Understanding data analytics and its impact on digital marketing

There were times when data analytics and digital marketing were two separate things. People who worked in the field of digital marketing believed that math and statistics will never be part of this job. They were far from reality. Data analytics has not just appeared in this field but gained a crucial aspect of it too. 

If it may not be clear to you what data analytics is exactly, let me explain to you: data analytics examines raw data, to find trends and draw conclusions about them. Conclusions can help the firm find issues and replace them with the correct solution. Here, they can increase the number of satisfied clients, which also increases their selling rate numbers, improves their conversion funnel, and last but not least, their profit too. 

Table of contents:

1. History
2. The Importance of Data Analytics in Digital Marketing
3. Challenges and considerations data analytics may face in digital marketing
4. Summary

1. History

As I wrote earlier, the connection between data and digital marketing hadn’t been organized at the very first minute. 

Although digital marketing websites had already appeared on the internet in the early 90s, they couldn’t track anything for a very long time. They made advertisements, but they could only make assumptions between the number of users who can see the ad and the number of users who actually buy the product in the end. So, this wasn’t an effective way, as if there were an issue with the conversion funnel, they used to let it unrepaired, as they wouldn’t have found the exact cause without a large data set. 

Later on, Webtrends, Ulchin and other companies had already made some web-analytics programs at the end of the 90s. However, these were both expensive and limited. The situation only changed when Google appeared in the market with its very new Google Analytics tool. They developed it in 2005, surprisingly, they provided it as a free-to-use option. This way, all sites had been getting access to the tool as of now, many of them have never worked with any web-analytical sites before. Small and medium-sized businesses have realized how analysis can boost their conversion rate in a matter of minutes. 

The second “boom” of this market happened when social sites like Facebook and Twitter gained some publicity from the year of 2009. Business owners, who used to think that the internet won’t be popular, started to use it on a daily basis. The more they used it, the more ideas they got about how they can advertise their products effectively. When there was a demand to track social media statistics somehow, quickly the supply part of the demand-supply curve occurred. More advanced analytics tools appeared than ever, which precisely tracked social media performance and user engagement. 

As you can see, there were some huge milestones in how digital analytics went into digital marketing, but none of them were as influential as the appearance of big data. The name of big data is overall all the data that once appeared on the net. It can include texts, videos, or images, and it can be structured, semi-structured, or unstructured. But the most important thing about it is its size: we usually measure it in petabytes! This value is usually very precious for sites, as by analyzing these data sets, they can get a deeper knowledge of the customer’s behavior, or even market trends. 

There is no exact date when big data started to influence businesses, but one thing is sure: the increase of big data hasn’t ended yet. Research showed that in 2019, 90% of the available big data files have been created in the previous two years. 

Source:https://www.freepik.com/

The next milestone can be automation, when we don’t need a data analyzer, as the AI could sort the data, can make graphical representations, and understand the whole process. From my perspective, we are not that far to reach it, although it will take some years to accomplish, don’t be afraid. 

2.  The Importance of Data Analytics in Digital Marketing

From my point of view, data analytics has 3 separate huge benefits in digital marketing, which have helped the improvement of this field of life in the last 20 years. Let’s see the three types of advantages:

Measuring the effectiveness 

This is regularly true in marketing campaigns or other campaigns. We can predict both the probable effects of an upcoming campaign, or we can analyze the consequences after it all happened. Digital marketing is all about efficiency. Sites usually have more raw data than brick-and-mortar shops, so you better take advantage of it and use it for your own benefit. 

One of the best weapons to preserve the efficiency of a marketing campaign is making KPIs. KPI is an abbreviation that means key performance indicators. It is most useful to introduce shortly before the start of a campaign. In this case, KPIs are your goals translated into numbers, which can measure how well you accomplish your campaign day by day. It’s like a checking procedure to ensure that your strategy is working well. 

Let’s see it through an example: the objective of your campaign is to achieve 1000 separate purchases on your site – it is a KPI as it is a metric, measures performance, but also hugely important because your whole company’s future can depend on it. Also, it is a one-month period campaign in this case, so you better check your goals regularly, not just at the start and the end of the procedure. Here, you can also add some other KPIs which ensure that your whole campaign goes in a straightforward path, not a slippery one. 

Source:https://www.freepik.com/

Understanding your target audience better

Back in the times when there was no internet, it was a tough task to analyze your potential buyers. They just went to a shop, bought the product they wanted, and left the shop. However, the state of mind of the buyer was a secret. What was he thinking when he entered your shop? Was he satisfied with everything?

Nowadays, there are many ways you can gain information from your target audience even before you start to sell them something. You can track how they explore your site, where they click first, or how their cursor goes from one place to another. Also, you can track the users’ interests from your social media accounts. How they react to each post, how can you engage them, etc. Also, if the company is not sure about something, making a survey is always an option to ask the consumers in a qualitative way that your data analytics are working well. 

Improved customer experience

One of the best moments a site can achieve has to be when its clients are happy with the amount of effort the site puts into the joy of a user. The most fascinating thing about this is that nowadays, from raw data, a website can easily find out what their client’s needs are, and they can easily reorganize everything to pass the potential buyer’s requirements. Also, it could lead the shop to other very positive effects: the decrease of conversion funnel friction, increased KPI percentages, or better selling rate numbers. 

3. Challenges and considerations data analytics may face in digital marketing

There are some major and minor issues in connection with data analytics that can harm either the potential buyers or the website itself. In this section, I try to present some of these issues that may occur.

  Privacy concerns 

In Europe, the GDPR laws try to regulate how websites can gain their visitors’ data and how they use it later. But, there are other organizations throughout the world that try to defend users’ privacy. It is a very hot topic, as data theft is very regular in the online world and after just a few thoughtless clicks, a visitor may give access to all its personal data to a site. 

Companies also make measurements from the gained data, which they use for their own benefit, for example, to make better conversion funnels. From the given data, they analyze the habits of their potential buyers, their decision-making and their behavior. Whether you think it is ethical or unethical, that’s how these websites can arrange a user-friendly platform, so they tend to say that these are not just their interests. It is practical for both sides! However, if the laws are getting stricter, and fewer data can go to websites, these analyses would be inaccurate.  

Source:https://www.freepik.com/

Technical expertise 

Many websites suffer from the lack of analyzers who can actually understand what the calculated data means. As it is not as simple as you may think. You may have the software for the capability of analyzing trends, but it requires mathematical and statistical skills to interpret the data. Moreover, nowadays, without writing programs and codes to use all the benefits of the software you buy, you also need a good and qualified computer scientist. Also, you may have to know someone who can make graphical representations from the given data, so it is so much easier to explain the overall results. So, as you may have realized, it is a little more complex than most of us think. 

Using some technical expertise is a key factor that can determine how successful your data-driven site will be exactly. 

 Data quality and accuracy 

Inaccurate data may occur because of several factors. A human mistake, data drift, or even data decay. The quality and relevance of the data may be less from time to time, so it is important to use your gained data as soon as possible. Like I referred to it, outdated data is usually very deceptive and negatively affects your decision-making. If you falsely believe in something, it can drive you to very dangerous places. For example, to a conversion funnel friction, where you have already lost some of your clients. 

Source:https://www.freepik.com/

4.   Summary

As you may have noticed, it was a very long road, whereas people connected data analytics with digital marketing, and it took a long time to admit, data analytics has reached an important role in digital marketing. Businesses must save some money from time to time and with well-used data analytics, it is a very easy task. Businesses can predict how their potential buyers will react to their upcoming campaigns, track their progress in the middle of campaigns and last but not least, they can measure success rates after the campaign periods. 

However, there are also a number of issues that may occur in connection with this:

1. How do sites use their clients’ private data? 
2. Should sites trust their data every time? 
3. The lack of data analysers businesses have 

From my point of view, the improvement of data analytics in digital marketing was responsible for the faster replacement of brick-and-mortar shops. Although I think these physical shops will never fade away, their popularity has highly decreased. It is partly due to the usage of internet big data, as this is available for all the e-commerce sites, but for brick-and-mortar shops, it is significantly harder to use it successfully. 

I believe if businesses use big data more precisely, and with more efficiency, more and more people will try their luck in the E-commerce sector. I am very curious about the appearance of AI in this sector, and whether it can boost their selling rate numbers, with better predictions and analyzing methods. Also, if the AI presence leads us there to that point, you don’t have to worry about your conversion funnel again.