If you’re trying to optimize marketing spend, you can approach it in one of two ways: macroscale or microscale, forest or trees.
They’re both useful, but when you’re building a marketing analytics program — or even if you’re just trying to make your existing analytics better — it’s more important to start with the macro.
With a macro approach, you begin by looking at the big picture. How much did we spend, and what happened as a result? If you want to get a little fancier, you can break out spending by channel.
All you’re trying to accomplish, at a fundamental level, is answering a basic but vital question — is my marketing spend doing what I want it to do, i.e. helping generate revenue for my business?
Is this a sexy question? Absolutely not. Which is why so many marketers would rather focus on micro questions when they get started with marketing analytics.
Don’t Focus on the Bark
A lot of new-to-analytics marketers want to know what creative performs best on specific channels for a specific audience segment. Or they’ll immediately want to see what combination of messages and ad networks created a specific customer.
These are interesting (and super-nerdy) questions to ask. They can give you valuable insights into your campaigns, so you can optimize marketing spend, strategy and creative.
But it takes a lot of time and energy to reach that level of granularity. I’ve seen marketers get so laser-focused on tracking every detail of every campaign to the nth degree — focusing on a single piece of bark on one tree — that they lose their ability to notice larger, more important trends in their campaigns.
Maybe they get obsessed about refining their social messages and totally overlook the fact that, uh, social is a really crappy channel for their particular audience. They waste time and money obsessing over Facebook when their biggest opportunities are in search or email.
Discouraged, they decide that “analytics doesn’t work” and give up. When in reality, they weren’t using analytics correctly in the first place.
The Right Way to Optimize Marketing
Here’s what you should do: Start by creating basic visibility into your campaigns. You should be able to see what you’re spending on each ad network and platform and what happens as a result. Ideally, you should be able to analyze results by campaign or by channel (social, search, display) in a dashboard that’s updated daily. At Alight, we call this Level 1 analytics.
Once you’ve got that in place, you can move on to Level 2, where you align your reporting to a funnel or pipeline view. That way, you have a clearer idea of how awareness and engagement affect the number and quality of new contacts you’re generating.
Level 3 is where you get into detailed campaign tracking and start to use attribution models. Now you can get really granular with marketing optimization.
We wrote a post about this process that we call the Marketing Analytics Maturity CurveTM. It’s a great place to start if you’re figuring out what you should do next with your analytics practice.
Whatever you do with your marketing analytics, remember to start with the big picture. The biggest questions tend to be the most important ones to answer.
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