Using data to inform marketing decisions is widely seen as critical for marketing success. But recent research has found that most senior marketing leaders are disappointed with the results they've obtained from their analytics investments. Read on to learn what senior marketers are saying about the unfulfilled promise of marketing analytics.
Marketers have been using data to support their activities and programs for decades. And the volume of data available to marketers has exploded in recent years because of the exponential growth of online communications and commerce.
Marketers have recognized that this vast sea of data has the potential to provide insights about existing and prospective customers that can be used to improve the effectiveness of their strategies, activities, and programs. As a result, many marketers have made substantial investments in data acquisition and analytics capabilities.
The Unfulfilled Promise
Despite the increased attention and investment, recent research has shown that most senior marketing leaders aren't satisfied with the results they've obtained from their investments in marketing analytics.
The Marketing Data and Analytics Survey 2020 by Gartner Research was a survey of over 400 marketers. The survey participants were split fairly evenly between producers (those who provide marketing analytics) and consumers (those who receive marketing analytics output). Forty-nine percent of the respondents were in North America, and 51% were in Western Europe. More than 80% of the respondents were with organizations having $1 billion or more in annual revenue. Therefore, this research reflects the perspectives of large enterprise marketers.
In the Gartner survey, a majority of senior marketing leaders - CMOs and VPs of marketing - were unimpressed with the results they've received from their marketing analytics efforts. Fifty-four percent of the senior marketing respondents said that marketing analytics had not produced the impact on their organization that they had expected. The survey also found that analytics only influences 54% of marketing decisions (on average).
The Gartner survey results echo the findings of the February 2020 edition of The CMO Survey sponsored by Duke University's Fuqua School of Business, the American Marketing Association, and Deloitte. In this research, survey respondents indicated that marketing analytics was used in marketing decision making only 37.7% of the time. That was down from 43.5% in the February 2019 edition of the survey.
The CMO Survey also found that marketing analytics has only had a modest impact on company performance. The survey asked participants to rate the contribution of marketing analytics to company performance using a 7-point scale (1=not at all and 7=very highly). In the February 2020 survey, respondents rated the contribution of marketing analytics at 3.9. The same question has been asked in each edition of the survey since at least August 2012, and the rating has not varied significantly over that entire period.
Why Analytics Isn't Meeting Expectations
Gartner's research also sought to identify why marketing analytics isn't meeting marketer expectations. The survey asked participants why they don't use analytics to support marketing decisions. The following table shows the top four reasons identified by the survey respondents.
Of all the reasons shown in this table, I find the first one to be the most interesting. Apparently, some marketing leaders don't use the output of marketing analytics to support decisions when the output conflicts with their intended course of action.
It would be easy to describe this reason as a classic example of confirmation bias. Marketing leaders seek information that will justify the action they've already decided to take, and they ignore any contradictory information.
In fairness, though, more is probably behind this reason. If a marketing leader perceives that the output of marketing analytics is based on poor quality data, or if the output doesn't provide a clear recommendation or actionable insights, he or she may feel justified in ignoring that output.
There's no doubt that data and analytics are increasingly important for marketing success. Unfortunately, these tools - like many other marketing technologies and techniques - have been hyped by vendors and industry pundits, and that hype has contributed to unreasonable expectations. Marketing leaders need to have a realistic view of what data and analytics can and can't do. That's the topic I'll address in my next post.
Top image courtesy of Petr Sejba (www.moneytoplist.com). CC