- 76% of companies believe analytics is a very important skill to have
- Only 39% believe they have strong analytics talent
- That’s a gap of 37% among companies that value analytic skills but don’t have the talent in place (source: Online Marketing Institute)
Analytics is where more companies state they have the biggest talent gap according the OMI Study. The State of Digital Marketing. This is the issue on the surface. But is there a bigger problem that lies beneath?
Analytics is the study of past historical data to research trends and evaluate performance to gain knowledge and effect decisions. The result being to make improvements that create change.
Why do so many companies believe strong analytics solve a problem? Or is this the tip of the iceberg and another issue lies below the surface?
Here are the 5 real reasons analytics is the most coveted marketing skill (with the facts that back them up).
MAKE BETTER DECISIONS: Analytics gets to better business decisions.
- 91% of senior corporate marketers believe that successful brands use customer data to drive marketing decisions (source: Interactive Advertising Bureau/Columbia Business School)
- 72% of executives believe management decision making is only moderately efficient (source: Economist Intelligence Unit)
- 56% of executives are concerned about making poor choices because of bad data (EIU)
- 55% of executive decisions are based on ad hoc consultation instead of corporate metrics (EIU)
- 25% of executives believes management frequently, or always, gets its decisions wrong (EIU)
- Less than 10% of of executives receive the information they need (EIU)
ACCOUNTABILITY: Analytics improve accountability
- 70% of senior executives say they use “what if” scenarios at different budget levels to determine sales and profits (source: Association of National Advertisers)
- 39% of senior management views marketing as an expense (ANA)
- 39% say they are satisfied with marketing’s impact on sales and brand equity (ANA)
- 38% of senior executives agree marketing and finance share common metrics (ANA)
- 34% of senior marketing execs say they were satisfied with their agency’s metrics (brand health, copy testing, reach, frequency) (ANA)
- 20% of senior management feels confident in forecasts of how marketing activities will impact sales (ANA)
- 19% say they were confident that if they had to cut marketing spend by 10%, they could use metrics and analysis to forecast the impact on sales (ANA)
KEY PERFORMANCE INDICATORS (KPI’S): Analytics help identify the right key metrics to create an actionable scorecard that keeps strategy on track
- 90% of CFO’s believe the KPI’s they use are reflective of reality but could be improved (source: Pricewaterhouse Coopers)
- 33% of CFO’s deploy too many KPI’s (more than 20) to be useful
- 33% don’t deploy enough (less than 5) to be useful (PWC)
- 33% think their current set of KPI’s is adequate (PWC)
- 20% plan to produce KPI’s more often (PWC)
- Only 8% think the quality of their source data is excellent
RETURN ON INVESTMENT (ROI): Analytics determine how effectively the business and financials are being managed.
- 87% agree capturing and sharing the right data is important to effectively measuring ROI in their own company (IAB/CBS)
- 57% are not basing their marketing budgets on any ROI analysis (IAB/CBS)
- 51% say that a lack of sharing customer data within their own organization is a barrier to effectively measuring their marketing ROI (IAB/CBS)
- Only 43% of organizations are establishing their marketing budgets based on marketing ROI analysis (IAB/CBS)
- 38% say they were extremely satisfied or very satisfied with their company’s ability to change established marketing strategies and budgets when ROI reports demonstrated they were not effective (ANA)
- 37% of respondents did not include any mention of financial outcomes when asked to define what “marketing ROI” meant for their own organization (IAB/CBS)
- Only 8% of companies can determine ROI for their social media spending (source: Econsultancy)
BIG DATA: Analytics gets us ready for Big Data.
- 90% of the world’s total data has been created just within the past two years (source: IBM)
- 75% of companies say they will increase investments in Big Data within the next year (source: Avanade)
- 65% of companies deploy Big Data technology to boost the speed and quality of business decisions (source: CIO)
- 59% of organizations lack the tools required to manage data from their IT systems (source: Saffron Technologies)
- 34% of organizations say they have no formal strategy to deal with Big Data (source: Information Week)
- 5% of companies believe Big Data will “fizzle out after the hype dies down” (source: CIO)
- 30 billion pieces of content are shared on Facebook each month (source: McKinsey)
- 140,000 to 190,000 people with deep analytic skills as well as 1.5 million managers and analysts will be needed by 2018 to fill jobs in Big Data (McKinsey)
BarnRaisers helps companies use analytics to make improvements and create change.
Digital Analytics, Measurement and ROI are courses I teach in the Digital Marketing Mini-MBA program at Rutgers CMD. Class is in session the week of March 31st. I also am a co-author of Strategic Digital Marketing, the ultimate crash course in digital marketing, and wrote the chapter on Measurement and ROI.
Does your company need analytics help? Do these reasons explain to you why analytics is so important to so many companies?
