With terms like “big data” and “data-driven marketing” being thrown around daily it’s no wonder that digital marketers can easily get confused about what they should be measuring, how to measure it and what they should be doing with the data. In addition, CEOs of companies are demanding more quantifiable and tangible metrics from their marketing departments or external agencies, with six in 10 professionals reporting feeling rising pressure from upper management to be more data-driven. As a result of rising demand, there has been a swooping emergence of tools, technologies and scores in the past year designed to assist marketers in determining their impact.
This lack of analytics knowledge is a huge area of opportunity for digital marketing agencies to not only help their clients reach their goals more effectively but also to prove their effectiveness in working with said clients. After all, marketers often look to their agency to provide expertise and insight that they don’t have. In fact, a 2016 research study said that 85% of brands select agencies based on their ability to report and react to analytics.
Unfortunately, due to the relatively recent emergence of the importance of data, many agencies are missing the boat when it comes to analytics. Whether it’s due to a lack of knowledge or an inability to explain the data, many agencies are merely reporting analytics to clients rather than actually monitoring them. Let’s take a look at the differences between reporting and monitoring and why agencies are better off doing the latter.
What are analytics?Analytics are the discovery, interpretation and communication of meaningful patterns in data. The term analytics can have a number of different applications in different industries. The type of analytics that are most important to agencies however are for marketing.
Marketing analytics (at it’s most basic) is the practice of gathering data to measure, manage and analyze marketing performance to maximize its effectiveness and optimize return on investment.
Why are analytics so important?Understanding marketing analytics allows marketers to be more efficient at their jobs and minimize wasted web marketing dollars.
With the sheer number of different marketing platforms available today, analytics are crucial for a number of reasons:
- They allow marketers to test different tactics against each other and determine if they are allocating their budget wisely.
- They provide insights about platforms and audiences that wouldn’t be readily available without the analytics.
- They allow marketers to prove the effectiveness of marketing and particular campaigns to directors and business owners.
- They enable marketers to quickly and effectively make changes to the campaigns based on results.
- How are our marketing initiatives performing today? How about in the long run? What can we do to improve them?
- How do our marketing activities compare with our competitors? Where are they spending their time and money? Are they using channels that we aren’t?
- What should we do next? Are our marketing resources properly allocated? Are we devoting time and money to the right channels? How should we prioritize our budget for next year?
What is the difference between monitoring and reporting?In our opinion, there is a huge difference between monitoring analytics and reporting analytics. What are those differences? Here are our definitions for reporting and monitoring:
Reporting: The process of pulling relevant data, compiling it in a series of charts and graphs and sending it to the client with no additional thought or insights. Depending on the agency you are working with, this may come at different intervals but many agencies are reporting either monthly or quarterly.
Monitoring: The process of regularly evaluating marketing metrics and data, compiling it, explaining it to the client and providing business growth ideas and strategies to the client based on their findings.
So, as you might notice, the process of monitoring analytics is much more hands-on and strategic than that of reporting.
What are agencies doing wrong when it comes to analytics?The fact of the matter is that the vast majority of people in the marketing industry understand the importance of analytics and, at this point in time, you would be hard-pressed to find an agency that doesn’t at the very least send analytics reports to its clients (though they are out there). Unfortunately in a lot of cases the buck stops here. Agencies are often simply sending excel spreadsheets or (if you’re lucky) a nicely designed Powerpoint deck outlining various metrics including cost-per-click (CPC), website visits, open rates, etc. but they aren’t actually providing any qualitative findings or insights based on the quantitative numbers.
How does monitoring help agencies?Prove effectiveness of your efforts
The most obvious way that monitoring can benefit agencies is by helping them prove the effectiveness of their work. While it is becoming more widely accepted that digital marketing can help bring in business and help companies grow, only through data monitoring and evaluation can you really prove how effective your marketing efforts actually are.
Ability to optimize campaigns for higher performance
Regular evaluation of analytics is a crucial component when it comes to identifying patterns and determining what is working well and not so well. All agencies should be paying close attention to all analytics so they can determine whether certain approaches are working better than others and how they can put more effort towards the highest performing efforts.
A marketer might believe that they should spend the majority of their budget on Google Adwords but the analytics might actually show that organic traffic based on SEO-focused blogging is actually their highest converting source. Without analyzing and evaluating all marketing analytics, the client might continue spending the majority of their budget on a tactic that isn’t getting them a ton of results.
Create new opportunities with existing clients
By regularly monitoring analytics, agencies can leverage their knowledge of ongoing campaigns and their findings to identify areas of opportunity in which they can help the client’s business grow and, likewise, increase the agency’s business. This is a huge area of opportunity for all agencies.
Let’s imagine, for example, that an agency is working with a client to increase their overall web traffic. In this instance, the agency is running an SEO campaign, publishing eight blog posts per month to their website, posting on Facebook, Twitter and Google+ and running some paid advertising on Facebook. After a few months of analytics monitoring, the agency notices that when they place a paid ad on Facebook promoting a recent blog post, that post receives 3x the number of traffic as those that aren’t advertised on Facebook. The agency could then go to the client with this finding and recommend an increased Facebook advertising budget in order to get more visits to their blog. If the agency had not been proactively looking for findings in their digital marketing data, it is unlikely anyone would have noticed this correlation and they would not have gone to their client with a recommendation for a higher advertising budget.
Which metrics should an agency be monitoring?The analytics that an agency monitors should be heavily based on the marketing campaign that is being run and the goals of each client. If a client is looking to, for example, increase the number of website visitors who become leads then an agency should focus on conversion rates of their marketing tactics whereas if a client is just looking to increase website traffic, the agency will want to focus on which tactics are driving the highest numbers of visitors.
How can agencies improve their analytics monitoring?Ok so we’ve convinced you…analytics monitoring is incredibly important and your agency needs to improve on this. How do you start?
Here are a number of ways you can shift your agency focus to more highly value analytics and data:
- Educate employees on the importance of analytics, how to effectively measure and monitor them and how to identify patterns and areas of opportunity.
- Establish a culture that values the proactive use of data for insights and business growth.
- Educate clients on the importance of not just seeing their data but making changes based on findings.
- Work with clients to identify the most important metrics for their business and build strategies that will help them reach those goals.
- Monitor those metrics regularly (daily or weekly).
- Use data to regularly make recommendations and optimize marketing strategies and tactics.
- Make sure you’re evaluating present and past data and comparing the two.