Back to all Blogs

Efficient Ways to Calculate Your Return on Analytics

Published 19 Feb 2015 by Tim Langley, CANDDi
Read this in about 1 minute

Analytics are not simply a “nice to have” part of a business plan; they are essential to the growth and sustainability of any business. They offer clear, hard facts and insights into the profile of and the behaviour of your customers. They allow you to get both quantitative and qualitative information about where your visitors come from, how they behave and the things that they like and dislike about your website.

Analytics ROI

Unfortunately, even if you understand the importance of analytics, it can be difficult to sell such tools and practices to the rest of your team. It takes time to put good data-gathering systems in place and get a sample of data that is large enough to ensure that you have a representative sample of your user base.

Marketing managers in particular think of things in terms of ROI. How can you prove the ROI of your analytics when analytics itself is used to determine the ROI of other tools, such as advertising.

Real Numbers, Real Facts If ROI is Return on Investment, let’s call the return on analytics ROA. This metric should analyse the impact that analytics has on the company itself - directly or indirectly. The benefit that analytics provides can be considered to be the improvements that are made to your website, sales pages, email marketing and ad copy as a result of trends that have been tracked through analytics tools.

If an analytics improvement cycle takes two months, and you increased the return on ad spend for your Google Ads campaign by ten per cent in that time, you could claim that your work is worth five per cent per month. If you have a part-time analytics worker who earns £12,000 a year, then you could claim that the five per cent per month costs £1,000 a month - assuming, rather simplistically, that the Google Ads campaign is the only thing he works on, which is unlikely to be the case. If he were working on more than one campaign, then the costs would be applied across all campaigns.

Finally, you would compare those costs to the benefit to the bottom line of the company. How much is a five per cent increase in advertising ROI worth? If you are dealing in high-value products, then it is most likely a significant amount. Presenting the numbers in this way makes it easy to see the value of analytics.

Back to all Blogs