An Insider’s Guide to Digital Marketing Analytics

This post on digital marketing analytics was originally written in early 2015. In digital marketing terms, that’s a lifetime ago. Some elements have changed significantly since the original post, such as the deprecation of 3rd party cookies and Universal Analytics in favor of GA4; other things are still the same, including the scarcity of firms doing a great job of analyzing digital data and the huge gap in trained talent to develop insights from this data. Thus, this post contains elements from the original post that were updated to the current state of data analytics.

Forbes proclaimed 2014 the Year of Digital Marketing Analytics, summing up the problem this way:

If most digital marketing programs or campaigns have a weak area, it’s analytics. One recent study identified that the biggest talent and hiring gap in online marketing is in the analytics space. 37% of companies surveyed said that they desperately needed staff with serious data chops.

According to LinkedIn, the situation has gotten worse rather than better since then. Currently, they estimate a talent gap in the hard skills needed for digital marketing, like analytics, is 51%.

If you look at the image above, courtesy of Avinash Kaushik on Occam’s Razor, you’ll see a similar emphasis on “Big brains,” and there just aren’t enough of them to go around.

The state of digital marketing analytics today

Well, in 2024, we still find too few analysts trained in digital marketing analytics, especially when it comes to more advanced analytics. What passes for digital marketing analytics is also pretty dismal, amounting to little more than rudimentary vanity metrics, such as follower counts and website visits.

If you look at interest in digital marketing analytics over time, you find the term first appeared in searches in 2011, but searches exploded in 2013. Based on the graph above from Google Trends, Google forecasts continued steep growth in searches for digital marketing analytics. I have no idea why there was a severe dip in the trend line in May of this year, but it rebounded quickly, as you can see in the trend line.

So, what do these searches turn up?

There are a ton of tools, many of which aren’t really analytics tools but automation tools with a bit of tracking. For instance, I love SproutSocial for helping share and curate content, but it’s not really an analytics tool. Here’s what you get (data from 2015 to protect my firm):

I ask you, how does this data help manage your digital marketing? What insights does it provide?

Not much!

The same goes for many “analytics” tools provided by social networks, which are pitifully anemic. There are a couple of caveats here, however. Google Analytics and Facebook Ads Manager provide beneficial, insightful data to help optimize your digital marketing results. I’ve provided detailed directions for setting up and interpreting data from Google Analytics and Facebook’s Ads Manager.

What do you need to rock digital marketing analytics?

Surprisingly, the first step is to gain an appreciation of analytics. Many small and mid-sized companies don’t appreciate how critical digital marketing analytics are for their success. Even some large businesses don’t really get the importance of digital marketing analytics and focus too much on late-funnel assessments rather than top-of-funnel assessments.

While I no longer subscribe to the traditional notion of the linear customer journey, I prefer the one I created that’s cyclical (see below), and converting consumers into customers is a process. It’s insane to think that consumers will buy a product they don’t even know about. Even after they become aware of the product, you must still convince them it does the best job when it comes to solving their problems (and consumers buy solutions, not products). This involves convincing them that the entire package offered by your products provides substantial benefits over your competition. The old adage that says, “If you build a better mousetrap, the world will beat a path to your door,” is simply hogwash. You must still carefully and efficiently move prospective buyers through the entire process in order to convince them to make a purchase. Also, as noted in the cyclical version of the customer journey, you can’t stop with converting customers. You must get them to become repeat buyers, develop loyalty to your products, and share their endorsement of your brand with other consumers.

Recognize that digital marketing analytics requires a budget for software (which can be fairly pricy) and trained analysts (and the shortage of them means you can expect to pay about $70K plus benefits/ year, although that varies a lot by geographic region). Too many businesses try to go cheap here with the notion that money is better spent on other activities. And, in the short run, that might be true. Unfortunately, what you’re not seeing in this cost strategy is the opportunity cost of sales you didn’t make because your efforts weren’t optimized. I call this a penny-wise and pound-foolish strategy because you’re saving a little money upfront to lose a lot of money on the back end.

KPIs and ratios

Next, you need to build KPIs (Key Performance Indicators) and metrics that match your mission and strategy, focusing on both top-of-funnel (consumer sentiment, reach, engagement) and bottom-of-funnel (ROI, conversion, etc.) strategies. This is why you need marketers schooled in digital marketing analytics—they understand marketing KPIs.

Among the KPIs you might consider monitoring are:

• Conversion rate
• Cost per lead
• Customer lifetime value, in other words, the worth of a customer’s purchases over the length of time they remain a customer
• Email click-through rate
• Bounce rate is the percentage of visits that involve viewing a single page on your website
• ROI (return on investment) or ROAS (the return on advertising spend)
• cost per click
• website traffic
• Social media engagement; follower counts are simply vanity metrics
• Backlinks
• Average position in related searches
• Search engine traffic, as well as traffic from other sources
• Customer acquisition costs
• and many more

Set realistic priorities because you can’t focus on every possible KPI at the same time. I recommend selecting a balance between the KPIs at the top, middle, and bottom of the funnel that have the most significant impact on market performance. Don’t waste time measuring metrics that don’t contribute to your bottom line in any way. We call these vanity metrics, which include metrics such as follower counts. See below to evaluate whether a metric is a KPI or not.

While point data is interesting when it comes to assessing these metrics, trend data provides more insights. One of the advances in GA4, the newest tool from Google for assessing website performance, is the integration of events and reports, which allows you to set customized metrics to monitor and create interactive reports that you can manipulate to produce insights into the performance of demographic groups, regions, product lines, etc. You can also quickly compare performance over various periods, such as compared to last month or comparing performance for a month this year versus the same month the previous year.

Setting goals for these KPIs allows you to develop more meaningful insights, like ratios of expected versus actual. Large ratios demand investigation (and maybe testing to figure out why the ratio was considerable), while small ratios indicate that you met expectations.

Level of analysis

Also, think about the level of analysis issues — you want both overviews of how well your strategy is working and insights into segments, such as different social platform performance, the performance of various types of content, etc. As an analyst, think about what other users need in terms of the level of analysis. For instance, the VP of marketing needs an overview, but she might want to dive deep into why some KPIs had high (or low) ratios. Meanwhile, your brand managers want to understand the performance of their products and community managers may need to monitor the performance of individual pieces of content. These elements fit within Kaushik’s notion of dimensions that cover the performance of particular keywords, campaigns, posts, referring sites, countries, types of visitors, etc.

Data visualization

Visualizing data is critical for easing interpretation. In his TED talk, David McCandless said this about the importance of data visualization:

By visualizing information, we turn it into a landscape that you can explore with your eyes, a sort of information map. And when you’re lost in information, an information map is kind of useful.

Data visualization not only acts as a shortcut for interpreting data; the human eye sees pictures a whole lot better than numbers. Thus, appropriate visualizations allow managers to identify problems quickly so they can fix them before they become crises.

In the graphic above, we have an interactive map of the US budget. Analysts can manipulate spending on various categories, such as education, to view what changes might be made in the budget for other categories. Viewing this visualization provides a wealth of information without creating mental overload.

For instance, P&G monitors deliveries using GPS installed in its fleet of trucks using colored digital blocks — each block representing the value of the customer to P&G, and the color representing expected delivery (green for on time, yellow for possible delays, and red for likely delays). When a truck runs into problems (traffic, weather, etc.) that threaten delay to a major customer (like Walmart), managers can quickly send replacement shipments from a local distribution center or re-direct shipments from less critical customers or shipments with sufficient lead time to reduce the possibility of disappointing Walmart with a late delivery.

Translating digital marketing analytics into action

Unfortunately, many firms find their digital marketing analytics programs falling down at this critical step — translating insights into action. In this article, Google quotes poet Andrew Lang, who eloquently said:

He uses statistics as a drunken man uses lampposts—for support rather than illumination

Translating insights into action often means going back to manipulate your data for more nuanced insights;

• Look for relationships among your data. For instance, you might uncover a relationship between top-performing posts and specific keywords used or publication timing. This insight should guide the creation of new content.
• Looking at trends rather than data points – trends often help you identify meaning in your data, such as cyclical trends or when a particular data point stands out from others versus simply representing normal fluctuation. Of course, as we saw with the Google Trends data for digital marketing analytics, it’s hard to distinguish between a meaningful insight in fluctuations and abnormalities or normal fluctuations. If you respond to every blip in your trend data, you’re like a golfer who constantly overshoots the hole by increasing or decreasing their swing.
• Turn data into predictive models—don’t stop with viewing data as isolated points and basing forecasts on simple linear extrapolations. Predictive models use historical data to determine the relationship among a set of factors and desired outcomes (like KPIs). Then, analysts use these algorithms to predict future KPI performance. You can even play “what-if” games to determine the impact on performance of various actions. This helps determine which changes represent the greatest impact on performance.
• Don’t forget that data analysis is part art and part science. Translating insights into action involves a certain amount of playfulness with the data to discover deeper insights.

Conclusion

Digital marketing analytics is a crucial part of your marketing planning process. By analyzing the right metrics using the right tools, you can develop insights that help you optimize your future performance, leading to success. By the same token, poor analysis can lead to decisions that hurt your performance.

Need marketing help to support business growth?

We welcome the opportunity to show you how we can make your marketing SIZZLE with our data-driven, results-oriented marketing strategies.  Sign up for our FREE newsletter, get our FREE guide to creating an awesome website, or contact us for more information on hiring us.

Hausman and Associates, the publisher of MKT Maven, is a full-service marketing agency operating at the intersection of marketing and digital media. Check out our full range of services.