Measuring the effectiveness of digital marketing is one of the greatest challenges facing organizations today. According to HubSpot's 2018 State of Inbound report, 42% of marketers cited “proving the ROI of our marketing activities” as one of the biggest challenge they face within their company.
The trouble is, when most marketers hear ‘digital analytics,' they tend to think of the metrics you'd typically associate with a simple web analytics tool like Google Analytics — traffic, bounce rate, unique visitors, etc.
However, web analytics is only part of what encompasses digital analytics.
While web analytics can provide you with a wealth of insight and data into the performance of your website, marketers need richer data to understand the impact of their marketing campaigns on conversion rates and a buyer's journey. Looking at top-level web analytics metrics like traffic is only the first piece of the puzzle.
Enter digital marketing analytics, which offer a much more comprehensive view of what's working when it comes to your marketing strategy, and what isn't.
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What is digital analytics?
Digital analytics is the translation of customer behavior into actionable business data. Today's marketers can use digital analytics tools to examine the many online channels their buyers might interact with and identify new revenue opportunities from existing business campaigns.
So, why exactly do digital marketing analytics matter? Let's take a look at what makes digital analytics so important today, and how they compare to and improve on the insights offered by more basic web analytics.
Why Digital Analytics Is More Important than Web Analytics
Quite simply, web analytics (like traffic and website performance) just isn't enough. The data that web analytics provides doesn't cut it for marketers who need to understand how their work makes an impact throughout the entire marketing and sales funnel.
Let's face it: Today's marketing goes well beyond the bounds of your website. It's the intersection of what happens between all of your marketing channels, the outcome that provides marketing insight, and your reporting needs to depict your progress.
This provides the foundational data you need to structure your flywheel — delighting your existing customers enough to attract and engage news ones.
Web analytics measure things a webmaster or technical SEO specialist cares about, like page load speed, page views per visit, and time on site. Digital marketing analytics, on the other hand, measure business metrics like traffic, leads, and sales, and allows you to observe which online events determine if leads can become customers.
Digital marketing analytics includes data not only from your website, but also from sources like email, social media, and organic search.
How Digital Marketing Analytics Connects Every Business Activity
With digital marketing analytics, marketers can understand the effectiveness of their entire marketing strategy, not just the effectiveness of their website. Using digital marketing analytics allows marketers to identify how each of their marketing initiatives (e.g., social media vs. blogging vs. email marketing, etc.) stack up against one another, determine the true ROI of their activities, and understand how well they're achieving their business goals.
The central question is: How can you structure an appropriate business goal to visualize your marketing team's efforts in the most accurate way possible?
As a result of the information they can gather from full-stack digital marketing analytics, marketers can also diagnose deficiencies in specific channels in their marketing mix, and make adjustments to strategies and tactics to improve their overall marketing activity.
You can spend hours and hours slicing and dicing data in web analytics tools, comparing new vs. repeat visitors month over month. But when it comes down to it, you'll come up short of a truly comprehensive view of how your marketing is doing.
There's no doubt that marketers are aware there's a deficiency in how they're able to measure the effectiveness of what they do; here's how full-stack digital marketing analytics makes up for that deficiency.
The ‘Full Picture' of Digital Marketing Analytics
Digital analytics can be used to structure a business goal into outcomes based on three broad categories:
- The relationship between different marketing channels
- People-centric data on the buyer's journey
- Revenue attributed to specific marketing efforts
Let's highlight these main differentiators.
1. The Relationship Between Marketing Channels
With digital marketing analytics, you have a good, solid look into the direct relationships between your marketing channels. It's great to be able to see how each of your individual channels (e.g., social media, blogging, email marketing, SEO, etc.) are performing, but the true power of analytics comes into play when you can easily tie the effect of multiple channels' performances together.
For instance, let's say you sent an email to a segment of your database. Digital marketing analytics not only tells you how many people clicked through from your email to your website, but also how many of those people actually converted into leads for your business when they got there.
Furthermore, you can compare the impact of that individual email send with other marketing initiatives. Did that email generate more leads than the blog post you published yesterday? Or was the content you shared via Twitter more effective?
2. People-Centric Data on the Buyer's Journey
As we mentioned earlier, a key differentiator between web analytics and digital marketing analytics is that the latter uses the person — not the page view — as the focal point.
Digital marketing analytics enables you to track how your individual prospects and leads are interacting with your various marketing initiatives and channels over time. How did an individual lead first come to find your website? From Google? Facebook? Direct traffic? Is that lead an active part of your email subscriber base, clicking and converting on marketing offers presented via email? Do they read your blog, and have they downloaded any content offers that could indicate an interest in your products/services?
Full-stack digital marketing analytics can tell you all of this and more, providing you with extremely valuable lead intelligence that can help inform the direction of your future campaigns.
Looking at all of this information in aggregate can help you understand trends among your prospects and leads and which marketing activities are valuable at different stages in the buyer's journey.
Perhaps you find that many customers' last point of conversion was on a certain ebook or whitepaper. Having this data makes it possible to implement an effective lead management process, enabling you to score and prioritize your leads and identify which activities contribute to a marketing qualified lead (MQL) for your business.
3. Revenue Attributed to Specific Marketing Efforts
One of the most useful functions of marketing analytics is its ability to attribute specific marketing activities to sales revenue. Sure, your blog may be effective in generating leads, but are those leads actually turning into customers and making your business money? Closed-loop marketing analytics can tell you.
The only dependency here is that your digital marketing analytics system is hooked up to your customer relationship management (CRM) platform, like the free HubSpot CRM.
Having this closed-loop data can help you determine whether your individual marketing initiatives are actually contributing to your business' bottom line. Through it, you can determine which channels are most critical for driving sales.
Perhaps you find that your blog is your most effective channel for generating customers, or conversely, you find that social media is really only powerful as an engagement mechanism, not a source of sales.
How to Use Digital Analytics Effectively
Most marketers know they need to be looking at more than just traffic and website performance to get the insights we've talked about so far, but why do so many of us still struggle to measure the impact and prove the ROI of our online marketing activities?
- We don't have solid goals in place for our campaigns, or;
- We don't have the means to successfully measure our success.
Quite often, you'll find it's a combination of the two.
One way to mitigate this is to have an actionable business goal combining your marketing team’s priorities. Typically, this can be achieved using the S.M.A.R.T. format. In this strategy, each goal you create must be:
A good business goal will inherently organize your team’s tasks towards producing specific outcomes or metrics to measure their progress. For marketing teams, this can be broadly summarized into three major categories:
- Web traffic and diversity of sources
- Conversions generated from traffic to produce leads and (eventually) customers
- Identifying net new revenue as a direct result of certain marketing efforts, laying a roadmap for further growth and cost-effective marketing investments.
The fact is, most marketers need to have a number of different digital analytics platforms in place in order to get all the insights they need to understand their marketing performance and make sound decisions. They gather data about their email marketing through the analytics provided by their email service provider, information about their social media performance through their social media monitoring tool, blog analytics from their blogging platform, and the list goes on.
This fragmented approach to reporting makes it really difficult to connect the dots and make informed decisions about the future of your digital strategy. The ideal solution is to implement an all-in-one marketing and reporting platform that offers end-to-end visibility on your marketing activities, allowing you to measure everything in one place.
Rather than just looking at canned reports for each traffic source — many of which are readily available in HubSpot — you can use custom reporting capabilities to construct data charts that depict an entire marketing campaign's progress, not just how certain content is doing through certain channels.
Here's how you can configure your digital analytics to capture this holistic view, showing you where a potential buyer came and where he/she is going. We'll use HubSpot's Marketing Hub as an example. Here are some of the types of analytics you can see in platforms like Marketing Hub:
Web Traffic by Original Source
This is an easy report that you can configure by date range and/or original source to show what marketing channels you can capitalize on to turn more of that traffic into leads and customers. You can use HubSpot's Traffic Analytics tool to get access to this.
First Conversion by Original Source/Persona
This report quantifies your impact by the amount of new contacts you’re able to create based on the first content offer or form submitted, and tie that back to the original source of that lead. Another way to look at this is to segment your contacts by a particular persona to show which ones are giving the most return that your team is creating content for.
Contacts Funnel Report
This calculates the conversion rates down the marketing and sales funnel, showing new leads that become marketing qualified leads, sales qualified leads, and, ultimately, new customers.
Marketing Contribution to Revenue
This custom report is predicated on you using the marketing qualified lead lifecycle stages, visualizing those that converted into customers and their relative value in terms of revenue generated.
Customer Acquisition Cost
This can be seen in HubSpot by using calculated fields or custom properties to depict the amount of money spent by your marketing team to attract, engage, and delight your buyer persona.
These closed-loop reports are just some of the capabilities available to depict your progress towards your business’ bottom line.
How Digital Analytics Impacts Your Business
All of the insights, information, and data you can gather from your digital marketing analytics tool(s) is really only useful if you do something with it. The true value of analytics isn't just to prove the value of marketing to your boss; it's also to help you improve and optimize your marketing performance — on both an individual channel-by-channel basis as well as an overall, cross-channel machine.
As mentioned above, you'll also be able to implement closed-loop reporting, making it easier to prove how your marketing efforts are positively impacting your sales team, who are being fed much higher quality leads.
The important thing to realize here is, if you're relying solely on top-level web analytics, you're missing out on a lot of powerful data that can help inform your marketing strategy. So when evaluating digital analytics tools for your business, be sure you're looking for evidence of digital marketing analytics, not just website analytics.
Original source: https://blog.hubspot.com/marketing/digital-marketing-analytics