In its 2017 CMO study Deloitte reported that marketers are planning huge investments in marketing analytics, to the tune of a 375 percent increase over the next three to five years. The market demand is real, and as a co-founder of a marketing analytics software company, we’ve experienced this demand first-hand.
Underlying this trend, however, is an urgent market need that's being shaped by a proliferation of challenger brands; an increase in social, mobile and digital media (with their shortened decision and investment timelines), and a shift toward in-store activation tactics.
In this environment, with increasing fragmentation across marketing tactics, it is difficult to make the bold decisions necessary to sustain a brand (and a brand manager’s career). Brand managers are seeking to answer: “How do I invest to win?” and “What insights do I need to get there?” Winning strategies emerge from insights that deliver on three imperatives:
- Speed: Timeliness of analytics is critical to keep pace with what Deloitte refers to as “today's fast-paced digital world.”
- Comparable Data: Data sets must enable marketers to make apples-to-apples comparisons by tactic over time
- Decision-Based Insights: Scope must be defined by the decisions at-hand
Static marketing mix analyses were created to support the traditional market mix, which focused on long-lead creative and annual media buys. Today, this “driving while looking in the rear view mirror” analysis lacks the nimbleness and predictive capabilities for today’s marketplace, in addition to being cost-prohibitive for all but the largest brands.
Enter big data. The notion of having access to data on everything is what’s driving many CMOs’ thinking in responding to surveys like this one on "marketing analytics.” The problem is that if it’s not framed around a decision, big data can do more harm than good, confounding marketers with the volume of disparate data and conflicting outcomes, and slowing rather than accelerating the decision-making process.
What marketers need in today’s environment is the ability and agility to access data in “bite-sized morsels” to support a short-term plan, guide a specific investment decision or even intercept a plan in progress to redirect dollars from less effective tactics into higher-performing ones.
We recently helped a brand manager with a major Fortune 500 company overcome this type of big data-inflicted analysis paralysis after being deluged by an army of analysts who had parsed data on every tactic in the marketing mix. With analyses conducted at different levels using disparate data sets, many of the analyses conflicted and did not facilitate comparison. No one had taken time to understand the decisions at-hand, so the insights were not actionable.
To be actionable, the marketing mix must be viewed holistically. The data must be put on a level playing field, allowing digital, traditional and in-store to be evaluated comparatively.
Marketers are not lacking enough data, but the right data...at the right times. A static annual snapshot of historical performance is not an indicator of future opportunity, and equally concerning, these insights tend to overemphasize historical ROI; ROI is not a strategy.
In the absence of decision-based insights brand managers consistently tell us they lack the clarity, and just as important the confidence, to create bold plans with the potential to create brand wins, or to be able to defend those plans to senior management teams.
One way we see this mindset play out in the marketplace is the current skewed balance toward digital tactics. As our software has modeled predictive marketing mixes across a wide range of industries, we’ve consistently seen that a more balanced mix of traditional tactics (TV, radio and print) with digital media deliver better outcomes more cost-efficiently. While digital tactics are growing as a percentage of the overall mix, thanks to consumer media consumption trends, by no means should these tactics represent all of the spending. The key lies in understanding the impact of both the level and timing of the investments, something we’ve been able to model with a high degree of precision.
At Keen, our goal is to equip marketers to make dynamic, data-driven decisions that build winning brands. Because those decisions are in the marketers’ hands, we believe in putting the data there too. Our software tool lets them model a wide range of scenarios to assess how best to achieve their goals, whether to drive long-term brand value, achieve the best outcomes with a fixed budget or maximize revenue.
In conclusion, yes, CMOs are right to increase their marketing analytics investment and cultivate that capability internally. Our perspective is that it’s equally important to do so in a manner that ensures those insights facilitate faster, better decisions that help their brands -- and their brand management teams -- win.
Learn more at KeenDS.com.