As the global economy progressively evolves into a data-driven world, data infrastructure and analytics have begun to take center stage in the marketing departments of companies in the USA, UK, and EU. According to a recent study by the Winterberry Group, spending on data infrastructure and analytics in these regions is forecasted to grow at an annual rate of 10% from 2022 through 2026. This massive financial commitment suggests an upward trend from $22 billion in 2022 to an impressive $32.4 billion by 2026.
A subsequent survey, featuring responses from over 200 marketers from firms with revenues of at least $100 million, sheds more light on this shift toward data-driven strategies. Interestingly, the report indicates that although the maturity levels in data analytics are relatively high, they are still a work in progress.
Understanding the Maturity Curve
The report classifies only 10% of marketers as “Leaders.” This designation represents those who leverage adaptive and autonomous analytics to monitor, decide, and act in an automated or semiautomated manner across marketing analytics use cases. A further 38% are categorized as “Established.” They use prescriptive analytics to recommend optimal decisions across marketing analytics use cases.
The Geographical Differences in Data Maturity
An intriguing detail emerges when comparing data maturity between US and European marketers. European respondents seem slightly ahead on the maturity curve for data and measurement. However, they trail their American counterparts in technology adoption and use. In the Winterberry Group study, European respondents indicated a lack of marketing analytics technology stack as a more prevalent challenge than those in the USA. It suggests a potential area for growth and exploration for European marketers.
Impact of Analytics on Marketing Performance
Despite the geographical differences, the Winterberry Group study also reveals a substantial positive effect of analytics use on marketers’ performance. An overwhelming 78% reported a significant improvement in their targeting and segmentation performance and efficiency due to analytics. Moreover, 74% reported that their creative performance and efficiency had significantly improved due to using analytics to create, distribute, and optimize assets.
Unique Challenges and Solutions
The study further highlighted the most-cited challenges US and European marketers face concerning marketing analytics resourcing. US marketers’ lack of reliance on data-driven decisions (29% share) was the most common obstacle. In contrast, for European marketers, a lack of centralized data and analytics function across the organization (31% share) took the top spot.
Despite these challenges, most Leaders (60% share) reported having all the necessary skills to implement and use marketing analytics proficiently. It demonstrates the importance of fostering an internal culture prioritising data literacy and investment in building teams with diverse data-driven skills.
Data Quality Practices
One striking detail was the gap between Leaders and Laggards regarding data quality practices. 70% of Leaders described their company’s data quality practices as well-defined and implemented. In contrast, none of the Laggards could make this claim, further reinforcing the importance of effective data governance.
Relying on Third-Party Analytics Providers
The data also showed a reliance on third-party analytics providers, with a plurality of respondents in Europe (45% share) and the USA (48% share) stating that they only turned to such services when clear gaps were present. It points to the value of internal capabilities while maintaining strategic partnerships to bridge potential gaps.
The recent Winterberry Group study offers valuable insights into the evolving role of data infrastructure and analytics in shaping marketing strategies. As spending in this area continues to grow and maturity levels rise, the challenge for companies will be to strategically align their data practices with their overall business goals, invest in technology, and nurture a culture of data-driven decision-making. It is about improving marketing performance and transforming the business model to be resilient in the future, driven by data.
Moreover, this study serves as a stark reminder that data analytics doesn’t offer a one-size-fits-all solution. While the benefits of leveraging data are widely accepted, the challenges in implementing data strategies can vary based on geography and a company’s maturity level. Therefore, marketers must assess their unique circumstances and tailor their approach accordingly.
Despite these challenges, the fact remains that companies that have embraced analytics have seen substantial improvements in efficiency and performance. The report’s findings underscore the power of analytics in enhancing audience targeting, creative performance, and operational efficiency.
The pronounced gap between Leaders and Laggards in data quality practices highlights the critical role of data governance and the need for well-defined and implemented data quality practices. Companies aiming to harness the full potential of data analytics should prioritize establishing robust data governance structures.
In a world where marketing is becoming increasingly data-driven, it’s evident that the future belongs to those who can skillfully navigate the data landscape. Marketers should, therefore, endeavor to evolve their skills and mindsets to stay competitive in a rapidly changing environment. As this survey demonstrates, the payoff can indeed be well worth the investment.
Wrapping Up
In conclusion, the growth in spending on data infrastructure and analytics signifies the future of marketing. Companies are making significant strides in this direction, but much more must be done. As the role of data continues to expand, businesses must embrace the ongoing journey toward a more mature data analytics landscape. In doing so, they stand to gain from improved performance, deeper insights, and more effective decision-making processes.
