19 Dec Marketing Metrics and Marketing Analytics

Understanding the Key Differences Between Marketing Metrics and Marketing Analytics

In my 13 years managing MBTN, one issue that continues to come up in conversations with faculty and clients is understanding the difference between marketing metrics and marketing analytics and how the two fields of study relate to each other. While they may sound similar, these concepts serve different purposes in the marketing function, but they are often used interchangeably. This post will provide a quick comparison of the two terms.

Marketing Metrics: The Measures

Marketing metrics are quantitative measures that help businesses track the performance of specific marketing activities or campaigns. These are numerical values that offer a snapshot of various aspects of your marketing efforts – measures that one would expect to see on a marketing dashboard (high level) or that are used to measure the effectiveness of alternative marketing efforts (specific to a single action or campaign). Some common examples of high-level marketing metrics include Enterprise Customer Acquisition Cost (CAC), Average Customer Lifetime Value (CLV), and website visits. Some examples of more context specific marketing metrics include click-through rate for a landing page, Return on Investment (ROI) for a particular campaign, reach and impressions for an advertisement, etc. Marketing metrics serve as key performance indicators (KPIs) and help track and assess the effectiveness of marketing activities. Marketing metrics are essentially the “what” and “how much” of marketing performance.

It is important to recognize that context is essential to understanding the meaning of a particular metric. Is the metric for overall company performance (high level) or for a particular campaign? What period does the metric capture? Does the metric change over time or is it steady? What factors influence the performance of the metric? Who should review particular metrics? (hint, not everyone should continuously monitor every metric!) As we start to ask these context related questions, we begin to move into the realm of marketing analytics.

Marketing Analytics: The Process

Marketing analytics is a more comprehensive and continuous process that goes beyond mere measures. It involves collecting, analyzing, and interpreting data to gain deeper insights into marketing performance. It is the systematic examination of marketing metrics to understand the “why” and “how” behind the numbers. The process typically includes the following steps:

• Data Collection: Gathering data from various sources, such as website analytics, customer databases, social media, and more.
• Data Analysis: Using statistical and analytical tools to examine the data and identify trends, patterns, and correlations.
• Data Interpretation: Understanding the context and implications of the data. For example, analyzing why a particular campaign had a higher conversion rate and what factors contributed to it.
• Predictive Modeling: Building models to forecast future trends, customer behavior, and campaign outcomes.
• Actionable Insights: Deriving insights from the analysis and making data-driven decisions to optimize marketing strategies.

Marketing analytics help marketers uncover the hidden drivers behind metrics and performance. The process enables a manager to make informed decisions, adjust strategies and tactics as needed, and predict future outcomes, ultimately leading to more effective and efficient marketing decision-making.

It’s important to recognize that marketing metrics and marketing analytics are not mutually exclusive; rather, they complement each other. Metrics provide the essential performance indicators needed for tracking, while analytics dive deeply into these metrics to provide context and help understand the bigger picture. In other words, marketing metrics are the “what” and “how much,” while marketing analytics are the “why” and “how.”

In summary, the primary difference between marketing metrics and marketing analytics is that metrics are the individual data points or measures (the “what” and “how much”) that represent your marketing performance, while analytics is the process of examining, analyzing, and interpreting these metrics to understand the “why” and “how.” Marketing metrics provide a basic view of performance, while marketing analytics are central to a more comprehensive process that provides insights and informs strategic decisions for ongoing marketing optimization.

In a future post, we’ll examine the MBTN modules that can be used to both understand and implement marketing metrics and analytics.