Data-driven or data dud? How can you tell?

When every marketing and media agency in the industry says that they are ‘data-led’, how can you identify which one is the data savvy agency you really need? James McDonald and Tom Evans offer some practical tips for how brands and businesses can identify which agencies truly use data to add value and drive tangible results.

Do you know how to tell the difference between an agency that says they know what to do with their clients’ data and one that actually uses clients’ data to add value to advertising, marketing and media strategy?

Of course you are going to do your due diligence when searching for your next agency partner. During that process, asking them for real-world examples of how they have found value in their clients’ data will help you to identify those that are just talking a good game.

Here are a few other tips to help you recognise an agency that knows what it’s talking about when it comes to data usage and analysis for effective marketing purposes. You can apply these to the agency you’re currently working with or any that are pitching for your business.

Are they speaking in a language you understand?

You shouldn’t have to be the world’s foremost data analytics expert to understand when your agency partner starts talking about what being data-led or data-driven means to them.

If they are speaking in a way that you can’t understand, then they probably don’t know what they are talking about. If they can’t relate what they are saying to your business or objectives during a pitch or when recommending a particular ‘data-led strategy’, you would be wise to ask them to try again before you take any next steps.

Why would you invest in a strategy you can’t understand and they can’t explain?

Are they talking about Business Data or just Ad Data?

Are they linking advertising, marketing and media strategy to business results? Are they talking about making use of or incorporating your business data and ways to link the ad data to the business data? Or do they just use advertising data to assess and improve?

You can optimise an advertising campaign all you like, but if it doesn’t help sell, all you are doing is wasting your money more slowly.

Do they know the difference between information and insights?

You can derive a lot of information from data just by reading a report. There is certainly much more to be gained from advanced analytics that draws on a variety of relevant data sources and looks for correlations, outliers and answers to your questions.

But you need more than information; you need insights. Actually, you need actionable insights. There’s a difference. Ask for examples of the kinds of actionable insights they have experience delivering, and then see what you think.

Here’s one from us:

Information = Search is the most responsive channel for leads

Insight = When you spend less on search and re-allocate that budget to other media channels, leads go down but sales go up.

Actionable insight = The point of diminishing return for monthly search investment for maximising sales is $X.

Is what they are talking about even doable?

Super creative, blue-sky ideas can be so impressive they can overshadow common sense. You must consider the practicality of the pitch before you get excited about a data strategy based on data you don’t know how to access, or before you have your data management processes in order or leveraging untested, greenfield analytics tools.

The most effective data strategy is a data strategy that works and can be implemented. The smartest data strategy in the world is worthless unless it can be implemented.

This isn’t just about data smarts, it is about data practicability. In other words, is the data strategy they are pitching doable?

Are they asking the right questions?

If you are working with an agency that has never asked how your business makes money or measures business success, drop them right away.

Your agency partner should be asking questions to delve deeper into how your brand does business, and how it measures success in various ways. They should want to know things like what you believe impacts your sales or profitability, what kinds of sales or business development KPIs you have in place, what business trends you are tracking, and more.

That’s a lot for the pitch stage, but an agency that would ask these types of questions once on board should give you some indication of this during the pitch and high-level strategy recommendation process, or when they talk about how they’ve helped other clients achieve success.

If they are not trying to use data to link advertising, marketing and media strategy directly to business objectives that matter to your business, then they are not the most data savvy agency you can find.

Do they test and measure for the right things?

‘Test and learn’ is a phrase that gets used a lot to imply advanced data capabilities, or to imply that they will measure for data that will tell you how well the recommended data strategy or digital campaigns are working.

But most times it is simply referring to testing a digital only point solution and measuring how well campaign creative works in isolation.

They might be able to prove that Creative A works well in native, but what did it do for other channels? What were the specific impacts on specific channels? Did it cannibalise efforts in another channel? What did the test do for lead quality? Did it help or hinder lead to conversion ratios? What did any conversions do for margins or profit? Are those relationships being measured? Is this activity driving shareholder value? Is that being measured?

Data-driven business outcomes can only be created when your agency partner demonstrates an understanding of controllable marketing levers, plus uncontrollable factors, and how they can impact your business.

They need to be able to discuss your marketing data strategy in terms of commercial outcomes, and in terms that are relevant to your business.

James McDonald and Tom Evans are the co-founders of independent, fast-growing, full-service media agency Audience Group and Ron Ramaiya heads up Audience Analytics.

Photo by Austin Distel on Unsplash.