunities. The market certainly seems to have responded. A recent industry study valued analytics as a service market at US$4.23 billion in 2015, growing to US$23 billion in 2020. 

And with good reason. We’ve all seen the compelling statistics around the growing use of data and analytics. From driving higher profitability and better cross-selling of products and services to creating superior customer experiences and improved marketing ROI. The list goes on and the business case is an attractive one.

However, it’s hard not to feel like this rush to adopt analytics (with particular emphasis on the hardware, software and applications) is all somewhat déjà vu mixed with a sense of the more things change, the more they seem to stay the same.

Flashback to the early 2000s and the billions of dollars spent on Customer Relationship Management (CRM) systems. According to the Gartner Group, 55-80% of these CRM projects didn’t produce results. In fact, in some cases they actually damaged customer relationships. Why? Because they lacked a comprehensive plan for success (namely, how the information in the systems was going to be used) that was understood and supported by the entire organization.

Coming back to the present day, we see this same dynamic unfolding once again: a large investment in analytics technology and data scientists, but very little focus on the organizational transformation required to move to a more data and analytics-driven marketing culture. Instead, there’s an all-too-common practical reality in many organizations – “We’ve bought the technology, so now we’re a data-driven marketing organization.”

This is a dangerous course, one potentially destined for disillusionment and failure.

Data and analytics-driven marketing is much more than hardware and software, and the hiring of a few data scientists. It’s about changing organizational behavior and training marketing departments to become more data-driven and quantitatively aware. It’s about creating centres of excellence around marketing analytics that blend the talents of data analysts, strategists and campaign managers. It’s about enabling and encouraging change around how marketing is done on the basis of the analytics, rather than sticking with the status quo with a veneer of data-driven insight.

Fundamentally, the successful evolution to a data and analytics marketing culture needs to be a transformational process that changes how marketers make decisions. Marketers are in many cases the “last mile” between a company and its customers, making the necessity of being able to easily and consistently tap into analytics-driven insight an imperative. The reality is that today, an enormous gap remains between what could be and what is.

The advances in technology have unquestionably been a boon to the analytics industry, not only in terms of growth and adoption of various platforms and tools but in driving awareness of the revenue potential that lies in the vast amount of data being generated daily. But technology alone will not define success.

Instead, marketing organizations need to force themselves to undergo a cultural shift toward stronger quantitative practices, including focusing on metrics that impact the bottom line, embracing the value of data and practically applying analytics-driven insight as a matter of course. This won’t happen without a comprehensive plan from the top that defines success and is understood and supported by all.