Analytics versus Reporting
Analytics is not reporting. It involves an element of reporting but there is more to it.
As the name implies, reporting provides the results of various metrics in pre-defined formats such as charts and tables. It usually deals with the ‘what and how much questions’.
Analytics, on the other hand, is about uncovering the areas of opportunity and sources of problems. It is about optimising. It deals with the ‘how and why’ questions. It attempts to explain why things are happening the way they are. It captures learnings, insights from the data. It sets a direction towards a resolution or solution. It produces actionable results.
Analytics is iterative, investigative. It cannot be prescriptive. It is a process of discovery. One clue leads to another until eventually the analyst can form a scientific opinion on what is happening, what is causing it, and how it can be corrected, improved or maximised.
Let’s explore a few scenarios by organisational roles to further contrast reporting to analytics.
|
Role |
Reporting (what and how much) |
Analytics (how and why) |
|
Marketing Director |
How much business (new and repeat) was generated from marketing dollars?
|
How can return on marketing dollars be maximised? |
|
Marketing Manager - Online Advertising |
What are the click-thru rate, conversion rate and cost per acquisition by media and creative elements?
|
How can cost per acquisition be reduced? What is the ideal mix of media and creative elements?
|
|
Marketing Manager - Email Communication |
What is the open, click thru, bounce, opt-out rates? |
What factors influence the open, click-thru, bounce and opt-out rates and how can they be optimised? How much email marketing contributes to business development?
|
|
Events Manager |
What are registration, cancellation and attendance rates and the cost per registration? |
How can registration rate be maximised? Are we getting registrations from the right customer segments? What is causing good or poor performance in various segments? What types of events give us the best response rate? How much the events contribute to the bottom line?
|
|
Product / Merchandising Managers |
What products / product categories are popular? What are the number of orders, average order size and gross margin?
|
What shape does the conversion funnel take and how can it be optimised? How can the product mix be optimised? |
|
Website Manager / Information Architect |
What are the trends for visitations (visits, visitors, duration, pages per visit)? What are the popular pages and sections? How many users search versus browse? What are the number of blank searches, selections and exits from search results page?
|
How can the user experience be improved? How can the site’s navigation be improved? How optimal the site’s taxonomy / catalogue? How can the web page effectiveness be improved? |
Organisations wanting to make data-driven decisions need analytics.
When the decision involves web and online media, Analytics becomes Web Analytics.
Yet for more sophisticated organisations, web analytics quickly reverts back to analytics again – with a web flavour.
These companies use the web as an integrated channel with the rest of the business. Web related activities are often intermingled with other campaigns and channels. Therefore the analytics extends from web analytics to campaign response, channel and customer analytics.
Organisations wanting to make timely and appropriate business decisions need analytics.
Analytics delivers efficiency to business because it reveals strengths and weakness and hence help to define priorities. Furthermore, analytics gives us confidence that the direction being taken is the right one and will have the largest favourable impact on business.