Maybe your brand should see an analyst
Fewer than one in six marketers use data as the main guide in decisions. Are the rest shooting in the dark, or just drowning in raw information?
About this survey
- The research was conducted in June 2010 among readers of Marketing Week magazine and MarketingWeek.co.uk subscribers.
- 14% of client respondents work for organisations employing 1,001-5,000 people, while 17% work for organisations with fewer than 50 staff.
- Client-side respondents were drawn from all types of organisations: 19% came from the financial sector, 12% from not-for-profit, 12% from technology, 10% from consumer goods and 8% were in retail.
- 69% of client respondents with responsibility for digital marketing were marketing managers. Other respondents included marketing directors (12%) and marketing officers (2%).
- Results have been rounded up or down to the nearest full percentage point. Not all tables add up to 100 as there may be more than one answer given where indicated.
At the moment, business choices in the online environment are not widely supported by data. A surprisingly small percentage – 13% – of marketers use it as the dominant determiner of decisions. In addition, a startling 29% of marketers say fewer than a quarter of their decisions are data-driven. However, with fiercer demands for return on investment coupled with the availability of increasingly sophisticated analytics, this is set to change.
Marketers say data gleaned from all the different channels of digital marketing will soon be seen as having a greater impact on their brand’s online strategy. There is a definite move to embrace the possibilities of analytics, with 56% predicting that more decisions will be supported by data over the next 12 months.
The ability to prove return on investment is at the crux of digital marketing. Although digital is still new for many, measuring and analysing digital activities is increasingly important as a rich resource for brands to boost performance. Slightly more than half of the marketing managers surveyed expected this to become more common over the next 12 months. “Those with the budgets will make greater use of analytics to underpin business decisions,” says one marketing director.
Key findings
- Sales are still the dominant metric for brands assessing the effectiveness of their online brand marketing, with 44.8% measuring it this way.
- 43.5% say they expect an increase in the relative investment in improving the on-site experience versus increasing traffic to the site.
- 28.9% admit that under a quarter of business decisions have historically been supported by data.
- 69.6% of those surveyed say they are currently spending less than 10% of their budget on social media.
- 19.0% of marketers expect an increase in the use of online digital performance metrics to support decisions over the next year.
- 19% spend 20% of their budget on bringing traffic to the site versus 80% on the experience on the site.
Over the next 12 months, investment recommendations made on the basis of analytics will become a must-have for board presentations and a crucial addition to established methods. “Analytics is becoming increasingly integral to business decision-making and other business functions are just beginning to wake up to the value data-driven marketing represents,” says one marketing manager in the automotive sector. “I see further integration of the analytics systems with other data, and outdated traditional business intelligence/data systems having less focus.”
It’s the coins that count
Sales continue to be the dominant metric brands use to assess the effectiveness of their online brand marketing, with 45% measuring it this way. Another 31% determine how well their activities are working by looking at brand uplift and propensity to purchase, while 8% use the Net Promoter Score.
An understanding of which content encourages visitors to click more deeply into a brand’s website and stay engaged is something marketers value increasingly. In the future, more time will be spent understanding what elements of the brand’s site appeal to and attract visitors. Currently, the proportion of marketing investment that goes on bringing traffic to sites versus the proportion spent converting that traffic to sales once on the site varies. So 23% of respondents say four-fifths of the spend goes on traffic versus one-fifth on experience while conversely, 19% spend one-fifth on traffic and four-fifths on experience. The remainder distribute their spend more equally between the two areas.
As the cost of search marketing increases and investing in the on-site experience becomes comparatively less expensive, there is an added drive to improve consumers’ experience once they have accessed a website.
In the context of an economy coming out of recession and widespread budgetary squeezes, there is an increased drive for marketing effectiveness and a growing desire among the marketing community to stop being “data rich and insight poor”. Monitoring returns across all aspects of the digital space, from pay-per-click, search engine optimisation, viral and social, is called for.
Survey respondents are hopeful that analytics can be used to provide sound insight into customers’ worlds. “Too many people I speak to still get excited about hits and clicks and reports of performance indicators such as webpages viewed but they don’t do anything with the insight,” says one respondent.
Making sure that you have the resources and expertise to actually do what you need to with the data is paramount. “A lot of people have so much data they are drowning – a common mistake that leads to inefficiency.”
It is clear there is a demand for analytics to be used for more effective marketing; we are heading for a future of lower spend and more focus.
Viewpoint
Neil Morgan
VP EMEA marketing and channels for the Omniture Business Unit, Adobe Systems Incorporated
At the Omniture Summit last month, we hosted various streams of digital seminars and found that following analytics, conversion was the most popular. This focus on conversion is reflected in the survey, with a big move towards customer experience.
Historically, marketers have spent more on acquiring traffic; that is clearly changing. Because the costs of acquisition have gone up, increasing the conversion rate becomes relatively more cost-effective.
The challenge is finding people who know how to do that, which can be expensive. People are therefore looking for technology that can solve the problem.
It is disappointing that so few people use online digital performance metrics to support decision making. It seems that people are not using data to drive other marketing decisions. But more surprising is the failure to use data to drive online decisions. Data availability should be the whole reason a business is doing digital marketing.
The most obvious reason marketers may be missing out on the data opportunity is that, particularly in large businesses, the data is there but is difficult to extract. Areas such as search marketing or affiliate marketing are likely to have different metrics so it is a challenge to consolidate these and come up with a single model.
Getting to the bottom of how different digital channels are working is the big question in marketing at the moment. The challenge of the fragmented data can be solved with technology and people if you make a concerted effort.
It is encouraging to see that marketers are planning to invest more in digital performance metrics. Unless they do that it will be hard to justify future spend on digital, in particular on new channels.
It is interesting to see how much – and yet how relatively little compared to its influence – is being spent on social media. There is a parallel with how digital was adopted in the first place and how time spent online grew ahead of online marketing budgets. History repeating itself?
People are increasingly happy to throw money at channels such as Facebook but they want to use it intelligently. There is a confidence issue around using data to channel marketing into social media.
By improving the performance of digital spend and taking advantage of new channels, there is still a lot of untapped opportunity in digital marketing.
