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Data-Driven Marketing

Everything You Need to Know About Data-Driven Marketing

Data driven marketing allows brands to run highly targeted and personalized campaigns (e.g., retargeting campaigns). Here's what you need to know.

13 mins read time
Sabih Javed

Apr 29, 2021

Marketing has changed a lot. Gone are the days when marketers used to run mass marketing campaigns on radio and television with no personalization. Today’s marketing is based on data. The way marketers use data to run highly targeted and personalized marketing campaigns (e.g., retargeting campaigns) has changed everything. From traditional to digital marketing and now data-driven marketing, we have come a long way.

If you are unaware of what is data-driven marketing and its value for your business, read on to find out everything about it.


What Is Data-Driven Marketing?

Data-driven marketing uses data to power marketing campaigns. The data is collected by the brand or acquired from third parties. It is then used for targeting, personalization, and optimization of marketing campaigns. The idea is to use data for decision-making to improve marketing and ROAS across all marketing channels.

For example, collecting email addresses, segmenting subscribers based on demographics, and then sending personalized newsletters and products is a perfect example of data-driven marketing. 

Once you start collecting data, you can use it in all types of marketing campaigns. GitHub, for example, partnered with Time magazine to find what type of foods Democratic and Republican supporters prefer. This data-driven marketing campaign linked food choices with user’s political affiliations that can be used in a wide range of marketing campaigns.

How Does Data-Driven Marketing Work?

There aren’t any hard and fast rules as to how you need to collect data and how to use it for marketing. The basic idea is to use data in all types of marketing.

Here is how data-driven marketing works:

  1. Data is collected throughout the business, especially marketing touchpoints. Whenever a potential buyer interacts with your business, you need to collect data.

  2. The data is then analyzed to find patterns. For example, collecting demographic data from buyers might reveal that females between 20–30 compromise more than 50 percent of your customers.

  3. You need to use the data in marketing campaigns. Create campaigns based on data analysis. For example, if females between 20–30 are your primary audience, you need to create content to target them.

  4. Finally, use data generated via marketing campaigns to improve and optimize marketing strategy. For example, conversion rate optimization is a technique that is entirely based on data that helps you improve conversion rate throughout your funnel.

Data should be the center of whatever you do with marketing and all the decisions must be based on nothing but data.


Why Should I Use Data-Driven Marketing?

Data-driven marketing has unmatched benefits that make it the best in the game. Since it takes an unconventional approach to marketing and it costs money (for data collection and analysis), it doesn’t always get the love and attention it deserves:

The key reasons why you must switch to data-driven marketing are:

  1. It works on the basis of numbers instead of judgment. This is the key reason why you must take data-driven marketing seriously. It clearly shows you what is to be done, why it should be done, and what results to expect once you do it.

  2. Data-driven marketing improves targeting. You get to know your audience and customers better as you start collecting and analyzing data.

  3. Personalized marketing is possible with data-driven marketing. If you know 75 percent of consumers who buy product A also buy product B, you'll be able to offer highly personalized recommendations during checkout.

  4. It also helps you improve UX and CX. For example, you can track mouse movement (data collection) to see what elements on a landing page visitors love interacting with. Based on this data, you can tweak your landing page by removing elements that generate the least interaction. This improves UX as they see and interact with elements they like (and don’t see anything that they don’t like).

  5. Data-driven marketing improves revenue and ROI. When data drives your marketing decisions, it works great. You can predict ROI and expected conversions before initiating a marketing campaign based on data.


Data-Driven Marketing Statistics and Success Stories

Want to see numbers and stats on data-driven marketing? Check out the following statistics and success stories:

  1. 64 percent of marketers believe that data-driven marketing is crucial for the economy. (First Page Strategy)

  2. 72 percent of marketers are more likely to invest in the quality or quantity of data they collect. (First Page Strategy)

  3. Brands that use data-driven personalization see 8x ROI on marketing budget. (First Page Strategy)

  4. 40 percent of brands reported that they're planning to increase data-driven marketing spend. (First Page Strategy)

  5. Two out of three marketers reported that data-driven decisions are more effective than gut instincts. (Think with Google)

  6. 75 percent of marketers say that lack of education on data and analytics is the biggest barrier to making data-driven decisions. (Think with Google)

  7. 76 percent of marketers base their decisions on data analytics. (Gartner)

  8. Brands that use data-driven strategies drive 5–8x more ROI as compared to brands that don’t. (Invesp)

  9. A tourism company increased its website conversion rate by 40 percent with the help of data-driven website tweaks. (Marketing Sherpa)

  10. Very increased its revenue by £5 million in a single year with the help of data-driven personalization. (First Page Strategy)

  11. A data-driven SEO campaign helped a review website acquire 178 high-quality links in two months. (Marketing Sherpa)

  12. Targeted emails with personalized content based on data helped an online bookstore increase email open rate by 290 percent, CTR by 12 percent, and conversion rate by 80 percent. (APSIS)

  13. Data from the heatmap tool helped a nonprofit organization reduce homepage exit by a whopping 3.5 percent. (Marketing Sherpa)

  14. 47 percent of data records have at least one critical error. (HBR)

  15. 54 percent of brands report data quality and completeness is the biggest challenge to data-driven marketing. (Invesp)

  16. 57 percent of marketers interpret data incorrectly and get incorrect results. (Wharton)


How to Implement a Data-Driven Marketing Strategy

As much as 81 percent of marketers believe that implementing a data-driven marketing strategy is complicated:

At the end of the day, it all comes down to implementation. You know it works, everyone does. The difference between successful and unsuccessful data-driven marketers is that successful ones focus on implementation while their counterparts focus more on the creation and development of a strategy.

A strategy is useless if it isn’t implemented — religiously.

Follow these steps for the successful implementation of your data-driven marketing strategy:

  1. Create and share your data-driven marketing strategy with the marketing team and related departments.

  2. Identify data sources that you need to meet your goals.

  3. Collect, analyze, and report relevant data from the appropriate source (internal or external). Make sure data is in usable form (such as a report or chart).

  4. Connect and integrate all the marketing tools with data collection tools (such as CRM).

  5. Launch your marketing campaign to meet marketing objectives.

  6. Link campaign data with the CRO tools and start experimenting based on data and results. Create a data management team within the marketing department that must be responsible for data collection, cleaning, analysis, reporting, and automation.


Are You Ready for a Data-Driven Marketing Strategy?

Data-driven marketing requires a systematic approach where you constantly collect and refine data to keep fueling your marketing campaigns. It mostly works on autopilot as long as you are feeding new data into the system. It sits atop data. The moment you stop collecting data, you won’t be able to use it for marketing.


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