Even advanced marketers can get confused by the complex world of marketing analytics. In today's big data environment, it's easy to gather data - but difficult to prioritize that information in a way that makes effective analysis possible. Before you know it, you suffer from data overload, effectively rendering the concept useless for your business.
That hypothetical is the worst-case scenario. Analytics are absolutely crucial to your marketing success; without them, you simply don't know what works and what doesn't, and cannot effectively build your strategy. As a result, you move away from the goal of results marketing. At best, you're guessing at potentially successful tactics and messages. At worst, you lose budget because what you're doing is not working, and you cannot prove that allocating funds to marketing is actually money well spent for your business.
Of course, neither is a scenario any business of any size wants to be in. Fortunately, you don't have to be. In fact, simple prioritization can do wonders in helping you turn your analytics from confusing to actionable. To get to that point, it pays to understand a simple concept: data tiers.
The Core Concept of Data Tiers in Marketing Analytics
First things first: none of the below makes sense if you don't understand what we mean by data tiers. The concept is based on a simple fact: not all data is created equal. Some, in fact, has little to do with your actual marketing success.
Organizing your data helps you prioritize your efforts. All of the below metrics have a purpose within a larger context; however, some of them matter more than others. Would you rather know how many people a given social media post reached, or how much it actually contributed to your ROI?
If you know the answer to that question, you understand the core concept of and need for marketing tiers.
Tier 1: Reach and Awareness Metrics
The first tier of marketing metrics also doubles as its more basic. These analytics can help you determine the success of goals related to your brand awareness, but little more. They also happen to be the most visual; from Google Analytics to Facebook Insights, you can easily find reach and impression as a success metric.
How much of a metric is it though, in reality? That's the core question you have to answer for yourself. Sure, you can measure your brand awareness, and in the most basic sense, how much your marketing dollars got you. But that's where it ends; this first tier tells you little about user intent, action, or other metrics more relevant to actual brand success.
Tier 2: Action and Conversion Metrics
The next tier is more closely related to your actual goal. This is the one that goes beyond the mere fact of your ad showing up, and it's also where digital marketing starts to show its advantage over non-digital alternatives. Measuring the actions users take helps you determine how convincing your ad actually was in driving your audience into and down the sales funnel.
The most basic metric in this tier is link clicks, which every type of digital platform measures. But it doesn't end there. In this tier, you will also find metrics related to conversions on your website and elsewhere. Some of these numbers may be found on your ad platform's internal analytics suite. For others, you may have to use a third-party platform, such as Google Analytics.
Tier 3: Cost Metrics
Of course, conversion metrics matter little if you don't consider the cost of getting there. Digital ads tend to be pay per click (PPC), which means you only get charged when a member of your target audience actually takes an action. That, in turn, means you have to pay special attention of how much you actually spend per click, and whether that spend is paying off.
A variety of metrics fit into this grouping. We already mentioned cost per click, but it's not the only option. Cost per conversion is calculated similar, but can differ depending on how you define a conversion. Put simply: every number that is directly related to your budget is a part of this tier.
Tier 4: Return on Investment Metrics
Most marketers stop at the first three tiers. In fact, if you do so, you might already consider yourself pretty successful. But you're also missing a major opportunity. That's because in the fourth tier, they all come together.
In a way, ROI metrics are not metrics at all. Instead, they're a combination of metrics. If, for example, you're tracking your conversions, and know the approximate value of each conversion, you can compare that number to your cost to get an accurate ROI measure. This article walks you through calculating your digital ROI.
Are You Ready to Maximize Your Analytics Potential?
Build these tiers, and you can begin to make sense of your analytics efforts. All of them, of course, matter to some degree. But generally speaking, the lower tiers should receive more attention than their counterparts higher up the food chain. They're more closely connected to actual business investment and success, and thus can bring your marketing measurement beyond its bubble.
The goal of results marketing is to prioritize channels and messages that actually help your business grow and advance. But that's impossible to do if you don't know what metrics to focus on. A tiered approach like the above helps you solve that quandary, increasing your chances of successful marketing.
Of course, the end result can still be complex. You need to know how to connect individual metrics with your larger marketing and business goals, how to measure these metrics, and how to leverage them effectively to improve and build your marketing strategy. Only getting to that point can truly maximize your analytics potential.
We want to help you get there. In fact, marketing analytics, especially in the digital realm, are among our greatest strength. If you struggle with the concept, and with proving the actual success of your marketing efforts, let's work together. Contact us today to get started.