A Digital Analytics Compass to Give Your Strategy Direction

Digital analytics change on an almost daily basis as platforms begin collecting new metrics or change those displayed on their platforms. As an example, Google Analytics recently updated to GA4, which is significantly different from the prior version of this software. Thus, this article from 2016 has been substantially revised and updated to provide value to my readers. Enjoy!

Unchanged from 2016, here’s the reality of digital analytics today:

1. Brands don’t measure
2. If they do measure, they don’t measure the right things
3. Brands only measure the bottom of the funnel actions, conversion
4. If brands do collect metrics, they don’t do it on a consistent basis
5. Brands give up on digital analytics too fast because they become confused and frustrated

Let’s go over each of these five failures and how to fix them because building a better understanding of how your business is doing allows you to make data-driven decisions that result in higher returns. So, buckle up, Buttercup.

Digital analytics optimization

Optimizing performance requires brands to take a data-driven approach to decision-making. And that means collecting the right metrics on a consistent basis, developing insights from the data, and making decisions based on these insights.

Brands don’t measure

I frequently hear from small business owners that they don’t feel digital marketing works for their brand.. When I ask what their analytics look like, they have NO clue. Spray and pray may have been the only option available in the pre-digital age, when traditional advertising didn’t have much to offer in the way of hard data, except in the direct marketing realm, which is where I come from. That isn’t true in the digital world.

Metrics are a consistent problem for marketers. Either they don’t measure the effects of marketing strategies, or the things they measure don’t impact marketing goals. Let’s address each problem separately.

Why don’t brands measure the impact of their marketing strategies, whether digital or traditional? Part of it is historic. Marketing, except for marketing research, doesn’t have a tradition of analytics. One reality I faced in my long career as a marketing professor is that students chose marketing for the simple fact that it DIDN’T involve numbers. However, over the course of my career, this changed as metrics became more robust and CEOs demanded that marketing departments justify their expenses by demonstrating positive returns from their efforts.

Perhaps it’s a result of marketing’s separation from economics over 75 years ago, as marketers felt economics was too devoid of behavioral understandings that underpinned consumer choice. Maybe it’s a function of marketing’s reliance on psychology to understand consumer behavior. Perhaps it’s just a function of training, which persists at most universities.

Whatever the reason, marketing suffers from its lack of hard-core metrics and focus on analyzing ROI. C-suite decision-makers want hard numbers to justify expenses and, without those metrics, marketers can’t argue effectively for their strategies or their budgets. Moreover, without effective marketing metrics, marketers can’t tell what works from what doesn’t. Their own strategies might not be the right ones or might not optimize market performance.

Anyone who has been around for a while knows the squishy metrics used by traditional marketing to support strategy — increased awareness and improved sentiment. The assumption was that these metrics translated into ROI, but the connection was always tenuous, and may have been absent altogether.

The exception is direct marketing. Because its materials were tangible, we KNEW how many folks bought based on a specific campaign and we could do effective A/B testing to determine which offer outperformed others.

And, we need that level of analytics in today’s marketing. Digital analytics should optimize market returns.

Brands don’t measure the right things

If I had a nickel for every client who focuses on vanity metrics as their only digital analytics, I could retire.

Sure, vanity metrics such as #Fans, #Followers, #Visits, etc, have meaning, but their relationship to your bottom line is tenuous, at best. You really need to monitor metrics tied to smart goals.

The first step in improving your digital analytics is to establish goals for your digital marketing, encompassing the entire funnel, not just conversion (see below). Next, determine KPIs (key performance indicators) related to your goals. Here’s a list specific to social media I’ve compiled as a starting point for assessing your digital analytics.

Next, determine which digital analytics tools meet your needs in terms of both delivering accurate KPIs and fitting your budget. I have a list of digital analytics tools that’s pretty comprehensive, as folks keep adding to it. Feel free to add your own favorite digital analytics tools or vote up the ones that are there so the list becomes more valuable over time. Some of these tools are fairly expensive, while others may lack one or more of the KPIs you need to monitor.

I’m a big fan of dashboards and your preferred digital analytics tools might not bring everything together, especially if you’re using several different tools. I like IBM Cognos for bringing metrics into one place to help you visualize trends (which are much more important than isolated point metrics). Data visualization tools like Tableau are essential as an aid to developing insights from your data, as the human mind can see relationships and patterns in pictures much more easily than in columns of numbers.

Brands only measure the bottom of the funnel behaviors

Sure, the bottom of the funnel shown in the image shared earlier is where the cash register rings, but ignoring the top of the funnel means you’re not building toward conversion. To effectively move people through the conversion funnel, you need to optimize performance in getting them into the funnel and reduce the number who leak out of it. You also want to drive customers beyond the funnel by encouraging repeat purchases and increasing the average order size.

Thus, you need metrics focused on each element in the funnel.

With Google Analytics, you can even map your content to the appropriate stage in the conversion funnel (see the image above), then assess performance using Google’s funnel option. It’s a relatively simple process of identifying various paths that lead visitors through your website to conversion, whether that be subscribing, downloading your white paper, accessing store locations, or completing a sale. You can get detailed instructions on setting up a funnel in Google Analytics here.

The GA4 update brings in data from Google Ads, as well as the Google Play Store, to enhance your insights with cross-platform data.

Brands don’t measure on a consistent basis

I review my digital analytics daily and generate a more granular report every week for myself and my clients. That works well when you have a couple of thousand visitors a day. Once you get thousands of visitors an hour, you need real-time analytics to monitor performance and make changes on the fly.

Remember, there’s a cost/ benefit tradeoff when it comes to any analytics, including digital analytics. You only measure as often as necessary to optimize market performance. Measuring more frequently doesn’t improve performance relative to the cost involved, while measuring less frequently means you’re not optimizing returns.

Brands give up on digital marketing too fast

Marketers seem to expect massive ROI from digital marketing immediately. But marketing doesn’t work like that. As a new brand or one that lacks a significant digital presence, you’ll need to focus on building platforms and starting to drive prospects down the conversion funnel. That requires time and considerable effort. Even if you implement multiple digital marketing elements, including SEO (search engine optimization), digital advertising, social media marketing, and email marketing, you can expect it to take between 3 and 6 months of intense work before you’ll see any appreciable improvement in your performance. Expect it to take even longer if your efforts are not effective and sustained across these different digital marketing tactics.

Digital marketing works like a bucket. You pour effort into it, and only when your efforts rise to the top of the bucket will ROI begin to flow from the overfilled bucket. Obviously, the more efficiently you fill the bucket, the quicker you start seeing market returns. That’s where digital analytics comes in.

Digital analytics monitor how your target market responds to your marketing efforts and guides you toward optimizing efficiency. Tools like A/B testing help you quickly assess the performance of your digital marketing efforts. Once you see what resonates, you simply do more of it. As your bucket fills, you’ll see market returns.

The bucket analogy suggests that we need to focus on metrics that reflect how content resonates with our target market, generating engagement and building a strong social network.

The digital analytics compass

The digital analytics compass, also known as a social media analytics compass, comes to us from Razor Spire (BTW, check out their other great content).

Let’s start at the top and work our way around the compass clockwise:

**Remember to measure these elements periodically. Once is never enough because digital marketing changes over time and what works today might not work tomorrow.

Audience

Indeed, the more you pour into the funnel, the more conversions occur, so audience size does matter. Audience composition matters even more because it doesn’t help to reach folks who aren’t part of your target audience (persona) because they’ll likely never convert. Google Analytics doesn’t just measure visitors; it also helps you understand who visits your website by including Demographics, Interests, and Cohort Analytics. You first need to enable these features from the admin panel, as they’re not part of the default analytics provided. By linking your Google Ads account and your Google Play, if appropriate, you get a much clearer picture of the traffic visiting your site, where they come from, what they do on your site, and whether they convert (events and tag manager help with this by setting up goals you want to track).

Twitter (now X) offers a relatively general breakdown of your audience, while other social media platforms offer metrics you can track. However, by setting up social media ads, you gain a more nuanced view of what’s happening on your social platforms. A critical element in connecting with your community is recognizing and building relationships with influencers and advocates. These actors have a huge impact on your market performance. By identifying these actors, you can proactively reach out to increase their actions that support your market performance.

Content Analysis

Content creation and curation are expensive and time-consuming, so you want to ensure you get value from them. Measure:

• What content drives clicks to your website?
• Are different pieces of content more or less effective in attracting specific segments of your target market?
• What types of content or pieces of content generate the most engagement?
• What content drives other actions, such as subscriptions or downloads?
• Are there patterns among pieces of content that perform well? Poorly?
• Are you responding appropriately to your community? If not, how can you improve this?
• How does content sharing help build your community?

Competitive analysis

Identify competitors and understand what they’re doing. You might even investigate what other companies that serve the same target market are doing. There are two parts to understanding how competitors approach digital analytics.

First, see what works for them and what doesn’t. This saves you from making many of the same mistakes they do. Next, identify elements missing from their digital strategy — these represent a huge opportunity for your brand. Finally, don’t copy what they’re doing. Find your own unique path to engaging with the same digital audience or segmenting the audience to customize your approach for each segment. In a head-to-head competition, there are winners and losers. When using a unique strategy, each can come out as a winner by building on their strengths.

Sentiment analysis

Often, marketers define sentiment analysis pretty broadly as positive or negative. That’s unfortunate because sentiment analysis is much more nuanced, including all attitudes related to your brand. In addition, you should look at:

• Suitability of your brand — this is probably the single biggest factor in determining buying intentions
• The value offered by your brand
• Responsiveness to customer queries/ complaints
• Recommendations
• Usage rates and occasions — you want customers to buy more frequently
• Loyalty

Additionally, digital marketing provides opportunities to identify unmet needs, which may suggest new product offerings.

A couple of caveats seem prudent at this point.

First, analyzing social media from others has dangers; the most serious being that vocal users often aren’t representative of the group and, in fact, are often statistically different from less vocal users.

Second, unless you’re a relatively small brand, you’ll find you have too much data to effectively analyze without a text analytics tool. Unfortunately, these tools suffer a myriad of problems, ranging from long training requirements to poor performance. They do especially poorly with slang and other languages you’ll find common in social media.

My recommendation is to utilize the tools (my particular favorite is HyperResearch, as it enables hypothesis testing), followed by a manual analysis of a random subset of texts.

Final thoughts on digital analytics

I hope you find this article helpful. If you have specific questions or have a topic you’d like me to cover, please ask in the comments below.

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