The future of analytics

The future of analytics
Image by Ben Requena

Analytics

Capstrat Staff

11.01.2010
In: Professional / Financial Services

While technology improvements are going to make it easier to collect and sort more and more data, budget constraints and the acceptance of data-driven decisions are ultimately going to determine the direction analytics will take.

Prove your worth

Economic pressures are going to be one the biggest drivers toward acceptance of analytics. The current recession has forced companies to reconsider how they allocate funds and marketing budgets have been hit hard. A big reason for cuts can be linked to the lack of decent marketing measurement. Traditionally, marketing organizations have struggled to demonstrate measurable value, making it easier to cut marketing budgets when times are tough. Instead of being viewed as an investment, marketing has often been viewed as an expense. Today, CFOs are pushing marketers to be more accountable for their marketing dollars and will push them to embrace analytics in order to justify their efforts.

Don’t just go with your gut

Culturally, organizations are still somewhat resistant to using data to drive decision making. For the last 100 years or so, marketing has been a faith-based initiative driven by gut feelings and intuition. As the tools and expertise start to mature, data-using companies will gain a competitive advantage. Understanding where to spend the next marketing dollar and gaining better insight into customer behavior are going to yield more effective marketing efforts for companies that make analytics an important part of their ongoing strategy.

One of the reasons we see a low acceptance of using analytics in decision making comes from the absence of skill development in the area of analytics. At present, there are very few educational resources available for people who want to learn to use analytics tools and methodologies. As a result, marketing has long lagged behind other fields in using data to drive better decisions. However, this will change as the academic world begins to adjust curriculums to train the next generation of workers. Analytics in the future will not be left to a select few analysts but ingrained in all marketing roles as a way to help determine appropriate strategies.

What’s next

Beyond the outside economic forces and marketing cultural changes driving analytics, there are other interesting trends worth keeping an eye on for the future.

  • Privacy is a hot topic as the breadth of data on individuals continues to swell. Developments in legislation, both at home and overseas, stand to dramatically change what information can be collected on individuals and how that data can be used in marketing.
  • The cost associated with analytics tools and data storage continues to fall, which will bring robust analytics tools to a much wider audience. The power of these analytics tools will rise as storage costs decrease and processing power increases.
  • Data integration will continue to gain prominence as software packages use behavioral data to dictate the types of content on websites, how email marketing is crafted, how customer service is provided and how offers are personalized. With technology, marketing becomes a more one-on-one effort, which will deliver relevance and ultimately conversions. In the future, there won’t be an internal debate about what goes on the homepage—the visitors will decide.
  • Someone will figure out a way to measure social media and its impact. Right now, there are a lot of companies trying to solve this analytics challenge but no one has the definitive answer yet. Over the next few years, marketers will be striving to understand social media’s influence over purchase decisions, the perception of brands and how to communicate with customers.
  • The movement of advertising to the digital realm means measurement will become increasingly important and expected. Managing across multiple channels and understanding how tactics interrelate to deliver results will be an ongoing challenge as marketers grow more sophisticated in wanting to understand visitor behavior.