According to a recent study conducted by Venturebeat, major brand owners plan to increase their analytics spend by up to 73 per cent over the last three years. In fact, the owners of some of the world’s biggest B2C companies are planning to double their analytics spend over that time.
Not only is the analytics spend increasing within those companies, but the data analytics companies themselves are seeing massive growth thanks to venture capital spending. Data collection is a big business.
Analytics for Any Market Sector
Venturebeat’s report looked at 800 tools, covering 10 broad use cases, including brand and social analytics, ad effectiveness, audience insights, CRO, e-commerce, campaign management, SEO and SEM and customer service, as well as big data and predictive analytics.
Today, those tools fall under the remit of the CMO instead of the CIO. The CMO is under a lot of pressure to show that the tools they are using are providing performance gains worthy of their budget. Analytics tools are perfect for this, but the market for them is more fragmented than it should be.
Showing the Market Value
Demonstrating the value of these tools is something that marketers are struggling with. Many of them are spending a third of their budget on analytics and yet have limited confidence in those tools to provide insight. Jon Cifuentes, the author of the report, notes that many marketers are using only simplistic approaches to analytics. Cifuentes says that more advanced techniques such as mix modelling and algorithmic attribution are quite rare in the market.
There is a clear skills gap around data science in the majority of B2C organisations. Even marketing companies are failing to make it clear what value their own insights have, and how their own customers can turn those insights into actionable information.
Rapid turnover in digital marketing is one issue that is contributing to the poor strength of insights. Digital marketers tend to stay at a given position for just one or two years, which is not long enough to produce a formalized, effective strategy for a major company.
The analytics marketplace is growing rapidly, and it is far from mature. Venturebeat’s report shows exactly how bewildering the array of tools, products and information out there is. The companies that survive will be the ones that make it easy to understand not just the data they are collecting, but why marketers need to care.