Updated May 2023
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What is the Difference Between Marketing Metrics and Marketing Analytics?
The terms of marketing metrics and analytics are often used interchangeably, but they do refer to slightly different concepts.
What is a marketing metric?
A metric can be defined as a single measuring system that quantifies a trend, dynamic, or characteristic.
A marketing metric is usually an individual measure of a result, input/output or other factor related to marketing performance or financial results.
Here are some formal definitions and explanations of what marketing metrics are:
- Marketing metrics are simply a collection of numerical data that allows businesses to track, measure, and analyze marketing performance. Marketing Metrics: The Manager’s Guide to Measuring Marketing Performance by Paul W. Farris, Neil T. Bendle, Phillip E. Pfeifer, and David J. Reibstein.
- Marketing metrics refers to the set of measures that are used by marketers to quantify, compare, and interpret marketing performance. Marketing Metrics: A Guide to Measuring Marketing Performance by Leigh McAlister.
- Marketing metrics are tools for assessing the health of the marketing function and the value it delivers to the firm. “The Definitive Guide to Marketing Metrics & Analytics” by Marketo.
What are some example marketing metrics?
Some examples of marketing metrics include:
- customer lifetime value
- response rate
- brand awareness
- sales conversion
- market share
- return on marketing investment
- profit margin
- market penetration
- share of customer
- sales revenue
- customer acquisition cost
- customer retention or loyalty
- net promoter score
- bounce rate
- click through rate
As you can see, marketing metrics are all INDIVIDUAL measures of various of marketing performance, actions, and/or inputs and outcomes.
What is meant by marketing analytics?
Marketing analytics is the process of combining appropriate metrics to gain a better understanding of the market, to identify insights, to evaluate marketing performance, and so on.
Therefore, analytics is the process of interrelating various metrics and using them together, not the actual metrics themselves.
Here are some formal definitions and explanations of what marketing metrics are:
- Marketing analytics is the application of data science to marketing data. It involves using statistics and modeling to analyze historical data, determine the impact of marketing decisions, anticipate future scenarios, and optimize resource allocation to achieve marketing objectives. A Concise Guide to Market Research: The Process, Data, and Methods Using IBM SPSS Statistics by Erik Mooi and Marko Sarstedt.
- Marketing analytics encompasses the technologies and processes by which marketers can evaluate the success of their marketing initiatives. It provides marketers with a way to understand how their marketing actions affect their relationship with customers and how customers respond to their marketing efforts. Data-Driven Marketing: The 15 Metrics Everyone in Marketing Should Know by Mark Jeffery.
A Simple Example is Google Analytics
Probably the most commonly known analytics system is Google Analytics. For example, to determine the overall level of engagement of a website, a marketer would review the following marketing metrics in a combined set.
- User/sessions
- Number of page views per session
- Bounce rate
- Percentage of returning visitors
- Total time on sites
- Particular pages visited
By using these individual metrics in combination, marketers and analysts can better evaluate their marketing actions, as well as potentially gaining market insights.
Marketing Analytics = Greater Market Insight
By looking at multiple metrics at the one time, and perhaps interrelating them and even constructing additional metrics from them – a marketer is able to generate far greater insight into the marketplace and their brand’s/firm’s marketing performance.
This is because marketing analytics tries to leverage the data provided by the marketing metrics, with the goal of deriving meaningful insights and patterns that can inform strategic decisions.
Marketing analytics helps marketers understand the effectiveness of their marketing initiatives as a whole. It takes into account all marketing efforts across all channels over a span of time.
It helps answer questions like:
- Which marketing activities are most effective?
- What is the customer journey like?
- How are our marketing efforts impacting the bottom line?
- Which customer segments are most valuable?
What’s the Difference?
In summary, marketing metrics give you the “what” – they tell you what is happening.
In contrast, marketing analytics provides the “why” and “how” – it helps you understand why something is happening and how you can optimize your efforts for better results.
Both are crucial for developing a robust and effective marketing strategy. Utilizing metrics without proper analysis can lead to misguided decision-making, while analysis without accurate metrics lacks the grounding data needed to form actionable insights.
EXAMPLE: Converting Marketing Metrics to Market Insights via a Marketing Analytics Process
Let’s take the example of an email marketing campaign. Here are the marketing metrics you may have gathered from the campaign:
- Number of emails sent: 1,000
- Number of emails opened: 200 (Open Rate: 20%)
- Number of click-throughs: 50 (Click-Through Rate: 5%)
- Number of conversions: 10 (Conversion Rate: 1%)
These are the basic metrics that tell you how the email campaign performed on the surface. They give you a sense of the “what” – what happened in your email campaign.
But these metrics by themselves may not provide enough information to improve your future campaigns. This is where marketing analytics comes in.
To convert these metrics into analytics, you’ll want to dig deeper and look for patterns, correlations, and insights. Some things you might do include:
Segment Analysis:
Divide your email list into different segments (e.g., new subscribers vs. old subscribers, those who purchased before vs. those who haven’t, demographics like age or location, etc.).
Analyze the open rate, click-through rate, and conversion rate for each segment. This could help you identify which segments are most engaged and most likely to convert, informing your future targeting strategy.
Content Analysis:
Examine the emails that had the highest open rates or click-through rates.
What did they have in common? Was it the subject line, the time it was sent, the type of content, the offer made, or something else? This analysis could help you identify best practices for your email content.
Trend Analysis:
Look at your email metrics over time.
Are there any trends? Do your metrics improve after certain changes were made, or are they slowly decreasing? Spotting these trends can help you understand what’s working and what’s not.
Cost and ROMI:
Calculate the cost per conversion by taking into account the total costs of the email marketing campaign (cost of email marketing software, man-hours spent, etc.) and compare this to the revenue generated from the conversions.
This can help you understand the return on investment of your email marketing efforts and whether it’s financially beneficial.
In each of these cases, you’re going beyond the surface-level metrics to uncover insights that can inform your marketing strategy.
That’s the difference between marketing metrics and marketing analytics: metrics tell you what’s happening, while analytics helps you understand why and how you can improve.
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