We're thrilled to be joined by Alex Sofronas (Advanced analytics, DirecTV and Host of Marketing x Analytics) on this week's episode. We discuss data-driven marketing, revenue marketing, the future of marketing analytics and more!
April 4, 2022
Welcome to the 8th installment of the Factors Podcast. This week, we're thrilled to be joined by Alex Sofronas (Advanced analytics team, DirecTV and host of Marketing X Analytics). We discuss data-driven marketing, B2B revenue marketing, and the future of B2B marketing analytics. Catch Alex's Marketing X Analytics here!
Just as the seafaring people of the past relied on the stars, their maps, intuition, and various other estimations for their voyage. The same could be said about business before advanced computing and data collection. In many ways, modern analytics’ impact on business is as profound as giving these seafaring explorers a GPS. With their GPS they would know where they were going, where they were, how much further they needed to go, eliminating any guesswork. The value of marketing analytics is the ability to provide a set of navigation instruments to a business to highlight where they are, where they should go, and how close they are to getting there.
Another way to put it would be to bring scientific rigor into the marketing process and test out your hypothesis using data. Allowing you to be able to measure your progress to a stated goal. Analytics is consubstantial with strategy in business. While you could measure anything under the sun, without a goal, analytics isn’t going to help you. The measurement has to be in context to something. For example, if your goal was to reduce customer churn because your analytics indicates a high churn rate. Then you have a direction that will allow you to use analytics to maybe identify certain campaigns that pull in customers that churn quickly. Your analytics and strategy need to go hand in hand in order to give context to your analytics.
There is a cultural divide in the marketing world for revenue marketing. Some marketers are averse to tying marketing activity to revenue, as there exists a gray area where revenue contribution could be understated because of activity that can’t be measured accurately. While the others strongly believe in tying marketing activity to revenue. I (Alex) favor the latter. I believe that we should invest in marketing that is measurably effective despite there being said gray area.
What about those areas/channels that are hard to measure, like TV or a podcast? The first thing to acknowledge is that they’re not impossible to measure. It’s just in a different context from the rest of the business, you would have to start measuring everything differently to account for the activity that is hard to measure. For instance, if you were to measure TV, and utilized incrementality testing. You would have to run incrementality testing on your paid searches as well to get parity and a comprehensive understanding of everything. This is more a cultural problem than it is a technical one that requires a cultural shift in the marketing world. It isn’t impossible to measure these areas, we just need a new set of metrics to establish success.
In the modern B2B world, digital transformation is table stakes. We’re at a point of near-real-time decision making for analytical executives who shift incremental dollars to channels through their intelligence capabilities. The question is what do you do with all these new innovations in marketing? That is where customer-centricity comes in. The goal of an ad campaign is to deliver a meaningful message to a potential customer that increases their likelihood of making a purchase. From an analytical perspective, understanding that messaging is still unrefined, as even the most advanced sentiment analysis struggles to identify sarcasm. Alternatively, the innovations in understanding what drives a customer to make a purchase have thrived. Serving as a link between marketing and revenue. This is mostly in part due to multi-touch attribution, studying thousands of customer experiences across various customer touchpoints, evaluating how long the customer has stayed with the company, and if it contributed to their conversion goals. It’s important to also acknowledge the gray areas and invisible factors that impact customer experience and potentially limit our ability to measure our campaigns. As time passes, our attribution modeling will improve and there will be progressively lesser customer activity we cannot measure.
Besides the fact that in a B2B market space you’re marketing to a few very specific people or decision-makers from a target company. B2B marketing is almost identical to B2C marketing. They share similar marketing fundamentals like designing ads that resonate with the customer, optimizing customer favored channels, and improving the customer experience overall. Their buying journeys are also very different, but the way their marketing operates on a high level is not that different.
Revenue is a way in which we can measure the impact marketing has on the money coming in. But it is not a holistic measurement of marketing’s value on its own. Apple for example would not have benefited from measuring revenue for its famous advertising which was mostly upper-funnel brand advertising. This is because lower-funnel marketing benefits from measurement, while upper-funnel performs the worst. It is our inability to measure upper-funnel activity and our need to move from traditional gut-driven marketing to attribution marketing that forms the core of the cultural shift.
Another challenge in making this transition is the alignment of sales and marketing. The reason for this is due to incentives. Both sales and marketing want to claim responsibility for driving revenue. When you have an organization spending millions of dollars on generating MQLs, then having the sales team close the deal. Who do you credit? This is a problem that hasn’t been solved in the industry with varying opinions on the best way to value activity. It is a complex problem whose solution differs by company.
More often than not, different types of data are annexed to different databases. Despite your access to the data, it will prove to be time-intensive. That being said, this is something that will probably be fixed in the next decade. The real problem however is the data that is coming in is not unified, which is a result of flowing into different databases. If we can get all companies on the same platform to broker all the data it collects on their customers, there would be no need for different databases.
What the future holds is fewer annoying advertisements as our analytics capabilities improve. Because what annoys a customer won’t drive any purchases. Ultimately aligning customer experience with company goals. And when we measure inefficiencies in our marketing, this will allow us to remove misplaced ads in the customer experience.