Digital Analytics is the process of analyzing data through various online sources such as websites, mobile apps, social media, and so on. It helps us understand whether the consumer behavior is in line with our business objectives.
Let’s try to understand this better with the help of an example.
Rajesh wants to purchase a new ayurvedic toothpaste. He goes to amazon.com and then looks for toothpaste, specifically ayurvedic toothpaste, using its search feature. He selects five to six brands such as Patanjali, Herbal, Colgate, Ayush, Himalaya, etc. He would read its review, pricing, product specification, and the available size for each brand. After going through these brands, he decides to purchase Ayush ayurvedic toothpaste.
This entire consumer lifecycle of Rajesh from his need stage (New ayurvedic toothpaste) to the purchase stage (bought Ayush toothpaste) is the purchase funnel. At the need stage, there will be hundreds of brands in the market. Then at the behavior stage, he would go to amazon.com, where there might be some 20 ayurvedic toothpaste brands. After looking at the popularity indicator, he would select five to six brands. After going through their reviews, pricing, size, specification, he would finally purchase one toothpaste. At each level, from the need stage to the conversion stage, there is a drop of products or brands by the user. Some brands are preferred more than others, and finally, one is selected.
In a similar scenario, Rajesh would go to the local fish market to purchase fish. He would look at the type of fish he likes, the price, their quality, their weight, etc., and depending on each specification, he might purchase one fish over the other. Even this lifecycle of a purchase from the need stage to the conversion stage is the purchase funnel. Rajesh keeps on filtering the fishes he wants to purchase, depending on specific criteria, and finally purchases the fish which meets his standards.
Digital Analytics comes into the picture here. Using Digital Analytics, amazon.com could measure users like Rajesh and try to understand what is working for the consumer, what the consumer likes, how he is navigating through the different pages, and his engagement at each level. This is something unique to the digital world. This helps companies continuously provide a better online experience to their customers, thereby reaching their desired business objectives.
A Basic Purchase Funnel Will Have The Below Stages:
Generally, in the brick-and-mortar world, it becomes tough to understand at what stage a user drops out, as the data is not readily available to analyze. However, the explosion of connected devices like smartphones, tablets, and desktop computers has made the user today more connected than ever, enabling marketers to monitor and collect engagement data at every touchpoint in the purchase funnel using digital analytics. We can track the entire lifecycle of a consumer.
With the advent of technology such as cloud computing and modern computing power, the data is connected more seamlessly than ever before. This data can help us make better and informed decisions about what is and what is not working for the users, thereby acquiring new users and increasing the conversion rate.
In short, digital analytics is the collection, measurement, analysis, visualization, and interpretation of data to drive a continual improvement of the online experience for your potential customers to become your customer through various tools and platforms. Digital Analytics is an extremely powerful tool that brands have that helps them understand the needs of their audience. It also helps companies optimize their Return on Investment (ROI), content offerings, and overall business performance.
Application Of Digital Analytics
A clothing company wants to venture into the online space for selling their fashion labels. They might start with multiple categories and have a look at the various trends using digital analytics.
Digital analytics can help them get answers to some strategic questions, helping them analyze their marketing strategies.
Some Of The Questions Which Digital Analytics Platform Can Answer Are:
- From which location is the maximum number of orders coming?
- Which page has the maximum dropouts?
- Which page has the highest engagement?
- Are we getting repeat customers?
- Which device has the higher user engagement? Etc etc
By trying to analyze specific questions, targeted marketing strategies can be implemented. For example, when the company understands that a particular location has a huge order base, it can mean that it is trending in that area. The company may want to increase its marketing budget to get more visibility or even open a store to tap those who are not purchasing online.
The Basic Lifecycle In Digital Analytics Consists Of Four Steps:
- Measure – Collecting data to analyze. There are various free and paid tools available today to collect data such as Google Analytics, Google Search Console, Ubersuggest, Moz, SEOptimer, Google page speed, Matomo (formerly known as Piwik), Mixpanel, SimilarWeb, CrazyEgg, Hotjar, Facebook Analytics, Instagram Insights, Twitter Analytics, Quintly, Brandwatch, Mention, Followermonk, Google Alerts, Looker, Tableau, Cyfe, Sinsense, Geckoboard, Klipfolio, Kissmetrics, Buzzsumo, Ahrefs, and so on.
- Analyze – Try making sense of data. To analyze the data, it is imperative to understand the business objectives by collaborating with different teams in the organization. This will help us to find insights for the right questions. For example, which social media platform works the best? Which location has the highest sales figures? What product is the best seller? Etc.
- Report – Since the analytics team collaborates with different teams across the organization, the data must be reported in a manner that is clear, simple, and actionable for all stakeholders.
- Test – Based on the insights, different strategies can be planned. The test phase will help us understand and implement the best approach, which should be scaled and continued.
This is a continuous process. The campaigns will be measured, analyzed, reported based on which new strategies will be planned to be tested and so on.
A Simple Example Of Digital Analytics Cycle Would Be Of A Bag Sale On Your E-Store
- Measure: After Implementing a strategy to sell three models of bags out of the ten. The first and the primary step would be to measure the individual sales number for different bags.
- Analyze – Now we would like to know which model has the highest number of sales. The different locations from where the orders are coming, the device for where the sales occur, what and how is the user’s engagement level before making the final purchase, etc.
- Report – After finding answers to these questions. It will be reported to the marketing, communication, sales team to formulate a new marketing strategy from the outcome of the previous campaign.
- Test – The new campaigns will be tested to find out the most effective ones and any changes that need to be done for them.
However, When Using Digital Analytics, Care Should Be Taken On The Following Points:
- Are we analyzing the data keeping the context in mind?
- Are we trying to find patterns to fit our story or try to make real sense behind these patterns?
- Are we answering the 5 Wh questions – Who? When? What? Why? And How? with respect to our objectives
- Though the questions will be measured, analyzed, and reported. It is not Pandora’s box. It will always collaborate with different teams to develop an actionable plan to get the desired output. Like how a doctor will diagnose the patient by asking him about various symptoms or maybe even ask him to take some test before concluding. The test in itself will not tell what is wrong with the patient. The combined efforts of the lab results and the doctor’s expertise will help him conclude.
The Various Applications Of Digital Analytics Are:
- Publishers can use it to create a loyal, highly-engaged audience and better align on-site advertising with user interests.
- Ecommerce businesses can track the customer purchase lifecycle and use it for marketing their products or services better.
- Lead generation sites can collect user information for sales teams to connect with potential leads.
- Online information or support portals can be used to understand the ease of finding information such as the time spent on the site, bounce rates, exit rates, etc.
- Branding can be measured by brand penetration, engagement, and loyalty. How many people follow, comment, and share on social media, etc.
- Paid campaigns can be monitored closely to make sure that the right content is reached to the right audience to get the best returns on the investment. This will help us optimize our content and increase, decrease, or discard a campaign’s budget.
- Marketing activities can be measured by tracking the results. It will help us understand the bottlenecks and plan better for the future.
- An email campaign can be tracked and monitored to see its effectiveness with our target audience.
Digital Analytics Can Be Measured By Collecting Data From Various Channels Such As:
- Mobile applications
- Online point-of-sales systems
- Video games consoles
- Customer relationship management (CRM) systems
- Social media
- Email marketing
If you are a small or mid-sized business, there are plenty of free tools to suit your needs. However, as you grow bigger, it becomes slightly tricky to answer your business questions seamlessly. It becomes challenging to collate the data from multiple sources such as social media, websites, email marketing tools, etc. To solve this problem, it is always wise for brands to invest in automating their analytics to the extent possible. Though there will be costs associated with this, the returns will outperform the cost if used to improve and optimize the business’s marketing strategies, resulting in better outcomes.
The data from multiple sources can be compiled into analytics reports that can be used to analyze and understand customers and make effective marketing strategies. With the world going online, digital marketing has to become a big part of every marketing team.