What is Marketing Analytics? Definition, Benefits, Tools, and More


In the pursuit of digital transformation, more and more marketing teams are looking to take advantage of what could be their organization’s greatest asset: its enterprise data. According to a 2019 survey, spending on marketing analytics is expected to grow by 61 percent in the next few years, from 7 percent of marketing budgets to 12 percent.

But what is marketing analytics exactly, and what does it have to offer your organization? In this article, we’ll go over everything you need to know: the definition, some of the most important benefits of marketing analytics, and the best marketing analytics tools and metrics to use.

What is Marketing Analytics?

Marketing analytics is the use of quantitative methods to analyze marketing data, helping you make smarter data-driven decisions. The goal of marketing analytics is to:

  • Calculate the impact and return on investment (ROI) of various marketing activities.
  • Identify new opportunities, channels, and markets before your competitors do.
  • Understand the behavior and desires of your customers and prospective customers.
  • Monitor trends over time, and predict future results based on historical data.

Operating based on gut feelings is often not a bad way to go, but it can only get you so far—and it won’t help you find patterns in data sets that are too large for any one person to process. What’s more, key decision-makers such as managers and executives will be reluctant to sign off on a new idea unless you have solid proof of its plausibility.

That’s where marketing analytics comes in. Marketing analytics advances the field of marketing from an art to a science, removing the guesswork from the equation in favor of evidence-based arguments. By offering cold, hard data and cutting-edge insights, marketing analytics helps you make the right choices for your organization.

4 Benefits of Marketing Analytics

According to the management consulting firm McKinsey & Company, marketing analytics can have enormous benefits for organizations of all sizes and industries. A McKinsey study of 400 companies found that integrated marketing analytics can free up 15 to 20 percent of marketing spending.

But what are the benefits of marketing analytics exactly? In this section, we’ll discuss 4 ways in which marketing analytics makes you more productive and profitable.

1. Better understanding your customers

If you want to understand what truly makes your customers tick, marketing analytics can help you get inside their heads (or as close as possible without needing an MRI). Marketing analytics offers a 360-degree view of your customers by collecting as much data as possible, from their first contact with your business to their most recent purchase. Different ways of segmenting your customers, such as behavioral and demographic segmentation, can help you deliver the right messages to the right people.

Organizations that know more about their customers are more likely to keep their customers happy—and do better for themselves as well. According to McKinsey: “Companies that make extensive use of customer analytics are more likely to report outperforming their competitors on key performance metrics, whether profit, sales, sales growth, or return on investment.”

The benefits of customer analytics include:

  • Delivering effective, personalized messages that are more likely to convert.
  • Increasing customer loyalty, engagement, and positive word of mouth.
  • Reducing churn rates and raising customer retention.

2. Outperforming your competitors

Of course, converting and retaining more customers also means that you’re in a better position to beat your business rivals. Marketing analytics can help you identify emerging trends and ideas before they hit the mainstream, getting the jump on your competitors.

Just as marketing analytics can be applied to your own marketing campaigns, you can also apply it to your competitors. For example, competitor analysis can help reveal your rivals’ strengths and weaknesses, find interesting strategies and campaign ideas, and identify opportunities for poaching customers.

If you don’t keep up with a robust analytics program, the fate of your business could be at stake. The well-known decline of Kodak, for example, happened after the company made poor strategic decisions and failed to prepare for the rise of digital photography, which competitors like Canon and Nikon embraced.

3. Measuring your performance

You might be completely satisfied with the marketing campaign for your latest product—but the real test is how your target audience responds to it. That’s where marketing analytics comes in, collecting people’s reactions and responses to your marketing efforts through quantitative and qualitative information.

Marketing analytics measures the business impact of your marketing campaigns, so that you know precisely how well each campaign is performing. Selecting the right metrics and KPIs for marketing analytics will be highly rewarding when it comes time to crunch the numbers. Later, we’ll discuss some of the best metrics and KPIs for marketing analytics programs.

4. Deciding how to allocate resources

Even the biggest marketing department has a finite amount of resources at its disposal: employees, budget, technology, etc. But how can you distribute these resources in an optimal way (or as close to optimal as humanly possible)?

Marketing analytics can provide the answer: previous performance should match current investment. In other words, people and campaigns that have done well in the past should be prioritized when allocating resources for future marketing activities.

3 Types of Marketing Analytics Tools

With the many benefits of marketing analytics come great power and responsibility. To create an effective marketing analytics program, you’ll need a robust suite of tools at your disposal. In this section, we’ll go over 4 types of marketing analytics tools that you should consider adding to your arsenal.

1. Website analytics tools

Website analytics tools are almost as effective as watching over your customers’ shoulders (without being quite as creepy). Event-based analytics tracks people’s clicks and actions as they navigate through your website, helping you understand each customer’s journey from start to finish. For example, when presented with an overlay that advertises a sale on your website, what percentage of customers click through to look at the sale items?

There are a wide variety of website analytics tools, depending on which behaviors and actions you want to measure. Website analytics tools can measure how long customers spend on each page, tell you which search terms they entered to get there, and even generate a “heatmap” of the cursor activity on a specific page, showing which areas customers tend to focus on.

2. A/B testing tools

A/B testing is an invaluable practice for marketing analytics. During A/B testing, customers are segmented into two or more groups, each of which is presented with a different user experience (unbeknownst to them). By measuring the behavior of each group, you can determine which alternative is most effective for your purposes.

The applications of A/B testing are endless: the text of your headings and calls to action, the website’s design and layout, the logo of your business, and even the color of a particular button. A/B testing is a powerful technique, but you need to use it the right way. For example, the more elements you squeeze into a single test, the harder it will be to understand the motivation for any particular success or failure.

3. Digital marketing analytics tools

The Internet is a big place, especially for marketers. Digital marketing campaigns may comprise a variety of channels: social networks like Facebook, Twitter, YouTube, and Pinterest; search engine optimization (SEO) for Google and other search engines; platforms for display ads and search engine ads; and much more.

Capably dealing with so many channels will require you to master a number of tools for digital marketing analytics. For maximum productivity, the best teams will have to integrate these tools—both with each other, and with other technologies like CRM (customer relationship management) software.

3 Marketing Analytics Metrics and KPIs

You can have all the data in the world, but it means very little unless you choose the right ways to slice and dice it. Metrics and KPIs (key performance indicators) are the building blocks of marketing analytics. These are measurable values that offer a quantitative assessment of how well you fulfill a specific business objective.

There are many possible metrics that you can incorporate into your own analytics program, so we can only offer a brief overview here. Below, we’ll discuss 3 metrics and KPIs that you should seriously consider for your own marketing analytics workflow.

1. Clickthrough rate (CTR)

Clickthrough rate (CTR) is one of the easiest marketing analytics metrics to understand: it measures the percentage of people who click on a link, ad, or email. This metric roughly corresponds to the percentage of your audience interested in learning more about your products and services.

2. Engagement

Engagement is a category of metrics that measures how much users are interested in, or engaged by, your content. This type of metric is most commonly applied on social networks where people can easily interact with your business. Engagement metrics include:

  • The number of users who approve of your content (e.g. likes, favorites, retweets, etc.).
  • The percentage of your followers who engage with your content.
  • The percentage of viewers who share your content (also known as the virality rate).

3. Website traffic

Website traffic metrics give you more insight into how users behave while visiting your website. The most important website traffic metrics are:

  • Traffic sources: Useful for knowing what search terms people enter to find your website, or for knowing whether an influential figure has shared your content.
  • Bounce rate: The percentage of users who leave your website immediately after viewing a single page.
  • Average time on page/on site: Users who tend to linger on your website, or on a particular page, are more likely to be interested in your content.
  • New vs. returning visitors: A large proportion of new visitors is a good sign when you’ve started a new marketing campaign. On the other hand, having a large number of returning visitors likely means that you have a steady base of loyal customers. 


Marketing analytics is an essential practice for marketing teams and organizations that want to make better use of their enterprise data. By asking the question “What is marketing analytics?”, you’re already ahead of the curve.

Looking for more information on marketing analytics? Follow the IronFocus blog for the latest articles, news, and updates. If you need help implementing a marketing analytics program for your own business, get in touch with IronFocus today. Our team of experts has helped countless clients optimize their marketing funnel and make smarter, data-driven decisions.


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