Friday, November 13, 2015

7 Insights About Using Analytics to Better Understand and Improve Your Marketing


The Institute for Business Analytics at the Kelley School organized the Kelley Forum on Marketing Analytics to bring MBA and MS in Business Analytics students – such as my Kelley Direct classmates and myself – together with Kelley faculty and marketing analytics experts from all over the country in Bloomington, Indiana to share ideas and to network. Executive Associate Dean Ash Soni made a great observation about the significance of the event to open the forum, “When we can get 100 people together at 8 a.m. on a Friday morning to discuss analytics, you know we’ve come a long way in this field.”

Here are some of the insights about using and applying analytics for marketing from the presenters:

1) Businesses must adapt to the new consumer mantra: IWWIWWIWI

What does that stand for, you ask? “I want what I want when I want it.” Michael Wilhite, SVP of Capabilities at 84.51°, described how always-online smart phones enable consumers to search for anything they want, make purchases at any hour of the day, and complete most of the tasks from wherever they are instead of waiting until they get in front of a desktop. The consumer is used to instant gratification, so even short delays are perceived as inconveniences now.

Digital marketing is best poised to meet this expectation, which brings us to the next takeaway:

2) Advertisers should give mobile advertising another chance

Many advertisers moved away from mobile ads after wasting money on consumers who were converting or ready to convert on their phones per Jeff Allen, President of Hanapin Marketing. He went on to explain that after Google updated their mobile search algorithm earlier in 2015 (affectionately referred to as mobilegeddon) to give preference to mobile-friendly sites in their rankings, consumers’ experiences on mobile browsers has continued to improve. This among other things has helped improve the rate at which mobile users shift their purchase activity from their desktop to their smart phones. It’s happening quickly now so mobile ads should be more effective.

How do you determine if your mobile advertising is working? Try this:

3) Setup a controlled experiment to measure the lift from marketing campaigns


If you want to answer the question, “did this campaign move the needle?” (which you do), consider returning to the scientific method. Vaibhav Garde, Principle at FedEx Services, demonstrated how controlled experiments provide the most robust way to quantify the lift that a marketing campaign provides and ultimately to determine ROI. He recommends allocating a small portion of your marketing campaign budget for testing first to prove a concept or channel. Measure the difference your campaign makes for the segment you’re targeting versus the control group that isn’t exposed to the new campaign.

Following the above recommendation will give you the big picture, but what about the details such as determining which channels provided the best return? It’s important that you know this:

4) The last click before a conversion on your site doesn’t tell the whole story

Assistant Professor of Marketing Alice Li shared research showing that last-click attribution doesn’t capture the overall impact of all your marketing channels (display, paid search, email, referrals, etc.) and how they influence the purchase throughout the funnel. To better understand each channels’ relative contribution to a sale, the model from her research uses “the carryover and spillover effects of prior touches at both the visit and purchase stages” by analyzing the customers':
  • consideration of online channels
  • visits through these channels over time
  • subsequent purchases at the website

Doing so yields a completely different attribution percentage for each channel meaning that the amount of money and resources invested in a given channel should change as well.
The next insight is about another type of customer data that might not mean what you think it does:   

5) User ratings change significantly based on suggestions and recommendations

Did you know more than 75% of videos watched on Netflix are videos they recommend to users? Also, more than 30% of Amazon’s sales come from the products they suggest to shoppers on their site. Recommender systems are an important tool for ecommerce and online businesses, but Assistant Professor of Information Systems Jingjing Zhang uncovered just how much they swaying online consumer ratings and behavior.

One experiment in her research provided subjects with artificial suggested ratings for a TV show they watched similar to how Netflix provides their estimated ratings for every video based on a user’s viewing and rating history. The study found that ratings were biased towards the suggested low or high rating compared to the control group that did not receive a suggested rating.


Businesses need to be careful not to abuse the recommender systems and be aware that their rating diversity may decrease as more consumers are influenced by existing ratings. Consumers may lose trust in biased ratings and recommendations potentially harming business.

If you only remember two things this post, let it be these final two insights:

6) Whether you’re observing it or not, there is useful data available to you right now

The presenter that really brought this point home was Associate Professor of Marketing Shibo Li. His research was about the effects of group influence on shopper preference and purchase behavior. But it was the topic, but the method of data collection that really stood out: they used a ceiling-mounted camera similar to security cameras to track shopper behavior in a retail store. This enabled them to record the zones each shopper visited, number of people in each group, time spent in each area of the store, age-range, whether a sales person helped them, and several other pieces of information.


Although I admit that it’s slightly creepy, this method makes this previously unobserved data useful for this business and other retail shops. The store can now better understand their consumer giving them opportunity to improve their layout and signage placement, customer service and operations. It is up to all of us to find ways to make the data already available to us more useful.

As marketers, we have to find the right balance between giving the customer exactly what they want when they want it, and getting too personal. Consumers are increasingly opting out of online ads via ad blocking tools:

7) Monitor disruptive changes and adapt to the consumer

45 million users in the United States (and 200 million worldwide) use ad blocking tools online. That is a 50% increase in users over the previous year. Although some businesses are combatting this by asking site visitors to kindly turn their ad blockers off or denying the users the content they came for, the fact is that business need to make changes to address this change in customer expectations.

Michael Wilhite of 84.51° put it well when he candidly shared his feelings about the popularity of Airbnb and other user generated content (UGC) based businesses, “As a non-millennial, I don’t get it. But it’s not about me getting it. I have to accept that it’s happening and figure out how to adapt. He went on to explain how disruptive forces create opportunity, and the biggest opportunities right now can be found at the intersection of mobile, social, and real-time as depicted in the Wheel of Disruption graphic from digital analyst Brian Solis below. Think about how your business can take advantage of these forces.


I’ll leave you with one final thought from one of the panelists at the forum that I'm sure could benefit all companies if their marketers, IT personnel and managers would just follow it:



About the Author

Pathik Bhatt is an experienced digital marketer and a dual-degree student who recently completed his MBA and is currently pursuing an MS in Business Analytics at Kelley. He started his online MBA when he was living and working in Chicago, and now serves as the Associate Director of Interactive Recruiting for the Kelley Direct Online MBA & MS Programs after moving to Indiana last year. Pathik proudly holds three titles at Kelley: he is currently a student, alum, and staff member.

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