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What Is Marketing Analytics?

Marketing analytics is the process of tracking and analyzing data from marketing efforts,
often to reach a quantitative goal. Insights gleaned from marketing analytics can enable
organizations to improve their customer experiences, increase the return on investment
(ROI) of marketing efforts, and craft future marketing strategies.

According to a report conducted by PwC, highly data-driven companies are three times
more likely than their less data-driven counterparts to see significant improvements in
decision-making.

Why Is Marketing Analytics Important?

Understanding how to gather, aggregate, and analyze data can enable you to extract
useful insights you can use to make a data-informed impact on your organization.

1. Improve the User Experience

Collecting and analyzing your users’ first-party data can reveal how they feel about their
interactions with your product and website. Whether their feelings are explicitly stated
(for instance, in a survey) or implicit in their behaviors (for instance, leaving the website
shortly after loading the page), having this qualitative and quantitative information can
allow your organization to make changes that address their needs and increase the
potential for leads to become customers.

2. Calculate the Return on Investment of Marketing Efforts

Another important function of marketing analytics is calculating monetary gain that can
be attributed to specific marketing channels or campaigns. To calculate the return on
investment for a specific marketing effort, use the following formula:
 ROI = (Net Profit / Cost of Investment) x 100

For example, say you release a video explaining the benefits of your product that costs
$1,000 to produce. You track how many people navigate to the product page on your
website immediately after watching the video and see that it led to 30 new customers in
a given period. If your product costs $50, and each new lead bought one, you can
attribute $1,500 of revenue to the video. The net profit, in this case, is $500.

Plugging this into the ROI formula looks like this:

ROI = ($500 / $1,000) x 100

ROI = (0.5) x 100

ROI = 50%

Any time ROI is a positive percentage, the marketing effort—in this case, the video—can
be considered profitable. Without data to understand where leads are coming from,
calculating the financial impact of specific efforts wouldn’t be possible. ROI calculations
can determine which marketing efforts drive the most sales and prove projects' value.

3. Plan Future Marketing Strategies

With knowledge of your customers and the ability to track your marketing efforts’ return
on investment, marketing analytics provides an opportunity to create data-driven
strategies for your organization.

By analyzing marketing data, you can discover what’s working, what hasn’t worked, and
how your customers feel about their experiences with your product and website. You
can also get a full picture of the impact that marketing efforts are having on your
company.

With that information, you can plan for the future. What should you do more of to reach
your quantitative goals? Which effort failed to generate new leads and should be
dropped from future plans? Data analytics helps you strategize and answer these kinds
of questions.

Where Does Marketing Data Come From?

First-Party Data

First-party data is collected directly from your users by your organization. It’s considered
the most valuable data type because you receive information about how your audience
behaves, thinks, and feels.

● Website Analytics: Data collected directly from your website (e.g., page views,
time on site, bounce rate, conversion rates).
● CRM Data: Information about your customers and leads stored in your customer
relationship management system (e.g., contact information, purchase history,
interactions).
● Social Media Engagement: Data collected from your social media channels (e.g.,
likes, shares, comments, follower demographics).
● Email Marketing Metrics: Open rates, click-through rates, and unsubscribe rates
from your email campaigns.
● Customer Surveys: Feedback collected directly from your customers through
surveys or questionnaires.

Second-Party Data

Second-party data is data that’s shared by another organization about its customers (or
its first-party data). It can be useful if your audience types are the same or have similar
demographics, if your companies are running a promotion together, or if you have a
partnership.

● Partner Data: Data shared between businesses with a mutual agreement. For
example, a retailer might share customer purchase data with a manufacturer.
● Co-branded Campaign Data: Data collected jointly through a marketing campaign
with another company.
● Data from Affiliate Networks: Performance data shared by affiliates who
promote your products or services.
Third-Party Data

Third-party data is data that’s been collected and rented or sold by organizations that
don’t have a connection to your company or users. Although it’s gathered in large
volumes and can provide information about users similar to yours, third-party data isn’t
the most reliable because it doesn’t come from your customers or a trusted
second-party source.

● Demographic Data: General information about population segments purchased

from data providers (e.g., age, gender, income, location).
● Interest and Behavioral Data: Information about online behaviors and interests
purchased from data aggregators or ad networks.
● Intent Data: Signals that indicate a consumer is actively researching or
considering a purchase in a particular category.
● Market Research Reports: Studies and analyses on industry trends and consumer
preferences purchased from research firms.

Marketing Analytics Tools

1. Web Analytics
Web analytics tools track and analyze website traffic and user behavior. They provide
insights into metrics such as page views, bounce rates, time on site, conversion rates,
and more. These tools help marketers understand how visitors interact with their
website, identify popular content, and optimize their site for better performance and
conversions.

Popular Tools: Google Analytics, Adobe Analytics, Matomo (formerly Piwik), Hotjar

2. Social Media Analytics

Social media analytics tools monitor and analyze social media performance across
various platforms. They track metrics like follower growth, engagement rates, reach,
impressions, clicks, and conversions. These tools help marketers understand their social
media audience, measure the effectiveness of their campaigns, and identify
opportunities for improvement.

Popular Tools: Hootsuite, Sprout Social, Buffer, Brandwatch

3. Email Marketing Analytics

Email marketing analytics tools track the performance of email campaigns. They provide
data on metrics such as open rates, click-through rates, bounce rates, unsubscribes, and
conversions. These tools help marketers understand how their email campaigns are
performing, identify areas for improvement, and personalize their email content for
better engagement and conversions.

Popular Tools: Mailchimp, Constant Contact, Campaign Monitor, HubSpot

4. Advertising Analytics
Advertising analytics tools track the performance of advertising campaigns across
various platforms, including search engines, social media, and display networks. They
provide data on metrics such as impressions, clicks, conversions, cost per click (CPC), and
return on ad spend (ROAS). These tools help marketers understand the effectiveness of
their advertising campaigns, optimize their ad targeting and bidding strategies, and
maximize their advertising ROI.

Popular Tools: Google Ads, Facebook Ads Manager, Adobe Advertising Cloud, Marin
Software

6. Customer Relationship Management (CRM) Analytics

CRM analytics tools analyze customer data stored in a CRM system. They provide
insights into customer behavior, preferences, and interactions across various
touchpoints. These tools help marketers understand their customers better, personalize
their marketing efforts, and improve customer satisfaction and loyalty.

Popular Tools: Salesforce, HubSpot CRM, Microsoft Dynamics 365, Zoho CRM

7. Business Intelligence (BI) Tools

BI tools analyze and visualize data from various sources, including marketing data. They
allow marketers to create custom reports, dashboards, and visualizations to track key
performance indicators (KPIs), identify trends, and gain actionable insights.

Popular Tools: Tableau, Power BI, QlikView, Looker

Article 1: Why Marketing Analytics Hasn’t Lived Up to Its Promise

Article 2: Starting the analytics journey: Where you can find sales growth right now |
McKinsey

Big Data

Big data refers to extremely large and diverse collections of structured, unstructured,
and semi-structured data that continues to grow exponentially over time. These datasets
are so huge and complex in volume, velocity, and variety, that traditional data
management systems cannot store, process, and analyze them.

The amount and availability of data is growing rapidly, spurred on by digital technology
advancements, such as connectivity, mobility, the Internet of Things (IoT), and artificial
intelligence (AI). As data continues to expand and proliferate, new big data tools are
emerging to help companies collect, process, and analyze data at the speed needed to
gain the most value from it.

Big data describes large and diverse datasets that are huge in volume and also rapidly
grow in size over time. Big data is used in machine learning, predictive modeling, and
other advanced analytics to solve business problems and make informed decisions.

The Three “Vs” of Big Data

Volume
The amount of data matters. With big data, you’ll have to process high volumes of
low-density, unstructured data. This can be data of unknown value, such as X (formerly
Twitter) data feeds, clickstreams on a web page or a mobile app, or sensor-enabled
equipment. For some organizations, this might be tens of terabytes of data. For others, it
may be hundreds of petabytes.

Velocity
Velocity is the fast rate at which data is received and (perhaps) acted on. Normally, the
highest velocity of data streams directly into memory versus being written to disk. Some
internet-enabled smart products operate in real time or near real time and will require
real-time evaluation and action.

Variety
Variety refers to the many types of data that are available. Traditional data types were
structured and fit neatly in a relational database. With the rise of big data, data comes in
new unstructured data types. Unstructured and semistructured data types, such as text,
audio, and video, require additional preprocessing to derive meaning and support
metadata.

Big data examples

Data can be a company’s most valuable asset. Using big data to reveal insights can help
you understand the areas that affect your business—from market conditions and
customer purchasing behaviors to your business processes.
Here are some big data examples that are helping transform organizations across every
industry:
1. Tracking consumer behavior and shopping habits to deliver hyper-personalized
retail product recommendations tailored to individual customers.
2. Monitoring payment patterns and analyzing them against historical customer
activity to detect fraud in real time.
3. Combining data and information from every stage of an order’s shipment journey
with hyperlocal traffic insights to help fleet operators optimize last-mile delivery.
Data Mining

Data mining is the use of machine learning and statistical analysis to uncover patterns
and other valuable information from large data sets.

Video 2: What is Data Mining?

How data mining works

The data mining process involves several steps from data collection to visualization to
extract valuable information from large data sets. Data mining techniques can be used to
generate descriptions and predictions about a target data set.

Data scientists or business intelligence (BI) specialists describe data through their
observations of patterns, associations and correlations. They also classify and cluster
data through classification and regression methods, and identify outliers for use cases,
such as spam detection.

Data mining usually includes five main steps: setting objectives, data selection, data
preparation, data model building, and pattern mining and evaluating results.

1. Set the business objectives: This can be the hardest part of the data mining process,
and many organizations spend too little time on this important step. Even before the
data is identified, extracted or cleaned, data scientists and business stakeholders can
work together to define the precise business problem, which helps inform the data
questions and parameters for a project. Analysts might also need to do more research to
fully understand the business context.

2. Data selection: When the scope of the problem is defined, it is easier for data
scientists to identify which set of data will help answer the pertinent questions to the
business. They and the IT team can also determine where the data should be stored and
secured.
3. Data preparation: The relevant data is gathered and cleaned to remove any noise,
such as duplicates, missing values and outliers. Depending on the data set, an additional
data management step might be taken to reduce the number of dimensions, as too
many features can slow down any subsequent computation. Data scientists look to
retain the most important predictors to help ensure optimal accuracy within any model.
Responsible data science means thinking about the model beyond the code and
performance, and it is hugely impacted by the data being used and how trustworthy it is.

4. Model building and pattern mining: Depending on the type of analysis, data scientists
might investigate any trends or interesting data relationships, such as sequential
patterns, association rules or correlations. While high-frequency patterns have broader
applications, sometimes the deviations in the data can be more interesting, highlighting
areas of potential fraud. Predictive models can help assess future trends or outcomes. In
the most sophisticated systems, predictive models can make real-time predictions for
rapid responses to changing markets. Deep learning algorithms might also be used to
classify or cluster a data set depending on the available data. If the input data is labeled
(such as in supervised learning), a classification model might be used to categorize data,
or alternatively, a regression might be applied to predict the likelihood of a particular
assignment. If the data set isn’t labeled (that is, unsupervised learning), the individual
data points in the training set are compared to discover underlying similarities,
clustering them based on those characteristics.

5. Evaluation of results and implementation of knowledge: When the data is

aggregated, it can then be prepared for presentation, often by using data visualization
techniques, so that the results can be evaluated and interpreted. Ideally, the final results
are valid, novel, useful and understandable. When these criteria are met,
decision-makers can use this knowledge to implement new strategies, achieving their
intended objectives.

Article 3: The Evolution of Big Data and the Future of the Data Platform
Machine Learning

ML is a computer science, data science and artificial intelligence (AI) subset that enables
systems to learn and improve from data without additional programming interventions.
Instead of using explicit instructions for performance optimization, ML models rely on
algorithms and statistical models that deploy tasks based on data patterns and
inferences. In other words, ML leverages input data to predict outputs, continuously
updating outputs as new data becomes available. On retail websites, for instance,
machine learning algorithms influence consumer buying decisions by making
recommendations based on purchase history. Many retailers’ e-commerce
platforms—including those of IBM, Amazon, Google, Meta and Netflix—rely on artificial
neural networks (ANNs) to deliver personalized recommendations. And retailers
frequently leverage data from chatbots and virtual assistants, in concert with ML and
natural language processing (NLP) technology, to automate users’ shopping experiences.

3 types of machine learning

Machine learning involves showing a large volume of data to a machine to learn, make
predictions, find patterns, or classify data. The three machine learning types are
supervised, unsupervised, and reinforcement learning.

1. Supervised learning

Gartner, a business consulting firm, predicts that supervised learning will remain the
most utilised machine learning among enterprise information technology leaders in
2022 [2]. This type of machine learning feeds historical input and output data in machine
learning algorithms, with processing between each input/output pair that allows the
algorithm to shift the model to create outputs as closely aligned with the desired result.
Common algorithms used during supervised learning include neural networks, decision
trees, linear regression, and support vector machines.

This machine learning type got its name because the machine is “supervised” while
learning, which means you’re feeding the algorithm information to help it learn. The
outcome you provide the machine is labelled data, and the rest of the information you
give is used as input features.

For example, suppose you were trying to learn about the relationships between loan
defaults and borrower information. In that case, you might provide the machine with
500 cases of customers who defaulted on their loans and another 500 who didn't. The
labelled data "supervises" the machine to determine your desired information.

Supervised learning is effective for various business purposes, including sales

forecasting, inventory optimisation, and fraud detection. Some examples of use cases
include:
● Predicting real estate prices
● Classifying whether bank transactions are fraudulent or not
● Finding disease risk factors
● Determining whether loan applicants are low-risk or high-risk
● Predicting the failure of industrial equipment's mechanical parts

2. Unsupervised learning

While supervised learning requires users to help the machine, unsupervised learning
doesn't use the same labelled training sets and data. Instead, the machine looks for less
obvious patterns in the data. This machine learning type is very helpful when you must
identify patterns and use data to make decisions. Common algorithms used in
unsupervised learning include Hidden

Markov models, k-means, hierarchical clustering, and Gaussian mixture models.

Using the example from supervised learning, let's say you didn't know which customers
did or didn't default on loans. Instead, you'd provide the machine with borrower
information, and it would look for patterns between borrowers before grouping them
into several clusters.

This type of machine learning is widely used to create predictive models. Common
applications also include clustering, which creates a model that groups objects based on
specific properties, and association, which identifies the rules between the clusters. A
few example use cases include:
● Creating customer groups based on purchase behaviour
● Grouping inventory according to sales and/or manufacturing metrics
● Pinpointing associations in customer data (for example, customers who buy a
specific style of handbag might be interested in a specific style of shoe)

3. Reinforcement learning

Reinforcement learning is the closest machine learning type to how humans learn. The
algorithm or agent learns by interacting with its environment and getting a positive or
negative reward. Common algorithms include temporal difference, deep adversarial
networks, and Q-learning.

Returning to the bank loan customer example, you might use a reinforcement learning
algorithm to examine customer information. If the algorithm classifies them as high-risk
and they default, the algorithm gets a positive reward. If they don't default, the
algorithm gets a negative reward. Ultimately, both instances help the machine learn by
better understanding the problem and environment.

Gartner notes that most ML platforms don't have reinforcement learning capabilities
because they require higher computing power than most organisations have.
Reinforcement learning is applicable in areas capable of being fully simulated that are
either stationary or have large volumes of relevant data. Because this type of machine
learning requires less management than supervised learning, it’s viewed as easier to
work with when dealing with unlabelled data sets. Practical applications for this type of
machine learning are still emerging. Some examples of uses include:
● Teaching cars to park themselves and drive autonomously
● Dynamically controlling traffic lights to reduce traffic jams
● Training robots to learn policies using raw video images as input that they can use
to replicate the actions they see

Business Analytics
Business analytics is the practice of using data to gain insights, make informed decisions,
and improve business performance. It can be broadly categorized into four types based
on their function and purpose:

1. Descriptive Analytics: What Happened?

● What it does: Uses data aggregation and data mining to provide insights into past
events and performance. It summarizes what has happened in the business
through reports, dashboards, and other visualizations.
● Why it's used: To understand historical trends, identify patterns, and track key
performance indicators (KPIs).
● How it's done: Through techniques like data aggregation, summarization, and
visualization.
Example: A sales report showing total revenue by product category over the last quarter.

2. Diagnostic Analytics: Why Did It Happen?

● What it does: Goes beyond descriptive analytics to uncover the root causes
behind past events and performance. It drills down into the data to understand
why something happened.
● Why it's used: To identify the factors that contributed to success or failure, and to
inform corrective actions.
● How it's done: Through techniques like drill-down analysis, data discovery, and
correlation analysis.
Example: Analyzing customer churn data to identify the reasons why customers are
leaving.

3. Predictive Analytics: What Will Happen?

● What it does: Uses statistical models and machine learning algorithms to forecast
future outcomes and trends.
● Why it's used: To anticipate future events, make informed decisions, and mitigate
risks.
● How it's done: Through techniques like regression analysis, time series
forecasting, and machine learning.
Example: Predicting customer churn to identify those at risk of leaving, enabling
proactive retention efforts.
4. Prescriptive Analytics: What Should We Do?
● What it does: Recommends optimal actions to take based on predictive insights.
It suggests what actions should be taken to achieve a desired outcome.
● Why it's used: To optimize decision-making, improve efficiency, and maximize
profits.
● How it's done: Through techniques like optimization algorithms, simulation, and
decision modeling.
Example: Suggesting optimal product pricing strategies based on demand forecasts and
competitor analysis.

By utilizing all four types of business analytics, organizations can gain a comprehensive
understanding of their data and make more informed decisions that drive success.

Article 4: What AI-Driven Decision Making Looks Like