Marketers Buy More Than They Use Analytics

Apparently purchasing marketing analytics is for marketers much like buying avocados is in my family. Let me explain. Knowing that we love the flavor and nutrition of those slightly mushy green orbs, we buy one dutifully each week at the local grocery. Knowing that we need to let them ripen before they peak, however, they end up sitting on the counter, where we forget about them until they over-ripen and rot. We tend to do this with a lot of “healthy” items. We buy them with the best of intentions, but somehow never fit them into our diet routine.

According to the latest iteration of the CMO Survey from Duke University’s Fuqua School of Business, something like the avocado effect may be happening among marketers who buy analytics products. The survey of 288 marketers VP level and above in early 2015 found that they expect their level of spending on marketing analytics to grow from 6.4% of budgets to 11.7% in the next three years. For companies making over $10 billion, that budget share will be even higher: 13.9%.



And yet for all the money invested and apparent enthusiasm for leveraging marketing analytics, the same group of marketers reports an actual decline in analytics' use. While 37% of projects used available tools or requested marketing analytics in February of 2012, that number declined to 30.4% last year, and is now down to 29% this year.

To be sure, the use of analytics is strongest among consumer-facing projects (46.9%) than it is in B2B (24.9%).

But when asked how much marketing analytics contribute to company performance, marketers see that declining as well. On a point ranking system, they saw the level at 3.9 two years ago and 3.2 today. Again, the contribution of analytics to performance was seen as highest among B2C marketers (4.2).

Part of the problem may be that there is no organized scrutiny of the analytic services marketers are buying. Only 30.4% said that their company formally evaluates the quality of marketing analytics. And attempts to prove the ROI of these tools were not always clear. 48% of marketers said they relied on a “qualitative sense” of long-term effect. Meanwhile, 42%  said they used quantitative metrics to show the short-term effects of analytics, while 34% could show long-term impact. And between 18% and 19% had not been able to show any short- or long-term impact from analytics at all. 

The use of analytics has shifted somewhat in the last year or so. They are being aimed increasingly at customer acquisition (37%), customer retention (30.2%) and product-line optimization (26.4%). Their use for promotion strategy (21.9%), marketing mix (19.8%) and recommendation engines (5.6%) is actually declining.

It's unclear from the survey why there is this disconnect between the rising spend on marketing analytics and their apparent use in evaluating projects. Perhaps the sheer complexity of producing and interpreting the data itself remains a challenge. The author of the survey -- Christine Moorman, a professor at Fuqua School -- said it was clear that the tools being acquired were underutilized by the marketing teams. 

2 comments about "Marketers Buy More Than They Use Analytics".
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  1. Robert Niess from MKT, February 23, 2015 at 2 p.m.

    This article intrigued, you would think with the use of the internet and the amount of customer reviews out their today, that marketers would want to make sure that they were using as much of the analytics that they purchased as possible so they can have the best possible ad. With the amount of competition in the ad world it is important to appeal to potential customers and to know exactly who you are trying to target. I would think that companies would want to know everything about their analytics so they know how successful their ad is. If a marketing firm does not know if it is reaching consumers on a positive level it is impossible to know if the ad is really effective. For the amount of money that is being spent on ads I would think that it would be one of the most important things to look at.

  2. Marilyn Paige from Paige Integrated Marketing, February 28, 2015 at 6:14 p.m.

    I wonder how much of this usage gap is simply because there still aren't enough marketers who are both strategists AND statisticians. On one side of the marketing department you have analytic specialists who understand the data and on the other side are the marketers who understand the execution of campaigns. They obviously aren't the same person and the camps aren't talking to each other productively. All the data in the world doesn't mean anything if you aren't able to mine and apply the insights that are gained from it.

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