The science of marketing analytics has never been more important for business, Adimo looks into 3 predictions for marketing analytics in 2021 and how they will impact the marketing landscape...
For decades, marketing was seen as an art, rather than a science. We knew a good ad when we saw one, and we assumed that sales were driven by campaigns. If they weren’t, why did every single company advertise? The popular podcast Freakonomics recently investigated the topic, to the chagrin of marketing firms and experts around the globe. But as ever increasing numbers of purchases migrate to online platforms, we are in a position where we can increasingly identify precisely where, when, and how marketing messages drive sales. As internet search and purchasing data give brands real-time insight into the decisions consumers make, brands can use marketing analytics to optimize the efficiency of every dollar of adspend. And 2021 is likely to be a banner year for analytics, as brands around the globe dramatically increase their investment in data analysis. Let’s take a look at 3 trends that will impact this rapidly expanding field of study this year.
Predictive analytics take advantage of machine learning to build predictive models based on historical data. There are “look-alike” models to determine which consumers are likely to become loyal, long-time buyers of your products, and which are most likely to churn. There are affinity score models, which gauge the interests and lifestyles of prospective customers based on their browsing and purchasing histories. Predictive analytics can also have a dramatic impact on the supply chain. Models can forecast events, trends, and conditions that are likely to affect consumer behaviour.
A much-touted study by Zion Market Research in 2018 concluded that global investment in predictive analytics could reach $11 billion dollars by 2022. With the pandemic pushing millions of transactions into eCommerce, the amount of data that can be harvested and exploited by predictive models has increased exponentially, and the wealth of data should fuel a cycle of massive growth. In the retail industry, predictive analytics will offer brands an opportunity to follow their customers in real-time and determine the precise moments when incentives or information will result in an increase in sales.
While getting started on predictive analytics isn’t an easy task, it’s an investment every business needs to make. Once a model is put to work, it will yield years worth of valuable results, and its returns will only increase over time as more data is applied. As CIO magazine concludes, it’s best to begin with a pilot project in an area that’s extremely important to your business “to cap start-up costs while minimizing the time before financial rewards begin rolling in. Once a model is put into action, it generally requires little upkeep as it continues to grind out actionable insights.”
The eulogies for 3rd party cookies came when Google joined Firefox and Safari in announcing that they’d be banning or phasing them out by 2022. These cookies, which tracked web users across sites had been the foundation of the digital marketing industry, but with increased concerns from both legislators and consumers about privacy and data safety, they were deemed unethical and intrusive.
Without 3rd party cookies, brands and marketers will need to improve the data collection techniques on their websites and sales platforms. They’ll also need to build networks that share data collected by other platforms in order to gain well-rounded and actionable portraits of their customers. As experts at Snowflake marketing put it, brands will “need to assess their tech stack to understand how data is collected, examine their marketing attribution models, take stock of their first-party data and whether it relies on cookies to be activated, and review their optimization strategy.”
Brands will lose out if they rely on marketing partners and sales platforms that don’t allow full and timely access to the data-sets generated by clicks and sales. The bans on 3rd party cookies will make multi-touch attribution and retargeting ads a lot more difficult. But in order to thrive you’ll need to master new approaches to these essential components of digital marketing.
Marketing budgets took a huge hit from the COVID pandemic. Statista reported that spending last year was $20 billion lower than forecasts had predicted, and the IPA’s Bellwether Report noted that 30-40% of executives stated that they were going to spend less on marketing in 2021. While analytics should be somewhat insulated from these blows due to their perceived value, it would be a mistake to take anything for granted going forward.
It’s incumbent on both marketers and brands to determine the actual value of all of their marketing campaigns, and optimize their approaches to ensure that they aren’t wasting a penny. This could be good news for smaller, and digital-first marketing firms. As experts at Marketing Week have concluded, we should expect brands who cut their research budgets to “be compelled to get at least three quotes, and everyone will be looking for the best value way to get a decent piece of work. Many will try smaller, independent providers that have lower overheads.”
The focus on value will ultimately be a boon to marketing analytics, as the growth of eCommerce and the computing power unleashed by 5G networks make the success of campaigns measurable to a degree that was unheard a few years ago. By using real-time analytics brands can assess campaigns and identify underperforming approaches and messages in a matter of moments. The key will be creating a platform which allows you to quickly process and analyze batches of customer data, or finding a marketing partner who can help you through the process. If you aren’t able to monitor your campaigns and nimbly switch tactics, you’re going to be throwing money down the drain.
We will look back at 2021 as the year when marketing became measurable, as analytics are poised to revolutionize the industry. Impressionistic theories and gut instincts used to be our best tools for determining what worked in advertising, but they’re on the verge of extinction this year. If your business needs help harnessing the power of big data or developing campaigns based on AI and machine learning, Adimo is waiting to hear from you!