While the use of digital analytics is increasingly important to organizations, relatively few organizations have a strategy in place for analytics or measure the ROI from their analytics investments, according to a report [download page] from Econsultancy and Lynchpin. Moreover, there’s been little change over the years in the extent to which companies are deriving actionable insights from their analytics data.
Indeed, company respondents to the research – which surveyed more than 900 marketers and supply-siders, primarily in the UK and Europe – reported that just 39% of analytics data is useful for driving decision-making.
That’s the lowest point in at least 10 years, though the proportion of usable analytics data has generally sat not much higher, in the 42-45% range.
In fact, just 30% of company marketers surveyed said that the majority of the analytics data they collect is useful for decision-making.
The results bring to mind results from The CMO Survey, in which CMOs in the US said that fewer than one-third of projects used analytics prior to a decision. This is troubling as the most important objective of data-driven marketing is to make more decisions based on data analysis.
Overall, fewer than one-third (29%) of company respondents said that analytics definitely drive actionable recommendations that make a difference to their organization. While that’s up from 23% saying that in 2015, it’s far lower than the previous high of 40% set in 2014. This suggests either that organizations aren’t making inroads with their analytics data, or that as they become more familiar with analytics they discover that they’re not using these tools to their full potential.
Strategy and Executive Buy-In
Presumably, the presence of an formally documented data analytics strategy would help move things along, but these are relatively sparse. Almost two-thirds (64%) of company respondents said they don’t have such a strategy, consistent with the past couple of years.
Even larger organizations, with more than Â£50 million in annual revenues, lack a formally documented strategy though they’re more likely to have one (44%) than smaller organizations (30%).
More involvement from senior leadership could conceivably push broader adoption of analytics strategies. This year, half of company marketers surveyed said their is executive sponsorship of digital measurement and analytics within their organization. Curiously, only 56% deemed such involvement “very important,” though another 41% feel it “somewhat important.”
Making the business case for analytics investments could in turn foster greater executive buy-in, but there are few advancements in this area either. Indeed, a slight majority (52%) of company respondents said that they don’t measure the ROI on their digital analytics investments.
Where Analytics Has Impact
On a more positive note, analytics is having an impact in some areas.
Most company marketers (55%) say that analytics is “very influential” in optimizing conversion rates, although the report’s authors express some surprise that this isn’t higher given how integral analytics are to conversion rate optimization (CRO).
Meanwhile, almost half (48%) see a strong influence in understanding the impact of changes and initiatives, and many are also seeing analytics’ strong potential to increase traffic (46% noting as very influential) and improve marketing ROI (43%).
In each case, many marketers also pointed to analytics as being “somewhat influential.” As such, almost all are seeing at least some influence from their efforts.
Worth noting is that while analytics is most commonly used to increase traffic (73%), acquire new customers (65%) and optimize conversion rates (63%), few are using these tools to increase customer lifetime value (28%).
CLV is one of the few areas tested in which perceived influence outpaced usage. Conversely, there seems to be plenty of room for improvement in goals such as increasing traffic, acquiring new customers, and improving marketing ROI, where usage far outpaces perceived strong influence.
About the Data: The results are based on a survey of 926 in-house digital professionals and analysts (59% share) and supply-side respondents (41%). The majority (56%) of respondents are based in the UK, with another 15% based in Europe. Respondents hailed from a variety of job roles, business sectors, and company sizes.