What is the purpose of marketing analytics?

The main purpose of marketing analytics is to understand how well your marketing efforts are performing. This is done by using data to measure the effectiveness of marketing activity. This measurement allows you to gain deeper insights into your customers and marketing to increase the return on investment of your marketing efforts.

With a general understanding of what is the purpose of marketing analytics you may want to know what the three types of marketing analytics are.

What are the three types of marketing analytics?

Marketing analytics can be broken down into three main categories. These categories are Descriptive, Predictive, and Prescriptive. Each category is slightly different but one thing they all share is the use of data to better understand your marketing activity. Below is a more detailed description of each category.

• Descriptive analytics describes what happened in the past. Data helps you understand past performance in order to provide context on current marketing efforts. An example of this is KPI dashboarding. KPIs provide a framework to track your performance creating a benchmark for your current performance. Our KPI article provides a deeper dive on this subject.

   

• Predictive analytics make predictions about the future. Proper data collection is necessary to create accurate predictions. Churn modeling is an example of predictive analytics. This model looks to predict which customers are most likely to stop being a customer. If you want to know more about propensity modeling our article does a great job explaining what these models are and some examples of propensity models.

   

• Prescriptive analytics recommend the most impactful things you can do. This is similar to predictive analytics by aiming to predict the future. However, prescriptive analytics are more focused on how you can impact the future rather than what is going to happen. An example of this would be creating a framework to try and save the customer relationship when a customer scores high in the churn model.

With a general understanding of what marketing analytics is, you may want to know how to implement marketing analytics. CDA calls this becoming a data driven business. You can take a look at the framework we designed to describe this process.