Why Marketers Struggle To Understand Analytics

Author

Kavi Guppta, Contributor

November 17, 2014

I want to understand why marketers struggle with digital analytics. I’ve spent close to a decade helping companies navigate digital technology; and at the heart of my work, there has been an emphasis to properly measure and account for my efforts.

I’ve learned that it doesn’t matter what industry I’m working with—travel and tourism; consumer electronics; healthcare; food and beverage; or small tech startups—every company struggles with the same problems when it comes to their measurement process. Not necessarily the tools they use, but the fundamental basics of business and marketing measurement.

So, why do marketers struggle with digital analytics?

I posed the question to two people who spend their days obsessing over measurement via digital platforms, to help me make sense of the madness.

Brent Dykes is an analytics evangelist for Adobe, and author of Web Analytics Kick Start Guide: A Primer on the Fundamentals of Digital Analytics. My other talking head is Sachin Kamdar, CEO of Parse.ly—a web analytics platform for publishers.

In the conversation below, Brent, Sachin, and I ruminate on the three areas every business faces when measuring their digital efforts.

Businesses don’t know what they want from their online platforms

“Many organizations struggle to keep on top of all the moving pieces—technology, content, campaigns, channels, partners, etc. Sometimes I wonder how much thought has been put into what these companies really want to accomplish online,” says Brent.

Both Brent and I have attended many meetings through our careers where digital teams could not articulate what their key business objectives were. If you can’t tell me the purpose of your business beyond the online world, then you don’t have a business. I’d say you just have a string of fragmented ideas of what your business wants to be. I think the broader problem is that most organizations are online because someone said they had to be.

Sachin says that the media industry in particular hasn’t figured out the right metric, “because they haven’t figured out the right business model for digital. Though there have been runaway successes (Buzzfeed, Vice), many media companies know that the current model won’t sustain them, but don’t have an alternative solution.”

“Metrics as a goal in and of themselves, should be secondary, with the focus now on understanding what they’re saying about how to create the right business.”

The three of us agree: you can’t find the right metrics to measure, until you have the right business to run. Most companies aren’t even setup to be a viable business in the Internet era. Most companies complicate the one thing that matters above everything else: a product people will want to buy.

If you don’t have the product, then all you’re doing is measuring the amount of money you’ve spent chasing nothing.

Businesses are too obsessed with awareness metrics

I’ve spent countless, frustrating hours convincing marketing teams to look beyond awareness tactics and media spends. In my experience, businesses allocate an overzealous amount of their budget on getting people to their online destination. The rest of the experience where the customer will make their purchase decision, and potentially return, is given fewer resources to function properly. It’s a backwards function, as the most important part is not given the attention it needs for success.

Sachin says that marketers aren’t asking the right questions beyond the awareness metrics like page views, visits, and readers. Specifically he points out,  “You’re missing a TON of information in-between! What did they read? What type of stuff did they buy? Have they come before? Are they new? What are the characteristics of the repeat buyers? What made a new visitor purchase something? Analytics platforms need to enable this type of analysis or even do it directly.”

I had also proposed this idea in my piece on how we can change web analytics. If marketers aren’t asking the right questions, can we create software that nudges teams in the right direction? Marketers should be analyzing customer behaviors like this from the outset, and automating such tasks could, dare I say it, render the marketer obsolete (is that really a bad thing?). The problem is that many teams have never been trained in this type of analysis. Even worse, the majority of teams are isolated from their counterparts in operations, product management, and customer service. Nobody is working together.

Brent’s point on higher accountability offers some solutions. “C-level executives need to hold their marketing teams more accountable for contributing to overall business goals,” he says. “Marketing KPIs can’t be disconnected from the company’s bigger picture. At the end of the day, the mindset shift will occur when they’re accountable for what’s coming out the bottom of the funnel—not just what’s happening at the top.”

That’s some much needed tough love. I wish the media buyers—people who purchase space to display ads: banner ads, television ads, radio ads, etc—heeded Brent’s advice.

Facebook recently announced that in order to advertise on its platform, marketers would have to pay more to reach an audience. This isn’t news. If you want access to a billion people, you better be willing to pay for it, and you better have good content that connects. It’s how television networks make a ton of money selling ad space for the Super Bowl.

The unfortunate element is that brands will continue to fork out billions of dollars in low performance advertising to connect with potential customers. But it’s what Jordan Bitterman, Mindshare’s North American chief strategy officer, said about the change that made me shake my head. He says that Facebook continually makes it harder for marketers to use its platform effectively, even more so when it’s content beyond traditional ads.

“One theory I have,” says Brent, “is that it’s a remnant from the days of traditional advertising via TV, radio, and print. Historically, these channels have always had a heavy emphasis on audience reach and awareness generation. That aspect was easier to measure. I wonder if it has just become too familiar and routine for companies and their ad agencies to concentrate most of the marketing budget in this one area.”

Which leads us to the last point in my journey.

Businesses struggle to change old habits

I firmly believe that thoughts like Bitterman’s are a wider problem in an industry struggling to stay relevant with new mediums and channels. It’s an old habit of humanity to blame the technology being used for our own faults. Rather than looking at the nature of the advertising, or building a product that customers want, marketers—especially media buyers, who are measured on their ability to “bring traffic to a destination” through “awareness”—choose to blame the platform. Nobody likes to admit they are wrong, and it’s easier to make technology the scapegoat for our misguided experiments.

Remember how I said that nobody—from the product, to the call center, to the marketing team—actually works together? This is an example of that. The majority of big companies are unable to shift their processes and reshape old habits into productive modern ones. Instead, we have a mediocre product, or lack of a proper business (like Brent and Sachin said earlier), and marketing machines that are just throwing money into the wilderness in the hopes of attracting anything. I’ll be fair because startups fall for this trap as often as their larger, corporate counterparts.

“Digital media has inherited this same mindset, and it’s difficult to change even with digital channels offering more measurement options,” says Brent.

But Sachin disagrees. “I think it’s just a consequence of how the Internet has evolved and not necessarily tied to media. If you remember way back when this whole internet thing got started, site counters became the primary way that you measured your site; which evolved into pageviews, visitors, time, etc.”

Sachin adds that most analytics tools are setup to measure ecommerce, and not media. I agree with that. Not every business is shuffling customers into a platform to make a direct purchase. But I don’t agree with how digital metrics have evolved. I think the industry just repackaged the same awareness metrics to represent new channels.

Marketers are too focused on a one-size-fits-all solution because that’s what the industry has always used. But it doesn’t work like that anymore. The one component that always stays the same is having a business that customers care about. Beyond that, Sachin adds, “the evolution of analytics will be systems getting more specific, not relying on other industries, media, or otherwise, as a status quo.”

So, how a news company looks at page views will hopefully evolve into a different analysis for a healthcare company with a digital service. A consumer electronics manufacturer might look at time-spent-on-site differently than a restaurant because they have different goals in attracting customers to their sites.

Marketers need to look at analytics as it pertains to their business. That’s an opportunity I think analytics providers are missing out on right now. Everyone measures the same way and it’s not helping anyone.

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