Recent research shows that 50% or more of company advertising budgets are wasted. Here’s how to fix that.
In 2020, AirBNB slashed 50% of their marketing spend with no major decline in attributable revenue. They continued that course in 2021 with great success.
When Uber, Chase, and P&G slashed ad budgets in similar fashion, they also met with little or no decline in sales. Many smaller brands have run into the same problem (such as this tech company that blew $50,000 on Google Ads) of huge wasted ad spend.
Clearly, something is rotten in the state of marketing analytics. Woopra has a few ideas about how to fix that. This guide will take a deep dive into how marketing analytics currently works, and how to improve it.
What Is Marketing Analytics?
Marketing analytics is the practice of measuring and managing marketing data. The goal is to use that data to make smart managerial decisions. It includes all the ways that you track, display, and attribute relevant data like traffic, leads, sales, and revenue.
In Practice, How Does Marketing Analytics Work?
First off, let’s clarify that marketing analytics is synonymous with digital marketing analytics. There are ways of tracking offline marketing, but that’s not what we’re focusing on here.
To measure the digital marketing experience, typically there will be some type of analytics software employed. For a lot of (even large) companies, that software is Google Analytics.
According to Datanyze, Google Analytics represents at least 53% of the web analytics market. (In this chart, it’s the Google Analytics + Google Universal Analytics sections combined.)
It’s shocking how many medium-sized and big companies use the free version of Google Analytics. I worked at a billion-dollar marketing company that used the free Google Analytics platform for its primary web analytics software.
This included on websites that we ran for companies including AT&T, Verizon, DirecTV, and more.
In my experience, large companies supplement Google Analytics with some type of in-house analytics platform that tracks conversions and/or revenue.
It’s easy to see why Google Analytics is so popular.
Where Google Analytics Shines
Google Analytics is easy to use. It comes set up with a ton of out-of-the-box reports. This includes the demographics report.
Location and device information:
And my favorite, the marketing channel “Acquisition” report:
Google Analytics integrates nicely with other Google tools. This includes Google Ads (for advertising), Search Console (for SEO), Google My Business, and others.
And to top it all off: it’s free! What’s not to love?
Google Analytics Shortcomings
For starters, the free version of Google Analytics (the one that everyone uses) doesn’t give you all of your data. It’s sampled.
Which could lead to stuff like this:
Paid Search keyword data in Google Analytics
The dreaded (not set) appears. In this example, 67% of the data is missing. Oops!
To be clear, the (not set) issue may not always stem from data sampling. There are multiple reasons why it could appear.
In many cases, the “Direct” channel is reported to be much too big.
When I was new as an inhouse marketer at a SaaS company, one of the first things that my manage told me was, “We know that Direct channel traffic counts are wrong because there was an error in our Google Analytics setup and they are counted twice.”
That was the problem that they knew about…
What’s less-well known is that Google buckets many of the traffic visits (sessions) that it doesn’t know what to do with as “Direct”.
“Direct” channel traffic is supposed to be people who type your website into their browser bar, without clicking on a link of any sort to get to your website. In my experience, Google Analytics buckets way too many people there.
People that actually found you through some other means.
Google buckets many of the traffic visits (sessions) that it doesn’t know what to do with as “Direct”.
In the name of marketing science, Groupon actually deindexed most of their website from the Google search engine one afternoon in 2014, just to see how it would affect their Google Analytics traffic data.
The result? Their Direct channel traffic fell by 60% in that time period. In other words, they found out that 60% of their reported Direct channel traffic was actually organic search traffic.
Which brings us to channel attribution.
Getting Channel Attribution Right
The default attribution model for Google Analytics is “Last Touch” attribution. In other words, the last marketing channel or link that your customer clicked on before they purchased your product becomes the channel that gets the credit for that sale.
Say, for example, a potential customer sees your ecommerce company Facebook ad and clicks on it. But they don’t convert at that time, because they’re too busy arguing with their cousin in Minnesota over politics (while they’re in the bathroom).
A week later, they remember about your company and do a Google search on their phone to find your company. They browse around the website and sign up for your email list.
After another few weeks, they read several emails on their laptop and browse through a few company reviews on third-party websites. They finally purchase after clicking on an affiliate link from that third-party review.
To recap the customer journey, this customer interacted with:
- Facebook ads
- Organic Google search results
- Affiliate product reviews
The affiliate link click would get the purchase conversion. But a Facebook ad actually drove the initial brand interaction. What do you make of that?
At any rate, in 99% of cases, Google Analytics would not correctly connect this particular user to all of the marketing channels involved in their particular customer journey.
Yes, you can change your preferred conversion attribution model in Google Analytics to “first touch” or “linear” or something else. You still won’t get the whole customer journey to be correctly tracked anyways.
This presents a tough dilemma for marketing leaders and C-level executives. If you don’t know what’s working, how do you know what to invest in?
In the early 1900s, business leader John Wannamaker famously said, “Half the money I spend on advertising is wasted; the trouble is I don't know which half.”
How can you solve this age-old marketing problem?
The Secret to Accurate Multi-Channel Attribution
Most companies have many marketing channels. Which means that their customers are interacting with them across different platforms.
Track them all.
And bring that data into one place.
Young hobbits, “There can only be one Lord of the Rings. Only one.”
If you’re a B2B SaaS company, your customer data is scattered and leaderless, like the free peoples of Middle Earth.
It might look something like this:
- Marketing website traffic is in Google Analytics
- Conversion or revenue metrics tracked in Tableau
- Email subscribers are in Marketo
- Sales leads are in Salesforce
- Customer support happens in Zendesk
You need to integrate each part of your MarTech stack into one analytics platform.
Only then you will have a “single source of truth” for marketing analytics.
Track the Right Metrics
If your thinking is anything like mine and the marketers that I work with, you hate the data silos inherent to digital marketing:
- There is no cross-platform tracking for website, mobile app, and web app activity. (In other words, once a user logs into their account, you lose all visibility into them.)
- Tracking is based on sessions/site visits, not users. (Yes, there is a “user” metric in GA, but you can’t actually track what any individual users actually do.)
- Marketing channel platforms (and sometimes personnel) don’t integrate with each other.
If you have a VP of Marketing or CMO in your organization, ask them this the next time that you see them, “What is our advertising budget ROI?”
I would be willing to bet good money that you won’t get a straight answer. Because 95% of the time, they just don’t know.
Managers tend to be pretty good at knowing all sorts of marketing metrics, including cost per lead, revenue per customer, churn rate, top landing page conversion rates, and so on.
But revenue per marketing channel? They don’t know it. So calculating the return on investment for each channel becomes impossible.
Organic search is often the biggest traffic source - but is it the most profitable? Conversely, do revenues still come in without advertising? These are the things that every CMO needs to know.
How to Set Up Your Marketing Analytics Right
Once you set up your marketing correctly, all of your attribution problems will melt away.
Step 1: Track Individual Users, Not Website Traffic
Website traffic is important. I won’t deny that. But ultimately, it doesn’t matter how the traffic looks. What matters is what the people driving the traffic do.
This is why your marketing analytics platform needs to track individual users.
Once you have the technical capabilities to track individual users, segmenting groups of them and putting together funnel reports is easy. It’s just the aggregation of many different users.
With Woopra’s platform, a unique identifier is created for each user on your website. In the beginning, you may not have any data associated with that anonymous user.
But after they start interacting with your marketing, you’ll start to gather information. Once a user creates an account, that data gets automatically synced to the user profile.
This allows you to see how that person interacts with your website, product, marketing, or customer support.
Which marketing channel(s) brought them in? How long were they on the website before converting? Which pages did they visit?
How often do they visit their account after creating it? Did they open any customer support tickets? How much are they spending with you? What products are they buying?
You can know all this and more with the right analytics capabilities.
To avoid the same problems that Google Analytics has, you’ll want to choose a marketing platform that doesn’t sample your data, but lets you see 100% of it.
On a similar note, if your website data privacy is important to you, then you’ll want to go with a marketing analytics provider that doesn’t sell or share your data.
(Hint: Google Analytics is free because they monetize your data on their ad platforms).
Step 2: Sync All of Your Marketing Platforms with Your Analytics Software
The reason that marketing data tends to be siloed is that it’s not brought into one place for visualization and analysis.
You start by putting the analytics code on your website. Then you put it in your software product/web application and your mobile app.
Now that you can track individual users across your whole experience - while they are logged in and logged out - you can see their whole customer journey.
As we already discussed, you need to integrate your other marketing platforms to see what users are doing in other places.
It’s worth noting that UTM parameters on tracking links are helpful for any organization looking to better track ad campaign performance. You can read more about how to set those up here.
Step 3: Create Dashboards and Visualizations
Now comes the good part. With all of this data at your fingertips, you need to create the visualization flows that matter to you.
These could include conversion flows and funnel dashboards:
Website traffic is still important:
Revenue is too!
Most organizations like tracking the following marketing metrics:
- Total revenue
- Revenue by marketing channel
- Revenue per customer
- Customer churn rate (for subscription models)
- Total new sales
- Total new customers acquired
- Customers acquired by marketing channel
These are just a few examples to give you ideas.
Step 4: Set Up Triggers and Automations
The end goal of a great marketing strategy goes beyond driving sales in the now. It’s about creating a revenue-driving machine.
You need automated systems that scale far beyond the input of the humans maintaining that machine.
Marketing automation platforms do a great job of automating email and SMS text marketing flows based on user interaction with your website, emails, or texts.
But with a modern marketing analytics platform, you can go far beyond that.
One popular automation involves sales team notifications.
Highly engaged product users can be automatically identified based on engagement. This can trigger a new automated email sequence inviting the user to try out new and better product features, and flag that user to a sales professional via Slack message.
You can automate manual processes, like report creation.
Or automatically add certain users to pre-defined retargeting ad campaigns once they hit a certain level of engagement.
To take it to the next level, sync your retargeting campaigns to your automated email lead nurturing series, so that potential customers receive coordinated messages across multiple media.
Don’t leave out customer support - automations can alert them to customers that are at a high potential for churn.
Step 5: Integrate Your Marketing, Unify Your Company
The net result of great marketing analytics isn’t just an increase in new customers. It can also help you retain the customers that you already have.
If done correctly, your:
- Marketing team drives more conversions
- Sales team gets more (and better-quality) leads
- Customer support team becomes more effective
Tech stacks and companies that are this well-run take some work to set up. They don’t come in the form of free, out-of-the-box solutions.
I believe that at its best, technology brings people together. Which is why quality analytics platforms can help become the glue between the siloed departments.
Channel marketing, product marketing, sales, and customer service people all need to work in sync to 1) get new customers and 2) make current customers happy. That happens when accurate, timely data becomes useful information.
And useful information becomes profitable action with quality analytics.
Check out the other articles in our Marketing Analytics series: