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Using marketing analytics for superior growth

$200 billion Potential worldwide savings from an integrated analytics approach to marketing

There’s no question that the development of better analytic tools and approaches has in recent years given business leaders significant new decision-making firepower. Yet while advanced analytics provide the ability to increase growth and marketing return on investment (MROI), organizations seem almost paralyzed by the choices on offer. As a result, business leaders tend to rely on just one planning and performance-management approach. They quickly find that even the most advanced single methodology has limits.

A company’s overarching strategy should ground its choice of analytical options.

The diverse activities and audiences that marketing dollars typically support and the variety of investment time horizons call for a more sophisticated approach. In our experience, the best way for business leaders to improve marketing effectiveness is to integrate MROI options in a way that takes advantage of the best assets of each. The benefits can be enormous: our review of more than 400 diverse client engagements during the past eight years across found that an integrated analytic approach can free up some 15 to 20 percent of marketing spending. Worldwide, that equates to as much as $200 billion that can be reinvested by companies or drop straight to the bottom line.

Here’s one example. A property and casualty insurance company in the United States increased marketing productivity more than 15 percent each year from 2009 through 2012 without raising marketing spending—at a time when related spending across the industry grew 62 percent. As the CMO put it: “Marketing analytics have allowed us to make every decision we made before, better.” 

As one CMO put it, “Marketing analytics have allowed us to make every decision we made before, better.”

Anchoring analytics to strategy

A company’s overarching strategy should ground its choice of analytical options. Without a strategy anchor, we find companies often allocate marketing dollars based largely on the previous year's budget, or on what business line or product fared well in recent quarters. Those approaches can devolve into “beauty contests” that reward the coolest proposal or the department that shouts the loudest, rather than the area that most needs to grow or defend its current position.

A more useful approach measures proposals based on their strategic return, economic value, and payback window. Evaluating options using such scores provides a consistent lens for comparison, and they can be combined with preconditions such as baseline spending, thresholds for certain media, and prior commitments.

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