Types of Marketing Analytics and How They Affect Marketing Strategies
Marketing analytics studies your data to determine how well your marketing campaign is doing. This process is mainly about comparing how much effort you put in and how much return on investment you can expect. Although this sounds like a simple process, it can easily get complicated.
In this article, I will talk about the different types of marketing analytics and how they (should) affect your marketing strategy. Adjusting to flexible business environments is especially vital for SaaS businesses. Aside from this article, if you are looking for ways to learn more about marketing strategies, you can check out other articles written on the HockeyStack blog.
How Many Types of Marketing Analytics Are There?
Marketing analytics, generally speaking, refers to the process of data collection and analysis with the purpose of helping a company increase its marketing reach. Although this process has existed for some time, it has become especially important with the rise of SaaS businesses.
This growth in the number of saas businesses has led to an increase in the popularity of marketing analytics tools like Hockeystack which allow these companies to identify trends, make accurate predictions about customer behavior, and minimize overhead costs by optimizing marketing campaigns.
There are three types of marketing analytics; these are descriptive, predictive, and prescriptive. However, keep in mind that the fact there are different types of marketing analytics does not mean that they are contradictory to one another; you can utilize different marketing analytics methods at the same time to figure out your marketing needs.
With the simple explanation and grouping of marketing analytics settled, let’s talk about the type of marketing analytics more in-depth.
1. Descriptive Analytics
Descriptive analytics aims to look at the data of what happened and allow you to figure out what is happening right now. This is the most conventional analytics method since this method has been around longer compared to the other ones.
A more concrete example could be as follows: Assume that you have a blog. When you are utilizing descriptive analytics to figure out your marketing strategy, you pick a certain time period after an article was published in the past and compare it to the statistics of your newly released articles.
Although this might sound like simple progress, which is partially true considering this type of analytics is relatively easier to calculate compared to other methods. Still, you should keep in mind that you should use a tool if you want to increase the efficiency of this entire process.
Here is a short list of pros and cons of the Descriptive Analytics method:
- Utilizing descriptive analytics is relatively easy compared to the other methods of analytics.
- Descriptive analytics allow you to make comparisons between different aspects of your website.
- This method allows you to determine “why” something happened.
- Descriptive analytics is a must-have if you are aiming to become a customer-centric company.
- Although you can technically use descriptive analytics to make predictions regarding the future, it is not as effective compared to the other methods I will mention later on.
- Since this method is widely used by most companies, it won’t be enough for you to gain an edge over your competitors.
- The fluctuations in your sector can reduce descriptive analytics’ unreliability.
- You need to collect your data for a long time for descriptive analytics to be reliable.
2. Predictive Analytics
The aim of predictive analytics, as it can be deduced from the name, is to utilize your data to make predictions about the future. This is achieved by algorithms and software, like Hockeystack, that allow you to see patterns in user behavior and make accurate predictions about future actions.
Predictive analytics is another term that has increased in popularity with the rise of SaaS businesses and online marketing.
If the main question descriptive analytics tries to answer is “what” and “why”, the main question that defines predictive analytics is “What will happen”.
- Predictive analyses will enable you to make calculations regarding the future. This is especially important if you are a growing enterprise.
- The algorithm utilized by tools will enable you to look at your business strategy from different perspectives.
- This method will make it easier for you to develop new strategies by helping you to understand possible trends.
- Despite using data specifically for the purpose of prediction, predictive analytics is somewhat unreliable compared to other methods.
- Predictive analytics may not be the best choice for companies that are just starting out because they will not have enough data to make accurate predictions.
- It is more complicated compared to descriptive analytics.
3. Prescriptive Analytics
Prescriptive analytics, like predictive analytics, aims to analyze the possible trends for your company in the future. However, while the predictive method mainly deals with what will happen, prescriptive analytics also deals with what can be done about future trends for your business.
For example, assume that your predictive analytics suggests that your website will have fewer visitors in the future. What prescriptive analytics does is suggest multiple methods (like optimizing ad campaigns, promotions, or increasing targeted marketing ) to reverse the trend.This aspect of prescriptive analytics makes it especially useful if you want to increase your user activation rate or reduce your user churn rate, making it suitable for both small and large-scale businesses.
- Prescriptive analytics combines marketing predictions with marketing decisions.
- It enables you to plan for your moves beforehand.
- It is more reliable compared to predictive analytics.
- A large pool of data is required for prescriptive analytics.
- Since prescriptive analytics is a complicated process, not all tools are reliable.
- Although prescriptive analytics is good for short to mid-term choices, it becomes increasingly unreliable if you try to plan long-term.
Comparison Between The Three:
You can see a table explaining the main aspects of the three types of analytics that are mentioned.
Why It's Used
Helps you derive insights from existing data
Predicts future trends
Helps you plan for the future
Not too reliable
Reliable for short and mid-term planning
Data Requirement for Analysis
Requires a limited amount of data to work
Requires a moderate amount of data
Requires a wide range of data for extracting insights
Why is Marketing Analytics Important?
Marketing analytics is important not only because of the advantages it provides you with, like analyzing your data to get an estimation of your marketing possibilities. In fact, since so many SaaS companies use it, not using marketing analytics might even prove to be detrimental for you.
Benefits of Using Marketing Analytics
Marketing analytics is important because it enables companies to get a clear view of their data and manage it efficiently for the purpose of increasing ROI.
Leveraging marketing analytics as a part of your marketing strategy could result in the improvement of multiple the results that you get from your marketing campaigns such as increased conversions, lower bounce rates, and higher customer engagement.
1. Integrating Your Entire Marketing Data:
Your company is probably using multiple platforms for your marketing campaigns. Marketing analytics allow you to combine these independent forms of data and make sense of them together.
Cross-analyzing your data is especially important if you want to bring a winning strategy that you have on one platform to another platform. This will allow you to see an overall increase in your ROI.
2. Better Segmenting
Marketing analytics will also help you to improve segmenting of your target audience, which in turn allows you to create more specific advertisement campaigns. This segmenting process is also made easier with custom dashboards which enable you to edit and inspect your target audience according to your needs.
3. Understand Each Step of Customer Journey
Benefiting from marketing analytics will enable you to understand every step a customer goes through from when they are first exposed to your product to when they finally decide to buy it. Understanding this process is vital for improving your shortcomings in marketing campaigns.
By utilizing marketing analytics, you will be able to understand whether you should focus on reaching new customers or holding on to the ones that are already acquainted with your product.
Disadvantages of Not Using a Marketing Analytics:
Just as using marketing analytics comes with advantages, there are disadvantages of not using it. Here is a short list of problems that you might face if you decide not to use marketing analytics:
1. You Might Have Trouble Understanding Customer Acquisition Costs
Understanding your customer acquisition costs is the difference between profitable and unprofitable marketing campaigns. Without understanding what your target audience goes through, it is pretty hard to make estimations on how much you should spend on advertisements.
While utilizing marketing analytics allows you to understand the customer journey a customer goes through, in the absence of such progress, it is unlikely that you would be able to fully grasp and make estimations about your customer acquisition costs.
2. You Might Have Trouble Measuring Your Brand Awareness
Just like it is hard to make a calculation regarding customer acquisition costs without the use of marketing analytics, the same is true for calculating the reach and effect of your brand awareness and increasing the brand awareness of your target audience.
Are There Any Tools Available for Marketing Analytics?
Yes! There are multiple tools designed to help you with your marketing analytics. Tools like Hockeystack allow you to dive deeper into marketing data and how long it would take for you to achieve your goals.
Hockeystack not only records your data history but allows you to make meaningful comparisons between data from different time periods. With a tool like Hockeystack, you can track historical customer data and find out which marketing channels are popular among your target audience to increase the likelihood of quicker conversions
You can also track from which platform and countries your visitors come through, which is essential if you are trying to appeal to a more specific portion of your visitors to increase your user retention rate.
These tools often come with a live demo allowing companies to test the waters and determine whether the tools’ interface, features, and integrations will work for them.
Best Practices for Marketing Analytics
Here are some of the best practices you can adopt to increase the efficiency of your marketing analytics.
1. Create Customized Dashboards for Your Website
All companies’ needs are different; while some focus on increasing their user activation rate, others focus on reaching new audiences. Creating customized dashboards will enable you to always check out what is important for your company. Customized boards increase your visibility and allow you to track the metrics you deem most important, allowing you to make better and more informed decisions.
Hockeystack allows users to create an almost unlimited number of dashboards for their SaaS business.
2. Record and Analyze Your Data Often
Tracking and analyzing your marketing data regularly will increase the efficiency of your marketing analytics and will allow you to get a clear view of your marketing process. Keep in mind that utilizing custom dashboards will allow you to get more benefit from regularly tracking and analyzing your marketing data.
3. Choose a Strong Analytics Tool
Utilizing a tool like Hockeystack is vital if you want to get reliable results for your marketing analytics. You should check out our blog or live demo to understand better what tools can offer you in terms of marketing analytics.
Marketing analytics is an important part of any SaaS business. This is because marketing analytics allows its users to analyze existing data and predict the trends that are related to their company. Understanding the trends is an essential part of planning for the future and according to the needs of your individual company.
Using software like Hockeystack, you can create your own dashboards to suit your marketing and analysis needs. Tools like Hockesytack are important not only because they allow you to gain insights more efficiently but also because they make your data analysis process much more user-friendly.
Marketing analytics will enable you to keep track of the most important metrics for SaaS businesses. Marketing analytics will not only enable you to keep track of these metrics smoothly but will also provide you with important insights you can use to gain an edge over your competitors.
The three types of marketing analytics are descriptive analytics, predictive analytics, and prescriptive analytics.