What Are Analytics and Why Do They Matter?

Jan 11, 2023 | Analytics, Digital Marketing, From Joe, Marketing Strategy, Web Design

It’s been said that “you can’t manage what you can’t measure.” Although it’s not clear who originally coined that phrase or even the exact wording – the essence of it rings true.  Conversely, another version of the same idea was articulated by Lewis Carroll in Alice’s Adventures in Wonderland:

“Alice: Would you tell me, please, which way I ought to go from here?

The Cheshire Cat: That depends a good deal on where you want to get to.

Alice: I don’t much care where.

The Cheshire Cat: Then it doesn’t much matter which way you go.

Alice: …So long as I get somewhere.

The Cheshire Cat: Oh, you’re sure to do that, if only you walk long enough.”


Most of us in business have neither the time nor resources to meander down a random path towards hopeful success. 

One of the best ways to optimize your path to success is to use analytics.  Analytics are concerned with the discovery, interpretation, and communication of patterns in data.  Simply stated, analytics help provide insights and knowledge.  Analytics are based on data, which are facts or information collected for analysis.  Thus, data without analytics is fundamentally useless.  Data has to be analyzed to turn it into meaningful insights.  Consequently, insights lead to better decision-making and actions.

Consider this example.  Suppose your company website had 10,000 visitors last month.  That’s data and not very helpful without some context.  Let’s expand the example and reconsider the data (website visitors) over a period of time using analytics.  If your organization identifies website visitors as an important metric (a specific value deemed important to measure), then the number of visitors would be tracked over a period of time. Let’s further stipulate that your organization started an online advertising campaign to increase web traffic over a 90-day time period.  Analytics can provide insight into the effectiveness of your campaign.  Therefore, using analytics, you would be able to measure the campaign effectiveness and use that to make business decisions.

Website traffic analytics example:

DATA – facts
Month 1 – 10,000 website visitors
Month 2 – 15,000 website visitors, $1K online advertising expense
Month 3 – 20,000 website visitors, $1K online advertising expense
Total advertising expense = $2K

METRICS – specific measurements to track
Website visitors
Advertising expense

ANALYTICS – Insights gained from interpreting the data
Web traffic increase = 200%
Cost per click (CPC) = 20 cents ($1,000 / 5,000 clicks)

Further, let’s stipulate that for every 1,000 site visitors, 100 will purchase a $10 widget.
Conversion rate = 10% (100 / 1000)
Value-per-conversion (VPC) = $10


So was the marketing campaign in the example above a success?  Let’s use analytics to find out.

In a previous blog post, we talked about MROI (Marketing Return on Investment). MROI analytics help determine the profitability of a marketing investment.  Use the formula below to find out.

Total site visitors = 10,000
Total conversions = 1,000 (10,000 x 10%)
Total sales = $10,000 (1,000 x $10)
Total marketing cost = $2,000

(Sales – Marketing Cost) / Marketing Cost x 100 = Marketing ROI
(10,000 – 2,000) / 2,000 x 100 = 400% ROI!

Yes, using analytics we have determined that a $2,000 investment in advertising generated $10,000 in new sales, which is $8,000 of profit that generated a 400% ROI.  Indeed, the campaign was a huge success. You can read more about ROI here.

Analytics are important because they:

  • Quantify business results
  • Help establish fact over opinion
  • Assist with decision-making
  • Provide insight into effectiveness
  • Identify efficiencies
  • Verify hunches and intuitions

Although I personally believe in the power of instinct and experience, it’s important to temper that with data and analytics. Read about 4 Ways Keeping Track of your Analytics Will Help you Get the Most Out of your Website.

Need help determining how effective your marketing is?  Click here and we’ll be happy to help you.