As the age-old adage goes, 50% of marketing budgets are wasted—it’s just difficult to know which half. Fortunately, for the data-driven marketer, it’s no longer true.
We’ve fully moved into the age of digital marketing, which brings with it many complexities. But it also brings opportunities that are impossible to ignore. Above all, digital marketing and advertising tactics are inherently measurable, making it possible to truly understand how your marketing investments are paying off.
It’s not automatic, of course. Nothing involving advanced metrics and analytics ever is. But if you use it the right way, data-driven marketing has the potential to drive sustainable and potentially exponential business growth.
So let’s dig into the concept. We’ll start with a basic definition of data-driven marketing, before examining 5 ways in which you can use analytics to enhance your marketing efforts, bring in more customers, and propel your business to success.
What is Data-Driven Marketing?
Let’s start with a basic definition. At its core, data-driven marketing is a promotional approach that bases most, if not all, strategic decisions on quantitative data and analytics. The data on which these decisions are made can come from a number of sources:
- Information about the demographics and preferences of target customers
- Broad consumer and market trends across the industry and multiple industries
- Data and information about the success of current and past marketing efforts
- And more
In a perfect world, relying on that data to make marketing decisions almost necessarily means making your marketing more successful. Because you can base your choices on quantifiable metrics rather than hunches or past personal experience, you increase your chances of creating messaging, focusing on channels, and building creative materials specifically designed to be relevant to your audience.
5 Ways in Which Analytics Can Help Your Marketing Succeed
Data-driven marketing is a strategic approach that should feed into all parts of your promotional efforts. But it still helps to break it out more specifically, like using these 5 tactics to let data and analytics drive your marketing.
1. Use Consumer Trends to Identify Customer Preferences
First, it helps to start broadly. Rather than using your own marketing data and reporting, look to learn as much as possible about your target audience using publicly available consumer research and data.
For example, you can easily learn about how different demographics use different social media channels. Generational research can be invaluable in helping you understand how Gen Z differs from Millennials, Millennials from Gen X, and so on. You’ll probably even find publicly available research related to how consumers approach your specific industry.
Use that data to build a broad marketing structure, like choosing what social media channels you want to prioritize or whether it makes sense to pursue user-generated content to satisfy Gen Z’s need for authenticity. That way, all your promotional efforts are starting off on the right foot.
2. Use Competitor Data to Find Your Niche and Differentiators
A second component of data-driven marketing goes beyond your own business. In fact, you can use it to conduct a comprehensive competitive analysis, helping you understand the alternatives your customers have when in the decision phase.
For example, some tools now help you see which keywords consumers use when they land on your competitors’ website. That information, in turn, provides crucial insights into the types of messaging that resonates with your audience. You can now build a more nuanced messaging strategy that differentiates you from your competition and convinces your audience to find you instead.
3. Use A/B Testing to Incrementally Improve Your Creative
As you build your campaigns, the text and visuals you use to promote your business and products will be crucial. But, as with the choices you make on channels and overarching messaging, you cannot rely on guesswork.
With A/B testing, you don’t have to. Instead, you can run multiple iterations of the same ads with just one variable (like the headline or image) changed to random segments of the audience to determine which performs better. Each time an iteration wins out in performance, you can run the next test to gradually improve your creative over time.
Best of all, most digital platforms now integrate A/B testing in their campaign setup. That automates the process, while also ensuring that the segments you test against each other are random enough for the results to be accurate.
4. Use Web Analytics to Optimize Your Online Presence
Never underestimate the power of your website. It’s not just a hub for all of your marketing and content, but provides perhaps the most significant analytics goldmine to drive your data-driven marketing.
Through your website analytics, you can find out anything from the demographics of your audience to the type of content that appeals to them. You can find out which keywords they use to find you, and which messaging is most effective in helping them convert.
That information, in turn, can significantly improve your online presence over time. And, by benchmarking your website performance, you can also measure how the changes you’re making impact your marketing efforts.
5. Use Campaign Reporting to Improve Your Marketing Over Time
Finally, the analytics you gain specifically from your marketing campaign can also help in gradually improving the ROI of your efforts. Channels like Facebook, Google Display, and others all offer in-depth campaign reporting that help you understand your ad and campaign performance at every level.
An understanding of that data, in turn, can help you understand exactly what your advertising money has resulted in. By the time the next campaign rolls around, you can use those insights to improve around the margins and enhance your ROI in the process.
Embrace Data-Driven Marketing to Drive Business Growth
When you’re new to the concept, data-driven marketing can seem intimidating. But a full embrace of the concept has the potential to pay off big time. The analytics you get at every level of your marketing can help you better target, better message, and better execute any effort you undertake to drive customer and business growth.
As we move deeper into the digital age, the data available to marketers will only become more comprehensive and complex. Putting a data-driven marketing strategy in place now ensures that no matter what the future holds, your promotional efforts are set up for long-term success.
