Analytics spend to soar but major issues still loom large

data_insight 2Spending on data and analytics infrastructure is expected to grow at a CAGR of 10% from $22bn in 2022 to $32bn in 2026 in the US, UK, and EU, although marketing teams must innovate and overcome challenges such as privacy regulation and loss of data identifiers to engage with customers effectively.

So says a new study by Winterberry Group, “From Data to Insight: The Outlook for Marketing Analytics”, based on survey findings from 200 European and US marketers, along with interviews conducted with industry experts. It examines, and defines the present and future state of marketing analytics as well as use cases, industry challenges and factors for success.

The growth is attributed to technological advancements and process improvements that have enabled businesses to achieve more with less reliance on people, empowering business analysts and engineers to use readily available technology, while reducing reliance on individuals with advanced degrees and offshore talent.

Even so, analytics maturity among marketing organisations is still a work in progress, with 47% reporting themselves as either “emerging” or “progressing”, and only 10% having moved to leader status.

The research identified maturity levels based on the complexity and type of use cases for which organisations embrace analytics. The results indicate that most marketers have evolved beyond descriptive analytics and are now using predictive and prescriptive analytics to drive decision-making – with European marketers evolving more rapidly as a result of limits on data availability.

The primary analytics use cases focus in five areas – audience intelligence; the customer journey and experience; commerce; creative and content; and media measurement and attribution – where marketers use analytics to better leverage the vast amount of data to understand, predict and optimise their decision-making.

Media measurement and attribution is one of the most prevalent areas for marketing analytics, despite the challenges posed by cookie deprecation, the resulting lack of standard identifiers and the growing number of data privacy regulations.

The future solution will most likely involve elements of econometrics-based marketing mix modeling, as well as deterministic and model-based attribution solutions from a range of open and closed sources. the report predicts.

Winterberry Group managing partner Michael Harrison said: “As the use cases for analytics continue to expand, marketing teams must innovate and overcome challenges such as privacy regulation and loss of data identifiers to engage with customers effectively.

“Organisations leading the charge in analytic decision-making have demonstrated that a cohesive strategy across data, technology, people, and processes is key to success. We predict strong expansion in marketing analytics investments and use cases, but organisations must be flexible and capable to adapt to an evolving environment.”

Though the analytics and data infrastructure market is entering a period of intense growth, it is not without its issues. The research identifies four key challenges to the analytics industry’s widespread use and acceptance in the US and EU: A shortage of talent; data quality and silos; measurement of “black boxes”; and third-party cookie deprecation.

Analytic Partners founder, president and CEO Nancy Smith said: “The best way to drive adoption of analytics is through decision-making based on measurement and insights that are tested, trusted, and backed by data.

“From engaging customers more effectively to improving financial performance, companies have a great opportunity to get ahead by using data strategically.”

Related stories
Pressure soars as data becomes a victim of its success
Business chiefs ‘must deploy data to fight disruption’
Brands plan to up spend on data tech to fight downturn
Tech, talent and data insight key to riding out recession
Most marketing teams lack skills to be truly data driven
Where will we be in 2023? The industry has its say…
Where will we be in 2023…with data-driven marketing?

Print Friendly