Analytics is an indispensable tool for marketers to make informed decisions and boost ROI. However, the explosion of data, especially in digital marketing, has led to pitfalls that could be termed the “seven deadly sins" of analytics.
Overreliance on reach: While reach is important for ensuring your ads are seen, it shouldn't be the ultimate measure of success. Doing so limits the value of analytics and wrongly positions media as a cost, rather than an investment that drives business outcomes. Marketers should focus on how media spending delivers ROI against outcomes that align with broader business objectives.
Vanity metrics: It's a mistake to use only media metrics like impressions, clicks and views for measurement. These metrics are easy to collect, but don’t necessarily indicate true success. It's like describing a trip in your car using gallons of fuel burned instead of miles traveled. One is a byproduct of an activity, and the other is the outcome. These two things are not equal in terms of value -- and the same is true when it comes to media metrics versus outcomes in marketing. Do not waste your time on any analytics that don’t show you how media metrics drive outcomes.
Overcomplication: The conference circuit in our industry creates FOMO, as marketers constantly see other organizations flaunt the different analytics solutions they’re deploying. However, more advanced isn’t necessarily better, and large volumes of available data can lead to unnecessary complexity. Start with straightforward aggregate methods for evaluating success, like curve fitting, time series regression, or tree-based methodologies. Then delve deeper as required.
Wrong incentives: Rewarding your marketing team solely on media delivery metrics is a huge mistake. CEOs need to align marketing KPIs and incentives with the organization’s larger goals and ensure they're understood and appreciated at the executive level, especially by the CFO.
Dashboard dependency: Dashboards are useful for data visualization but are not the end goal. They often fail to offer actionable insights and can even induce choice paralysis because you’re looking at everything -- and not what matters most. A better approach is using statistical analysis to visualize your top leading indicators of success -- tied to outcomes and the next best actions for maximizing ROI.
Poor planning for measurement: Measurement shouldn't be an afterthought. Failing to plan from the start leads to hastily conceived insights. This is the worst sin of them all, because it undermines the value proposition of analytics. A cohesive measurement framework should be integrated into the marketing strategy from the outset.
Measurement as a destination: Seeking absolute certainty through measurement is futile. Analytics should be viewed as an ongoing process of experimentation that adapts as new information is collected.
There are no absolutes in systems involving human behavior. As such, extract just enough information to answer your questions, take swift action, record everything that has happened and continue experimenting.
Addressing these "sins" allows marketers to use analytics in a way that genuinely adds value over vanity. Analytics should be a tool that guides our strategies, informs decisions, and drives success. By focusing on the metrics that matter, we can ensure our marketing efforts are both purposeful and effective.