As I prepare to undertake my MKT 618 Marketing Analytics class, I thought it a good time to discuss analytics and metrics. So often the terms are used interchangeably, and this may lead to confusion for some. Metrics may be distinguished from analytics by virtue of application. Metrics are used to quantitatively assess data, whereas analytics utilize the determined data in statistical and mathematical formulation processes so as to ascertain pattern recognition. In other words, metrics are raw bits of information, and analytics tell us what those bits of information mean, and how they can help to further goal fulfillment.
The impetus for measurement lies within a need for enhanced firm profitability. Accuracy in measurement and evaluation are important factors. Reliance on averages may be counterproductive, since they may be deceptive. Rather, specific attention to detail is required for exactitude and precision. Performance data which reveals whether efforts are useful and constructive should be examined closely in order to enable and maintain best practices. Relevant key performance indicators (KPI’s) are important to track on an ongoing basis, with periodic review to determine operational function of planned endeavors.
Two determinants which offer crucial insight are return-on-investment (ROI) and social media reach:
- ROI (analytic) – Accounting techniques such as internal rate of return (IRR) and net present value (NPV) are used to calculate expenditure outlay compared to the amount of revenue derived in a specific venture within a particular time period; this computation is defined as ROI. Information on ROI is helpful in influencing decisions as to whether a particular venture is worthwhile in pursuit. An example would be the choice to seek agency assistance in SEO for the company Website. The ROI obtained from enhanced organic search results may offer increased traffic to the site which in turn could lead to greater conversions. An informative article on ROI calculation can be found on Investopedia.
- Social Media Reach (metric) – Social media reach reveals the number of latent spectators which may be accessed through a specific social networking site, e.g. Facebook, Twitter, Pinterest and others. Social media reach offers insight into the size of the targeted audience, a static measurement which is relevant in the development of the integrated marketing communications campaign. Social media reach provides awareness of the scope of influence evoked from postings. Along with exposure, which measures the secondary connections, or the followers of followers reached, the social media reach metric will offer understanding of the growth potential derived from the strategic efforts. A list of social media reach measurement tools can be found on the content marketing site, Contently.
And now a word about depending on vanity metrics – don’t. Vanity metrics are distinguished from actionable metrics by virtue of value. Quite simply, actionable metrics offer it, and vanity metrics do not. Vanity metrics consist of irrelevant data which merely appear impressive, whereas actionable metrics bind detailed and repeatable measures to monitored outcomes. Examples of vanity metrics include registered users, downloads and raw pageviews, none of which are meaningful in any way other than to look imposing.
Much can be said for the study of analytics, metrics and KPI’s. Data scientists are fast becoming an indispensable member of the marketing management team, associates that bring a great deal of value to the table. An in-depth understanding of these factors is crucial for optimizing business procedures throughout the product life cycle.
What tools do you use to assess your marketing performance? Please share them with us in the comments section below. And join us again next week on Grannelle for yet another foray into the world of eMarketing.