In the early 2010s, Netflix was primarily known as a DVD rental service.

At the time, the company faced increasing competition from traditional cable networks and emerging streaming services. Reed Hastings, Netflix's CEO, knew that to stand out and grow, the company needed more than just a vast content library—they needed to understand their users better.

But how?

The answer was in their data and predictive analysis.

This strategic focus understanding their marketing data drove Netflix's transformation from a DVD rental service into a streaming giant and, eventually, a content creator.

By analyzing vast amounts of user data—such as viewing habits, search behavior, and even the precise moments when users paused or resumed shows—Netflix gained deep insights into their audience's preferences.

One of the most significant insights they uncovered was how much users enjoyed binge-watching entire seasons in one sitting. This led to a groundbreaking decision: Netflix would release whole seasons at once instead of weekly episodes. The success of their first major original content, House of Cards, in 2013, which was developed based on user behavior, proved the power of data-driven decisions.

By continuing to leverage data to inform content creation and user experience, Netflix rapidly grew into the streaming giant we know today, with over 200 million subscribers worldwide. This story illustrates the power of data in driving informed business decisions and underscores why marketers need to develop solid data-reading skills.

Thankfully, you don't need to be a data scientist, professional marketing analyst, or statistician to learn how to read data as a marketer.

In this post, I'll show you how.

We'll walk through the following:

1. Why understanding marketing data matters
2. Set clear goals with your data
3. Get clean data
4. 10 steps to reading marketing data better
5. Implementing and interpreting data

Let's dig in.

Why Understanding Marketing Data Matters

Like many marketers, I initially struggled understanding marketing data.

My strengths have always been creativity and intuition; I relied on them to guide my work, strategies, and creative efforts. But in time, I realized my gut feelings weren't enough. I needed to balance the art of marketing with the science by better understanding and leveraging data.

I had to learn to read and interpret data to stay relevant and successful.

It wasn't easy at first.

Every organization I worked with used different tools and software for tracking and measuring data. From marketing automation software like ActiveCampaign and HubSpot to in-house tools and nearly every marketing software imaginable, learning various tools made it challenging to feel confident in my data skills.

However, I quickly realized I didn't need to master every tool.

What mattered was understanding what data I needed and how to read it.

The statistics show that I'm not alone in this struggle.

According to the Marketing Data State of Play 2023, 59% of marketing teams claim to be data-driven, whereas 41% of marketers admit they are uncomfortable "collecting and analyzing" data. Even more concerning is that 35% struggle to "reading and understanding" the data they have.

For me, the breakthrough came when I focused on setting clear goals for data. Instead of getting overwhelmed by the numbers and tools, I asked specific questions:

• What am I trying to achieve?
• What metrics will tell me if I'm on the right track?

By narrowing my focus, I could make sense of the data and use it to guide my decisions. This mindset shift transformed my marketing approach and even helped me to create data-driven marketing teams.

Data became a tool that empowered me rather than something that intimidated me. It allowed me to make informed decisions, optimize strategies and tactics, and achieve better results.

This data-driven approach isn't reserved for tech giants like Spotify.

It can be a game-changer for any marketer willing to embrace it.

If you're reading this, that means YOU.

Let me show you how in the four steps below.

Step 1: Set Clear Goals with Your Data

Before you dive into the numbers, start with clear goals.

What do you want to achieve with your data?

Your goal or goals will dictate the data you need to track.

Remember the adage: "What gets measured gets managed."

So, do you want to:

• Increase your revenue?
• Reduce your churn and attrition?
• Expand your business or organization's brand awareness?
• Accelerate your sales cycle?
• Generate more leads and contacts?
• Improve your Google Ads CTR?

You can't optimize, fix, or scale what you don't measure. Whether you want to maximize conversions within a specific campaign or reduce your churn rate, setting a specific goal will help you identify the correct data to focus on.

For the sake of this post, remember your goals.

We'll come back to them later.

Step 2: Get Clean (Good) Data

Not all data is created equal.

While more data points can provide a better picture, quality matters more than quantity. The phrase "garbage in, garbage out" rings true here.

If you're working with flawed data, your insights will be flawed, too.

Establish a data hygiene process to ensure your data is reliable. This means that you and your team need to regularly clean and update your data, check your records for accuracy, and standardize your naming conventions, to name a few.

A clean dataset is your foundation for accurate analysis.

10 Steps to Reading Marketing Data Better

You established goals and, hopefully, have good data.

The following steps are meant to introduce you to reading marketing data. Consider this an entry-to-mid-level review at best.

This post aims to give you pointers and help you get started. If you want to dig in more, consider this post your launching pad.

1. Compare Numbers to Your Goals

The first step in evaluating your marketing data is to compare your actual numbers to your goals or projections. This comparison is crucial because it tells you whether or not you're on track to meet your objectives.

Are your campaigns performing as expected?

If not, it's time to dive deeper and figure out why.

For example, let's say your goal was to generate 500 leads in a month, but you only achieved 350. This gap between your target and actual performance prompts you to explore what's behind the shortfall.

Was there a change in your audience's behavior?

Did your marketing channels underperform?

Or perhaps external factors, like the holiday season, influenced your results.

This comparison provides the context needed to understand if your strategies are working. It also helps you make data-driven adjustments to stay aligned with your goals.

2. Compare Data to the Same Period Last Year (YoY)

Once you've compared your data to your goals, the next step is to compare your performance to last year's period. This provides context and helps you spot trends that may repeat annually.

For example, if your revenue increased by 15% compared to last year during the same period, you can begin to understand if your marketing efforts are making an impact. However, noticing a similar increase across the same timeframe every year could indicate a seasonal trend rather than a significant marketing improvement.

One thing to remember when conducting year-over-year comparisons is broad macro trends and external factors, such as economic changes, industry shifts, or even pandemics, that may have positively or negatively influenced your numbers.

3. Compare Data to the Previous Period

While year-over-year comparisons are helpful, you should also analyze your data against the previous period, such as the last month or quarter. This comparison helps you identify short-term trends and spot any sudden changes in performance.

For example, if you notice a decline in your website traffic compared to the previous month, you might want to investigate further.

Is this decline part of a more significant trend, or is it an isolated incident?

Regularly comparing data over shorter periods allows you to spot issues quickly and adjust your strategy promptly.

4. Look for Outliers in the Data

Did you notice a sudden spike up or down in your data set?

This may or may not be an outlier—a data point that significantly deviates from the rest of the data, potentially indicating an anomaly or error.

Identifying outliers is essential because they can either point to errors in data collection or reveal unique, valuable insights.

For example, a sudden spike in conversions during a specific week could be due to a successful marketing campaign or a reporting error. Understanding the cause of these outliers helps ensure that your data is accurate and you're not making decisions based on misleading information.

5. Dig Deeper and Ask Questions

Being curious and asking the right questions is essential when analyzing your data. If you notice a drop in traffic or conversions, dig deeper to understand what's happening.

For example:

• Which pages are getting less traffic?
• Are specific channels driving fewer conversions?
• Did you change your marketing tactics recently?

Asking these questions helps you uncover the root causes of performance changes and refine your strategies accordingly.

6. Conduct a Cohort Analysis

Cohort analysis divides customers into groups based on shared traits.

Instead of viewing all customers as one group, break them into smaller segments called cohorts. These segments might be based on when they became customers or donors or which campaign or promotion attracted them.

For example, compare customers who signed up in January to those who joined in February. This helps you track patterns and see which marketing efforts work best. If the January group leaves faster, investigate why.

Adjust your strategy based on these findings. By analyzing cohorts, you can target specific audiences more effectively.

7. Trend Analysis

Trend analysis helps you spot patterns over time.

It goes beyond individual data points to reveal long-term trends.

For example, you might notice that your website traffic has increased steadily over six months, or you might see email open rates slowly decline over the last quarter. These trends show what's working and what needs attention.

Trend analysis helps you plan and make proactive adjustments.

8. Identify and Set Benchmarks

Benchmarking compares your performance to industry standards or your internal standards. It shows where you stand.

For example, if your industry's average email open rate is 20% and yours is 15%, you know you need to improve. If your conversion rates are higher than average, keep refining your strategies to maintain and improve your efforts.

Benchmarking helps you set realistic goals, highlight areas for growth, and ensure that your marketing efforts stay competitive.

9. Ratio Analysis

Ratio analysis looks at the relationships between different metrics.

It helps you understand how efficiently your marketing works.

For example, compare cost per acquisition (CPA) to return on investment (ROI). If CPA rises while ROI falls, that can signal you're losing money.

You can also compare marketing-qualified leads (MQLs) to sales-qualified leads (SQLs). If MQLs are high but few convert to SQLs, refine your lead nurturing process.

In short, ratio analysis can reveal inefficiencies. They guide you in making smarter decisions and optimizing your marketing performance.

10. Regular Reporting to Stay on Track

Consistent reporting ensures you and your team stay informed about your marketing performance.

Regularly sharing updates with your peers, managers, and stakeholders keeps everyone aligned and opens the door for fresh perspectives. This is also crucial for in-person or remote team meetings.

For example, creating monthly or quarterly reports that track key metrics like ROI, CPA, and conversion rates will help you monitor progress and make data-driven decisions.

This ongoing evaluation is critical to staying agile and adapting your strategy as needed.

The Takeaway

Unlocking the power of your marketing data isn't just about tracking numbers—it's about understanding what those numbers mean in context.

By setting clear goals and ensuring you have clean data, you can gain deeper insights into your overall marketing performance or specific campaigns and channels. Whether comparing year-over-year results, identifying trends, or spotting outliers, each step helps you make more informed decisions.

Remember, while data can inform your decisions, it shouldn't replace your intuition and creative instincts. Trust your gut and creativity, and use data to inform and enhance your work. When you strike the right balance, your marketing efforts will become more impactful and innovative.

‍