A new research report on marketing analytics shows that brands plan to increase their spending on the category by a whopping 73 percent over the next three years. For big market cap B2C companies, it’s closer to a 100 percent increase.
The category not only shows massive growth, but also a lot of funding — more than a billion dollars of VC money has been invested in data analytics companies so far this year.
Overall, user data, investment data, and adoption data all indicate that analytics is one of the hottest marketing technology categories right now.
The report covers over 800 tools across the following 10 use cases:
- Brand/social analytics
- Audience insights
- Ad effectiveness
- Growth marketing/conversion tracking (CRO)
- Mobile analytics/app analytics
- Ecommerce analytics
- Cross platform/campaign management
- Customer experience/service
- SEO/SEM analytics
- Big data/unstructured/predictive
Most of these tools are now the responsibility of the CMO, rather than the CIO, and the CMO is under pressure to demonstrate performance gains in line with an increasing budget. Analytics are key to showing value, yet the market is huge and fragmented.
Demonstrating value is also costly.
It turns out that marketers are spending well over a third of their budgets (on average) on analytics. This in spite of the report finding that levels of confidence in analytics’ ability to generate insight are mediocre, at best.
The report also finds that marketers aren’t that advanced in their analytical approaches.
The author of the report, VB Insight’s Jon Cifuentes, says that “Algorithmic attribution, mix modeling, and other advanced methods are actually pretty rare in market.”
Part of the challenge is due to the gigantic skills gap in most organizations around data science. Most marketing organizations are lukewarm on both how good their own insights are and how good their business partners are at making their insights actionable. That’s not entirely surprising, since digital marketers stay at a job for only 1-2 years, on average, and companies don’t have very formalized strategies.
The full report, which covers these findings and more, is available here: The State of Marketing Analytics: Insights in the age of the customer.
The graphic below maps out the marketing analytics landscape that is covered: