Understand the Purpose of Digital Analytics

Peter O’Neill
Reading time: 3 minutes
8th November 2019

Defining the purpose of Digital Analytics is the starting point in every training course and many of my talks that I give.  It is critical to understand the purpose of Digital Analytics before commencing work or investing in it, so you understand why this investment is important.  I created this definition years ago now and have reused ever since.  It is a simple statement with three key components highlighted.

The word intelligence could easily be replaced by “information” or “insights”.  It reinforces the message that the important output from Digital Analytics is not the data or reporting.  By themselves these data and the reports are meaningless, instead the value is derived from the intelligence that can be extracted from them.  If you are not focused on this transformation from data to useful intelligence, you should not bother starting.

So how to define “useful”?  Quite simply, it means being used to inform the actions being taken and the decisions being made within the business. If amazing insights are being generated but then ignored within an organisation in favour of opinions, Digital Analytics is again a waste of time.  It is only when people change their behaviour and take different actions informed by the intelligence from the data that Digital Analytics becomes meaningful.

There is an underlying assumption here that actions informed by the intelligence extracted from data are smarter actions and therefore more likely to be optimal actions. As such, these actions will lead to better results for the organisation.  The better results will be in the form of an improvement in performance for the business, helping to hit and exceed objectives and targets.

To be quite blunt, the purpose of Digital Analytics is to make organisations more money (or an equivalent measure of success).

This all sounds nice but what are practical examples?  You have the obvious big wins of discovering a bug preventing purchases on the mobile website for a large UK retailer or the stories of winners from A/B test results that increase the conversion rate by 35%. But what does working smarter mean.

Say one of your tasks is to select the products (or content) to appear in your weekly newsletter (or on the homepage or on social media).  You do this every week and it will be done whether you do or don’t have data.  With no data or with no Digital Analytics data, you may select the products are that are new, that are leading a promotion and/or that have sold the most in the previous week.

Working smarter means moving beyond what did sell the most to what could sell the most.  Selecting products that didn’t have great visibility last week but, when viewed, are purchased at a much higher rate compared to other products.  Increasing the visibility of these products can lead to higher incremental sales than doing so for products that currently sell more but at a lower conversion rate.

Working smarter in this way won’t increase your conversion rate by 35% with one action.  But by backing up the tasks that need to be performed anyway with data, the right decision is more likely to be made and, as a result, profitability for the business will increase.  Adding up all these smarter tasks across the entire business and over days, weeks and months will have a significant impact on your business bottom line.

One final point.  Data is critical but don’t follow it blindly.  The term Data Driven concerns me if businesses are purely following data points without understanding what they mean.  My preference is Data Informed, where you combine the data with the knowledge/experience of the people within the organisation to generate real intelligence.

Google Analytics: 25 Tips, Tricks and Hacks

This was tip #1 of 25 from a presentation given in late 2016.  The original presentation can be found in this summary blog post that will include links to a blog post for each tip (when they are all written).

If you would like to know more about how to use the intelligence from Google Analytics data to make smarter actions that will lead to better results for your organisation, check out the free training workshops Ayima offers, in London and beyond.  Or get in contact with us and we can talk you through how we can help.

Written By Peter O’Neill
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