Marketing Analytics and Product Analytics: What are they and why do you need them?
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Two of these phrases are “product analytics” and “marketing analytics,” which are often used (incorrectly) interchangeably to refer to some vague understanding that data analysis is important without specifying the whys or wherefores. But actually they’re quite different tools and require different sets of expertise and data collection methods. On a very basic level, the primary differences and similarities are obvious in the names. They are both analytical tools, one of which is focused on a product level and the other of which is focused simply on the marketing processes of customer acquisition and brand loyalty. But let’s delve a little bit deeper into what each one entails.
What Exactly is Product Analytics?
As mentioned above, product analytics focuses on the product and the product alone. They measure how customers react to interacting with your product and allow you to make shifts in how your product works. This means that product analytics, when used correctly, helps you to tweak or add features to your product based on information regarding who is using the product, which features are most popular for which segment, and what are the (potential) problem areas with your product and its rollout.
Product analytics is the analytics that covers the actual usage of the product, and their end goal is obviously to produce more engagement and more customer satisfaction.
Every data point related to the usage of the product is a part of product analytics. This means that feature-related data, product upgrades, how customers use products, which features are used the most and the least, any problems in any product right down to the singular feature level, and so on are all critical data points for product analytics.
Notably, product analytics does not involve anything regarding the discovery of your product, or the expectations before usage. Those are covered by…
What exactly is Marketing Analytics?
Marketing analytics measures the success of your marketing. Marketing now takes place across a multitude of platforms at the same time and marketing analytics takes all of these activities and puts them into one place to see how cohesive, efficient, and successful they are.
This singular view is largely the function of marketing analytics, so that marketing decisions can be made at a macro level and then condensed down for each individual channel or platform. The end goal of marketing analytics is to analyze the quality of marketing initiatives, and they’re essential to understanding the ROI of marketing activities or marketing attribution.
Marketing analytics looks at an incredibly wide range of data. This may include customers’ purchases online, customer level data, any market research and competitor research and the data therein, sales data, customer support data, data specific to a particular campaign, and so on. All of this is in service of optimizing marketing activities and ROI, driving consumer action, refining marketing campaigns, retaining customers across a variety of channels by understanding how each channel operates and performs so that you can help customers want to use the product again the next time. All of this means looking at activity data and breaking it down into hourly usage and so much more.
What are the Critical Differences Between Marketing Analytics and Product Analytics?
We’ve briefly touched on the differences above but let’s highlight them here:
1) They focus on different stages of the customer journey.
Specifically, marketing analytics focuses on customer acquisition. How can you get your product out to customers. Where do customers come from, why are they coming, what are their expectations, and what are their initial interactions with the product? Product analytics takes over once consumers are already using the product and analyzes specifically how they interact with the product itself and quantifies that for product optimization purposes. Marketing analytics is therefore focused on customer acquisition and the first stages of retention whereas product analytics starts after acquisition.
2) A focus on product improvement vs. a focus on ROI
Marketing analytics really is about trying to maximize the ROI of your campaigns and pinpointing exactly where every dollar spent is going, and how to optimize it. Product analytics is simply focused on making sure your product is what customers want, and figuring out how you can improve customer engagement.
3) Data comes from different sources
Specifically, marketing analytics uses data collected with user permission to track how users find your product, app or website. Product analytics is significantly more complex, and because it tracks user behaviour, it also uses user-specific sensitive information (log in information and the like) in order to get to know the user better. Data like Pageviews, Heatmaps, Button clicks, Bounces, Load times, and Engagement Duration are typical examples of the kinds of data needed to collect to analyze a product’s performance.
Which one is better, or do you need both?
If you’re still reading, you’ve probably figured out by now that you need both. One is critical for customer acquisition (marketing analytics) and one is critical for customer retention and the overall customer experience (product analytics). Both are valuable for broader marketing strategies. And while there is some overlap in what the two try to accomplish, they’re quite different and draw from different sources, so they really represent just a continuation of one another (and complement one another) rather than an “either/or” kind of situation. Essentially, you need to collect as much data as you can to help grow your product, and both product analytics and marketing analytics are key pillars of data collection and growth.
In today’s world, every company knows that they need to collect data to get ahead. But obviously there has to be a sense of purpose and an organization for how to collect it and what to do with it. Marketing analytics is a great tool to bring together the massive array of marketing data from across a multitude of channels and centralize it to optimize campaigns and customer acquisition. Similarly, product analytics takes all the data collected as customers use the product in different ways and brings that together to help you optimize your product and drive engagement. These tools are absolutely mutually exclusive, they are not the same thing, but they are both necessary for any aspiring business in the modern world because of how perfectly they complement each other and how they optimize the overall consumer experience.
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