Maximizing Marketing ROI with Business Analytics and AI

According to a survey, you can save 15 to 20 percent of your marketing budget if you fully optimize your marketing using business analytics.

In other words, if you record every strategy used in your marketing campaigns and save their results, you can analyze this data after a sufficient amount of time to determine what’s working and what’s not. This is the best use of business analytics or data analysis in marketing and can save you up to 20 percent of your marketing budget.

Here’s how it works:

Once you have a significant amount of data, you will realize that some strategies work well in certain situations, while others are more effective in different scenarios. By leveraging business analytics, which is essentially artificial intelligence, you can make much better decisions and save a significant amount of money.

The best example of using business analytics or data analysis is running campaigns on social media platforms like Facebook. If you keep running your ads on these platforms, their algorithms will automatically analyze your campaigns to identify your ideal customers based on clicks and conversions. This results in more targeted advertising and increased conversions.

Makes sense?

Now, before we explain the application of business analytics and AI in marketing, let’s help beginners understand how business analytics works and how business analysts can transform their business growth.

What is business analytics?

A simpler definition of business analytics can be,

Business analytics is a process to transform data into useful information with the help of tools and predict market trends based on the extracted insights and hence make improved decisions.

By definition of business analytics, one can say that it’s pretty simple to look at the data, make predictions, and make decisions but a business analyst understands that practically it’s not that simple.

It requires precision, creativity, curiosity, interest, and huge efforts to extract useful data, make accurate predictions that yield you to make company-leading decisions. Any mistake anywhere can you result in useless if not harmful, results.

But if done properly, business analytics helps businesses grow faster.

Especially, the role of business analytics in marketing has become inevitable. That’s why 97% of businesses use predictive analytics in marketing (that’s pretty similar to leveraging data science).

Predictive analytics is one of the most important parts of business analytics. Here is a piece of information to make it digestible for all readers.

Business analytics has three major steps – we call them three types of business analytics.

1. Descriptive analytics
2. Predictive analytics
3. Prescriptive analytics

In descriptive analytics, a business analyst looks at the history, what actually happened earlier, and extracts useful data. This part is critical because there is always vast useless data along with good data. It demands great interest and expertise to pick the right stuff out of the trash.

The other two steps of the process are even more important for business analytics (data analysis) because these are the areas where interest, curiosity, and creativity work altogether to make the best decisions.

In predictive analytics, with the help of history, business analytics predicts where the trends can go. This part of the process is the pillar of what a business will adopt for the future. In this part, a business analyst predicts what will work and what will not.

Along with all other areas of a business, predictive analytics is used in marketing to cut the price. We will discuss how predictive analytics can be used in marketing.

And at last, in prescriptive analytics, a business analyst helps a business make decisions based on the predictions.

Now let’s see how business analytics can be practically used in marketing and sales. Let’s dive into business analytics vs marketing.

Application of business analytics and AI in marketing:

It’s found that companies spend $1 trillion on marketing.

What’s the purpose of spending this much huge amount on marketing?

Definitely, conversions.

No matter what product or service you are offering, if you are marketing it, you want to sell it. That’s the biggest goal of any marketing campaign. Isn’t it so?

But do you know, some businesses spend less money and get more conversions than some others? Why?

Here is an example to make you understand it.

In research, it’s found that some car dealers spend $1500 a car sold on traditional marketing methods while others spend ten times less with digital marketing strategies.

This is the result of business analytics in digital marketing. By utilizing predictive analytics in digital marketing, one can get the best results with the least spending.

Let’s dig a little deep into it.

Unlike conventional marketing, in digital marketing, you can control who will see your ad and when. So, using predictive analytics you show your ads to the best audiences. Thus, leveraging business analytics becomes your best tool to maximize return on investment (ROI).

That’s why you get ten times more results with the same budget.

It’s not only digital marketing but business analytics are important in traditional marketing as well.

An analyst helps in digital marketing the same way he helps you make decisions on how you can get the best results with traditional marketing with market research.

Use of business analytics in digital marketing to maximize ROI:

If you are running an ad anywhere on the internet, you always get data for your ad campaign.

Either you run ads on the search engines like Google or run them on big social media platforms like Facebook, X, LinkedIn, etc. All of them provide you with the best possible information, we call that information – data.

For instance, you are selling a course and running a campaign on Facebook.

You set no limits for your ad and see how it goes for all Facebook users. First of all, it will appear in front of all the users of Facebook. Sooner with the help of the Facebook algorithm, it will automatically find relevant people, and the ad will get a reasonable amount of conversions.

Say, you got 1% conversion along with huge data. The data might contain, age, gender, interest, region, engagement, and much other stuff about the users who saw your ad.

Now here is the time to utilize predictive analytics for marketing.

With predictive analytics, you will make groups of the people who purchased your course, and who engaged with it. This is called ICP (ideal customer profile).

Even the engagement might be of different types, and you will realize that a set of people are more likely to buy your course.

Now you will make a decision to run another campaign to target you potential customers based on your ICP. And surely the conversion rate will grow much faster than you think.

It was a simple application of how analytics can be used in marketing to minimize costs and increase conversions. But you can utilize business analytics in marketing for any kind of goal. If you do it properly, you can take huge benefits from using business analytics in your business.

Improve conventional marketing with business analytics:

Conventional marketing is outbound marketing, and you have relatively less control over many things. That’s why you can’t directly track your campaigns or target the ICP as you do with digital marketing. But still, with the help of business analytics, you can optimize your campaign to improve ROI.

Here’s how you can practically use data to boost your ROI in traditional marketing strategies:

Audience research:

Audience research is key. In fact, for every campaign, you need to conduct audience research to build an ideal customer profile (ICP) so that you can easily target them later. If you are an established business, you already have sales data, and you can see the audience’s demographics, preferences, behaviors, and pain points. If you are a new business, you can use other businesses’ data by conducting market research.

Strategic placement:

In this step, business analytics comes into play once again. To get the best results from your campaigns, you need to choose strategic locations for your offline marketing materials, such as billboards, posters, and flyers, to maximize visibility and reach your target audience effectively. You should consider factors like foot traffic, demographics, and local events when selecting placement locations.

ROI calculations:

In conventional marketing, ROI calculations aren’t easy. But you still have to do it to see what’s working and what’s not. Experts attempt to calculate the return on investment (ROI) by comparing the costs of marketing activities to the generated revenue or other tangible outcomes. To be more accurate and concise, they use surveys and feedback forms to determine what’s bringing them the most return.

This also involves business analytics to learn and get the best ROI from marketing campaigns.