Why Are Data Analytics So Important in Modern Marketing?

Man using Google Analytics on his laptop

Marketing is a critical activity for any business. It can take up anywhere from 5-8% of your annual sales revenue, or even as high as 20% if you are a new business. That is a significant investment of precious resources. 

Therefore, with such high figures at stake, it is not wise to go in blind. Success in any aspect of business hinges on making decisions that are backed by data, and none more so than marketing. From determining your target demographics and picking appropriate channels, to creating compelling ads and promos, every decision you make should be supported by quantifiable numbers. 

Consider, too, that marketing is an ongoing investment; you need to know if your tactics are making any progress while, at the end of your campaigns, you need to know if they generated a return on investment (ROI). This is why analytics are so crucial throughout the entire process.

The Importance of Marketing Analytics

In business, analytics involves collecting, processing, and interpreting data for various purposes. It helps answer specific questions you may have about the performance of your business. 

Specifically, marketing analytics focuses on your ongoing marketing campaigns and how your organisation is executing its current strategy. ROI is generally seen as the key metric in this regard, although this isn't necessarily the case; after all, lead conversion is not always the objective of a campaign, and success can be measured in several ways. Therefore, it's perhaps better to state that the purpose of analytics is to measure the impact of your marketing efforts, and to find ways to make them more efficient.

Analytics in Digital Marketing

Although analytics have long been used by organisations to assess the performance of their campaigns, the rise of digital marketing has given us access to more insight than ever before.

This is important, as the more data there is available, the more accurate and revealing the measurements will be. As a result, you can finetune your campaigns to the nth degree, ensuring that no single lead slips through the net.

Of course, this doesn't mean that offline marketing methods are obsolete, or that they are impossible to analyse. Imagine you are running a print ad in a newspaper, for instance; you know how much you have spent to place the ad, you can get rudimentary figures of the newspaper's circulation, and you can monitor your sales numbers in the days after publication. Beyond that, however, it is difficult to gauge what aspects of your ad could be improved, while any conclusions over its effectiveness would contain a significant element of guesswork.

With digital marketing, this is not the case. Every single online activity generates a ton of data which can be measured and analysed, from the on page behaviours of your users to their location, demographic, and intent.

The Benefits of Analytics

How, then, does this treasure trove of information translate into success for your company?

To illustrate, here are some of the ways that analytics can directly support your marketing efforts:

1. It Allows You to See What Works and What Doesn't

Marketing is all about engaging with your target customer, and an in-depth analysis of your tactics and strategies allows you to figure out how best to achieve this. For instance, which of your search or display ads are getting the most clicks? What organic keywords are you being found for? And, perhaps most importantly, what isn't performing? 

If you know the answers to these questions, then you can build on what is successful and stop doing what isn't. For example, if you are generating a lot of leads from a particular blog post or display ad, but the data shows that none of them are getting to the checkout stage, then you would likely need to review the effectiveness of your landing page. Conversely, if your Google ads are not performing, but you are generating huge sales from your social media channels, then maybe you should focus your budget more on Facebook Ads.

These are simplifications, of course, but they illustrate how analytics can help you optimise your campaigns and tweak them accordingly.

2. It Helps You Understand User Behaviour

Acquiring leads is, of course, a vital aspect of digital marketing. But what happens when someone makes it to your site? How long do they spend on certain pages? What actions do they take?

It is crucial to understand why users do what they do when they have been exposed to your product. For instance, do they immediately hit the "back" button? Perhaps your landing page is a mess, or it is taking too long to load. Do they start delving deeper into your site? Maybe they are looking for more information before purchasing. Remember: analytics cannot directly tell you how to improve, say, your UX, but it can give you the information that suggests it is the source of your problems.

3. It Can Help Identify Positive and Negative Success Factors

Imagine that you are reviewing your monthly sales figures, and you notice that you tend to get more engagement or sales at a certain time of the day, or on a particular day of the week. Conversely, there may be some periods where you are receiving no engagement at all.

Of course, you would need to do your own market research into the reasons behind this. For instance, if you sell children's bikes, maybe your peak sales times are lunch hours, evenings and Saturday mornings, when parents can make buying decisions. It's up to you to make these connections, but what analytics can do is identify, quantify, and reveal these trends.

The benefit of having this knowledge is obvious. You can strategically time your marketing efforts (such as through social media posts) to increase sales and lead conversion at those specific times. 

Incorporating Analytics into Your Marketing Strategies

According to Deloitte, businesses are now spending more on marketing analytics. The predicted quantum of increase is a whopping 200% from 2019 to 2021, or from around 5% of the marketing budget to 15% or more. 

Given the scarcity of resources, you may find it hard to invest in data analytics for your digital marketing campaigns. Thankfully, though, as with many things digital, analytics can also scale with the size of your business. 

As a small business owner, you have access to many useful tools, including both free and paid services. Google offers a comprehensive suite of powerful applications, including Google Analytics, Search Console, AdWords, and Data Studio – all of which are free – while KissMetrics, HubSpot, MailChimp, and IBM Watson are other standout tools.

In terms of getting to grips with analytics, it's a good idea to smart small (you can always scale up later). In the beginning, focus on understanding and analysing these key metrics: 

Traffic Sources

The traffic that your website or landing page receives doesn't appear out of the blue; it has been directed there from a source, such as a search engine, social media, an advert, or an email. Google Analytics can break this down for you pretty comprehensively, but at first, all you need to know is where the majority of your traffic is coming from.

You can then use the results to identify the most efficient digital marketing channels for your business. You can also identify trends; for instance, if you are investing a lot of time and resources into SEO and content, but your organic acquisitions are not improving month-on-month, then you either need to revise your strategy or look into why your content is not getting found.

Page Views and Duration

Which pages on your websites attract the most visitors? Is there a particular kind of content that is working well for you? For example, you may have produced some 'how to' guides that tie into your products, and are generating organic visitors to your page.

Bear in mind, though, that page views can be misleading without taking into account duration analysis. If your guide takes five minutes to read, but people are only staying on that page for 30 seconds, then it's likely that your content isn't engaging enough, and the reader is unlikely to progress to a purchase. You could be getting 500 unique page views and thinking "that's great", but if nobody is sticking around, then those views are not very valuable. In addition, many third-party ad networks do not count views unless the user stays on the page for a set amount of time, meaning that you could lose out on ad revenue, too.

On the flip side, if you see that a particular page is performing well and users are engaging with it, you could add more product links and calls to action to improve and optimise sales. 

Bounce Rates 

Bounce rates are also important indicators, as they reveal the percentage of users who land on your page and then leave (rather than viewing other pages on your site). If you have a high bounce rate on a page – especially one that has one or more call to action links – then you will need to consider what can be done to improve that.

Conversion Rates

At the other end of the spectrum are conversion rates, and are what every marketer or business owner wants to perform well. It's worth noting that conversions don't equate necessarily to sales; rather, you create your own definition of what constitutes a conversion, and your analytics tool of choice will then quantify it.

For instance, if the goal of your campaign is to make direct sales, then a customer completing the checkout process would be your conversion. However, if you are looking to build a customer base, then maybe securing an email address is your conversion. Whatever your goal, this metric lays out in black and white how exactly your campaign is performing.


In today’s business environment, it is almost impossible to imagine a marketing campaign that isn’t supported and driven by analytics. From revealing the strengths and weaknesses of your ongoing campaigns, to acting as a review tool at their conclusion, they shape the entire process – and rightly so.

Marketing has always sat somewhere between art and science, and now the science is foolproof.

Was this article helpful? Let us know in the comment section below!