The Path to Getting Over 400% ROI by Implementing an Advanced Marketing Analytics Solution
- Advanced marketing analytics solutions can yield 140-400% 3-year ROI, primarily through marketing spend optimization.
- ROI potential depends on an organization's analytics maturity level, with higher maturity yielding lower ROI.
- Organizations must develop a unified data strategy to maximize ROI, implement sophisticated analytics tools, and foster a data-driven culture.
- Different maturity levels gain distinct benefits: spend optimization at lower maturity and time savings at higher maturity.
- ROI becomes satisfactory by the second year of advanced analytics solution implementation across all maturity levels.
As organizations become increasingly overwhelmed with marketing data, they recognize the power of comprehensive analytics solutions to drive growth and profitability. Implementing advanced marketing analytics comes with 140-400% ROI. For a marketing department, it can easily ramp up the effectiveness of every activity. However, it can take time to justify, communicate, and explain the potential to other stakeholders. This article strives to cut this time drastically.
This piece aims to deepen your understanding of the ROI behind implementing a marketing analytics solution in large enterprises. It takes the Forrester Total Economic Impact report made with Adverity and one of their customers and further looks at the correlation between marketing analytics ROI and an analytics maturity level of an organization—an entry condition to implementing an advanced analytics solution.
For leaders in these organizations, the higher the budget, the more vital it becomes to optimize your marketing spend. During economic downturns, for example, the knee-jerk reaction might be to cut marketing budgets. Yet, with advanced marketing analytics, you can optimize and potentially increase your budget, reassured by the knowledge that the entire funnel is measurable and under control.
Understanding Analytics Maturity
The term 'analytics maturity of an organization' refers to its ability to leverage analytics in its decision-making processes and operations. This includes the organization's ability to collect, analyze, interpret data, and act upon its insights to drive business performance.
This article revolves around the three levels of analytics maturity.
- Analytics Initiates (Maturity Level 1): Organizations at this stage are beginning their data analytics journey. Their processes are primarily manual and rely heavily on traditional data analysis tools. While they see the value in data-driven decision-making, they need a unified data strategy, sophisticated tools, and the skills required to leverage analytics fully. Analytics software may be used but must still be fully integrated into their operations.
- Analytics Navigators (Maturity Level 2): Organizations at this level are making significant progress towards becoming data-driven. They have begun implementing advanced analytics tools and have a data strategy. There is an increased focus on training and literacy to ensure their staff can effectively use these tools. They are beginning to realize the benefits of using analytics to optimize their marketing spend and improve operational efficiency.
- Analytics Innovators (Maturity Level 3): Organizations at this stage are entirely data-driven and rely on sophisticated data analytics tools to guide their decision-making process. Analytics are seamlessly integrated into their operational processes, resulting in significant improvements in efficiency and effectiveness. A data-driven culture is deeply ingrained in the organization, with most employees actively using analytics.
3-Year Marketing Analytics ROI
This section explores the expected 3-year marketing analytics ROI for the three levels of analytics maturity defined above. The calculations followed the process described in the Adverity study and elements of Forrester's Total Economic Impact methodology, namely:
- The ROI calculations are based on the cost-benefit analysis where costs are directly associated with the implementation and maintenance of a marketing analytics solution over a 3-year term, and benefits come from: marketing spend optimization, time savings due to revenue data ops optimization, and time savings due to improved marketing analytics accessibility and efficiency for marketing staff.
- The customer profile aligns with Forrester's study: a large multinational corporation with over 35,000 headcount, more than 70 markets of presence, about $7B in annual revenue, and ~$62M yearly marketing budget.
- The employed methodology assumes that a company is launching eight global marketing campaigns from a central location and 2,940 regional campaigns (with 70 regions of presence, each region is expected to launch 42 campaigns each year).
- Risk adjustments, costs, and the pace of marketing analytics adoption align with Forrester's study.
Maturity Level 1: Analytics Initiates, ~414% ROI
Analytics initiates win the most benefits from marketing spend optimization. Due to the entry condition of limited campaign optimization, they can reach up to 30% of marketing spend optimization in three years, which accounts for 73.8% of three-year benefits.
When developing a roadmap for the marketing analytics implementation, Initiates may consider increasing the pace of adoption in regions of their presence since regional campaigns account for roughly 80% of the yearly marketing budget and hence optimization potential.
For details, feel free to dig into the individual scenario spreadsheet.
Maturity Level 2: Analytics Navigators, ~334% ROI
Marketing spend optimization is still a significant source of benefits for Analytics Navigators (64.3% share in three-year benefits). The advantage is achieved through the 20% optimization of marketing spend.
However, to keep up with Initiators (from the three-year ROI perspective), Navigators might consider faster regional adoption and faster training of their staff engaged in using marketing analytics on a week-to-week basis.
See the complete scenario for Analytics Navigators in this spreadsheet.
Maturity Level 3: Analytics Innovators, ~141% ROI
The game of marketing analytics ROI changes when it comes to Analytics Innovators. Such companies can only achieve 5% marketing spend optimization over three years. In contrast, the most benefits (42.2%) come from time savings for global marketing staff using marketing analytics every week.
Hence, there are two resulting key points or essential unquantifiable benefits for Innovators:
- Such companies are a better place to work (they are focused on time savings and employee experience over marketing spend optimization) — their data-driven culture can attract the best marketing talent, naturally driving more mid-term benefits.
- Innovators can freely step into the next level of analytics maturity and adopt AI (or predictive) revenue analytics earlier and more effectively than Navigators and Initiates. For Innovators, choosing a vendor with AI analytics capabilities is a way to unlock new horizons and get ahead of the competition.
Please, take a look through the respective scenario for more details.
It is vital to highlight that an adequate ROI is achieved in the second year of using an advanced marketing analytics solution in all three scenarios. And the marketing analytics implementation costs are similar (at ~$450K/yr in all three cases).
Implementing an advanced marketing analytics solution promises significant ROI across all levels of an organization's analytics maturity, with returns realized as early as the second year of implementation.
However, the potential benefits vary, with organizations at the initiation stage reaping the most from marketing spend optimization while more mature organizations benefit from operational efficiencies.
Therefore, a comprehensive understanding of an organization's analytics maturity level is crucial to realizing the full potential of a marketing analytics solution.
As organizations mature, they may focus on enhancing employee experience and adopting more advanced analytic capabilities, such as AI, to drive competitiveness and growth further.
Improvado is a marketing analytics provider supporting large organizations at any level of their maturity: from initiation to innovation. Book a demo with one of our experts to start your analytics journey.
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