By Glenn Granger, CEO, marketingQED
American statistican William Edwards Deming once said that “learning is not compulsory... neither is survival.”
A perennial problem for marketers is understanding exactly which parts of their marketing mix spend is being allocated correctly and which parts are being wasted. As marketing budgets continue to be squeezed and the choice of media options continues to expand, it is becoming increasingly important to make sure none of this spend is misdirected.
In order to get the best value from marketing spend, and determine what elements of your marketing activity are working (and those that aren’t), marketers need to think hard about how they can measure ROI and forecast future performance.
Using quantitative evaluation techniques, marketers can ascertain which elements of their marketing mix are making the right impact.
The challenge lies in knowing what information (or data) you need to gain the understanding your organisation requires from quantitative analysis. To do this we need the right, high quality, data.
Glenn Granger, CEO of adaptive modelling technology specialist, marketingQED, offers top tips to help you identify what really matters, and how to prepare your data for quantitative analytics.
What is quantitative marketing?
Quantitative marketing is the incorporation of data and analysis into the decision-making process. It relies on the utilisation of factual data to determine the effectiveness of key elements of the marketing mix, rather than basing decisions on prior experience, or even just gut-instinct.
The fundamental pre-requisite to adopting a quantitative approach is access to historical data. Quantitative marketing depends heavily on algorithms which use historical data to forecast future outcomes. Choosing the right data can prove to be a major headache, with large consumer marketing companies often having the opportunity to collect many terabytes of stored data in a single month.
What data should marketers collect?
It is of course possible to collect data about every aspect of your marketing - from the likes of sales figures, to the ‘opportunities to see’ of a print campaign. However, the sheer quantity of what could be collected is massive so we need to be selective.
Obviously it is hard to know what marketers should be accumulating but there are three important aspects to remember when collecting and preparing data for quantitative modelling
- Store the data in a format that allows you to access and utilise it easily, and make it as accessible as possible
- Ensure that a `corporate memory` is created that can contextualise the historical data
Choosing the correct data
The most important information that needs to be stored is the inputs and real world outcomes of marketing campaigns. The main outcome is, unsurprisingly, the sales data against which everything else is cross-referenced. However, depending on the aims of a particular campaign, it could also be downloads, website hits or brand awareness.
The inputs include a wide range of data points, such as advertising spend across various media like TV or online, and promotional activities such as offers and POS activity. It should also include data on other factors such as public relations, social media and even competitor actions. A great way to work out what your organisation needs is to think through the four key P’s of marketing – Price, Promotion, Place and Product, and work out the available data on each of these elements.
One pitfall to avoid is mistaking accountancy data, (i.e. when activity was paid for) with when activity actually took place. Little inaccuracies such as these should be minimised in order to maximise the accuracy of the analysis.
How should marketers store data?
As well as storing the correct data, the way in which it is stored is important. It is not enough to make the data available to staff via an abstract database run by the IT department. Rather, it has to be readily available and access should be free of too much administrative red-tape.
Whether data is stored in a database or less formally in spreadsheets, it is vital to remember that it needs to be labelled clearly, free of jargon.
Contextualising data with a strong corporate memory
Quantitative analysis can be a powerful tool but it is important that the context of the campaigns you are analyzing is kept front of mind. This contextual data is not something that can easily be stored in a database of numbers. Instead we have to record this data in a different way. A great way to start collecting this is to ensure that for each marketing activity, a short briefing document is created before and after the activity has taken place. This document should capture data on the rationale behind the campaign plus any creative materials that are being used. This will help alleviate some of the head scratching that will no doubt happen in a few months’ time when quantitative analysis reveals the effectiveness of the action and corporate memory is lost through staff moving on.
Analysing the data
So now you have your data, what next? There’s a range of options you can take, from basic tracking of KPIs through to advanced adaptive modelling and forecasting. The quickest and easiest way to make data really valuable is to plug it into marketing mix analysis software and allow the software to reveal what’s actually been working. However, this might not be an option for all marketers. In which case, charting and visualising data is the best place to start. This can reveal broad trends in campaigns and offer a record of activity and results. That said, full quantitative analysis and forecasting should be the end goal, and readying your data is the first step towards this.
Quantitative analysis is clearly taking off in marketing and, despite initial periods of skepticism, the discipline is replacing gut-instinct with often counter-intuitive hard facts. Whether your organisation regards this as an essential exercise today or whether you’ll be looking at this in a few months’ time, you’re going to need to get your house in order when it comes to your data. Without the data, there are no facts for analysis-let marketing take off!
Top tips to preparing for quantitative marketing
- Don’t drown in data – Don’t feel that every available piece of data must be collected at the lowest level
- Cover your bases - Ensure your data covers not just your marketing mix but also other factors such as competitor actions or social media
- Share the data - Don’t just make your data technically available, make sure it’s genuinely accessible
- Context matters - Go beyond the numbers – find a way to ensure that you know why things were done in the past and store this alongside your data – it’s vital for future analysis
- Act - Once you’ve discovered something, act on the information to improve marketing effectiveness. It’s surprising how rarely this
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