Advertising on the internet and mobile has increased by 17.5% to £3.04bn in the first half of 2013 according to the IAB, an increase of £607m compared to 2011.
Analytics has played a key role in this growth by helping marketers accurately measure return-on-investment (ROI) and justify reallocating traditional media budget to digital marketing. However, with the amount of data now available to digital marketers via analytics, they're in danger of becoming data squirrels that hoard data but do nothing with it.
There aren't enough analysts in the world or hours in the day to manually analyse all the available data, and crucially, turn it into actions which optimise revenue outcomes.
The modern day digital marketer needs to consider how to turn all the data housed in analytics platforms into actions which optimise revenue outcomes through advertising technology. To do this they need to understand the three layers of digital marketing technology.
In this article I want to look at the three layers of digital marketing technology, and how they all fit together:
What you don't measure, you can't manage. Analytics platforms gave marketers the tools they needed to finally end the age-old problem of not knowing which half of their advertising is working and which half isn't. Measurement is crucial, and it's exactly why digital marketing has had the sensational growth rate it has.
However, while analytics is vital, when in a silo it can't help marketers understand how and when customers interact with multiple channels. Furthermore, it doesn't interpret the data into campaign adjustments which optimise revenue outcomes.
While analytics platforms have gathered data for marketers, the attribution technology layer is what helps them make sense of that data. Attribution's been a hot topic for marketers over the last few years as they've looked to understand the consumer path-to-conversion, and how to better allocate marketing budget and tailor messaging as a result.
However, while attribution platforms make recommendations on how to better allocate spend, they don't implement these changes. For example, attribution platforms do not translate their output into bid recommendations for particular keywords on search engines or banners on display networks.
The final layer of digital marketing technology is the optimisation layer. These technologies take the data from the previous two layers and turn them into actions which optimise revenue outcomes for the marketer. They drive incremental performance gains and time savings.
However, these platforms would struggle to do anything without the data provided by the previous two layers of digital marketing technology. Data is like the blood running through the marketing technology architecture, and without it the key final layer of optimisation couldn't happen.
Every layer of marketing technology needs the human touch, as technology cannot see past the data it is given and online campaigns are often subject to external influence. This technology infrastructure is designed to help marketers focus their time on the tasks which will have the biggest impact on the bottom line, and make up for the fact there is not always an army of analysts available to them.
It's also worth considering that not every layer in digital marketing technology needs the same label on it. It's a bit like choosing shampoo and conditioner; just because you prefer shampoo from brand A doesn't mean you can't buy conditioner from brand B if you prefer.
The same applies to marketing technology, focus on finding the best technology in each layer. Today's enterprise technology world is open and connected, best-of-breed technologies can facilitate data flow between themselves seamlessly.