Data analytics is already used extensively in digital marketing. And it’s no wonder! Its main goal is to help brands to make the most out of their data and increase both the efficiency and effectiveness of their marketing strategies.
Data analytics can be defined as a tool that processes and analyzes raw data with the goal of extracting insights that can help people make decisions. Thanks to this, marketers can discover trends and metrics that can be useful for their strategies and impact their business in a positive way.
But where do brands obtain this data from?
The main source of data comes from internal channels, such as sales transactions, email subscriptions and CRM databases. According to Villanova University, 54% of the data obtained come from internal sources while 25% of data is obtained externally and 21% come from the combination of both sources.
However, these percentages are expected to change due to the rise of first-party data, increasing the amount of internally generated data and lowering the stats of the other sources.
The importance of data analytics
Being able to deconstruct tons of data into simpler information and insights can impact the way marketers plan their strategies. Especially when we take a look at stats like the ones below:
- Internet users produce 2.5 quintillion bytes of data every day (that’s 2.500.000.000.000.000.000 bytes. Yes, you’ve read it right)
- By 2023, this amount of data will be worth $77 billion
- The big data business will grow up to $274.3 billion this year
- The global revenue of big data will reach $119 billion by 2025
- Approximately 97% of businesses are investing in big data
Just to name a few examples.
That’s why data analytics can be considered one of the top tools used in marketing as the increase in data-driven strategies is on the rise due to its accuracy and positive outcome. In fact, 54% of companies that use data analytics drive higher profits than those who don’t.
Data-driven strategies are becoming a crucial part in today’s marketing landscape. If you want to learn about how to create data-driven experiences for your customers, we’ve actually written an article about it. Click here to read it!
The numbers show that data is crucial for business growth and that any organization that is not following this trend is definitely missing out on the fun.
With so many organizations now investing in big data, you may be wondering: what are the uses of data analytics?
Keep reading down below!
How can you use data analytics?
As explained before, data analytics is mainly used to help marketers make the best decisions for their business. It can measure ROI investments, increase innovation and drive business growth, for instance.
It can also help marketers prioritize which aspects are more important and improve budget management by providing resources to the more profitable activities and aspects of the business.
Improving the customer experience
Another big use of data analytics is the ability to produce useful information to understand their audience, reach new customers and manage the current ones. It can include information regarding customer acquisition, customer retention, branding and other specialties that make up digital marketing.
What it’s clear is that this process can simplify and help brands comprehend the decisions that customers make in their buying processes and guide them throughout their journey.
You can do this with better and more sophisticated targeting and personalization based on the data obtained from the customers, like targeting specific points of their buying journey and predicting what they will do next.
This personalization and guidance via different marketing strategies, such as remarketing, social media or email marketing, will eventually lead to higher customer satisfaction.
The cons of data analytics
We’ve shown the uses and benefits of data analytics in digital marketing. But are there any negative sides?
Indeed, there are.
For instance, this kind of softwares can be very exhaustive and complex. That’s why they can also be hard to integrate into the company’s system.
Processing all the data can be a very tough task too. Making sure that the data is constantly updated and consistent can be really time consuming so sometimes it can be relegated to a secondary and less important place. However, this aspect is crucial if you want to create accurate and relevant marketing strategies.
Another negative side is that their complex interfaces can also make them difficult to understand, taking a lot of time for people to learn about its features in order to use them efficiently. Which is the reason why there are multiple courses and programs about big data and data analytics available in order to learn how to use these softwares properly. And not for free!
But once you get past these inconveniences, data analytics can be a really useful tool to use on a daily basis.
Different types of data analysis
It’s also important to note that not all data is analyzed the same way. It actually depends on what goals you’re trying to achieve. That’s why there are different levels of analysis inside the world of data analytics, which can be resumed in these three main levels:
- It answers the question: “What happened?”
- Its focus is on the past.
- Techniques used: segmentation, summary statistics, clustering, data visualization and business intelligence
- It answers the question: “What is going to happen?”
- It focuses on the future
- Techniques used: regressions analysis, predictive modeling, machine learning and forecasting
- It answers the question: “What should be done?”
- It focuses on the present time
- Techniques used: simulation, recommendation engines, algorithms and machine learning
Data is a valuable asset to have as it not only impacts the way marketers plan and create their strategies. You can also use it to obtain insights about the management of your organization and improve all aspects of your business. That’s why the earlier you start using it, the better your results will be!
What is data analytics?
Data analytics is the process of analyzing raw data in order to help people make decisions about their business and improving their performance and profit.
Why is data analytics important in marketing?
With millions of data being produced everyday, it’s really hard for marketers to dissect and process all the information. Data analytics helps them to analyze and arrange all the data so it’s clearer and easier for marketers to understand it and generate insights.
What are the different levels of data analytics?
There are three main levels: descriptive analytics, used to extract details of what has happened in the past; predictive analytics, used to predict what’s going to happen in the future, and prescriptive analytics, which focuses on what should be done in the present time.