Imagine if we used a one-size-fits-all macro approach to buying groceries. For some, it would work out perfectly – restaurant owners could stock their kitchens with wholesale goods and bakeries could purchase eggs in the thousands. But what would a small family do if they were forced to buy large quantities of food, without being able to adjust or supplement as needed?
Just as people need food to survive, businesses use data and analytics to stay afloat. Data helps companies determine their target market, increase exposure, and make sales. However, many businesses go about collecting their information in the wrong way. When a company focuses exclusively on big data, they can miss key indicators in the process of trying to obtain the data and travel down the wrong path for too long – a deadly mistake for emerging businesses.
What is Macro Data? Also known as ‘big data’, macro data refers to a summary of a large sample size of data. This includes the analysis of the greater group, rather than extrapolating the results from certain individuals.
If your goal is to conduct research to find a market, the typical marketing agency will encourage you to spend big and collect as many data points as possible. The best possible outcome? Your business can become one of the rare success stories of going viral on Facebook or YouTube! If the stars align, you may also benefit from a boost in the powerful combination of strong sales and a high return on ad spend (also known as ‘ROAS’). However, the most likely outcome? For emerging businesses, expensive Google and Facebook campaigns benefit commissioned ad agencies more than they do your company (as well as the websites that host your campaigns, of course). This approach often leaves businesses strapped for cash at the time where they need it the most.
That’s why at Group 8A, we balance large scale market research with ‘micro data’, to ensure our partners receive a holistic approach to their digital efforts. Here are a few reasons why you should incorporate micro data into your research and analytics strategy:
Businesses that utilize micro data are able to move more quickly during growth than those who do not. This means they often have a higher ROI for their marketing dollars, and also end up spending less! For example, if we spent $100 to make $300, that is solid news. But micro data dives deeper. We often observe that the $100 did not all earn a 33% return. Perhaps $25 of spending resulted in $200 of revenue, where the other $75 resulted in only $100. With that information, a business can allocate additional funds to segments that generate the greatest revenue, creating a more profitable and efficient campaign early on.
It Scales with You
The point of digital marketing is to help your business grow. So why would you use tactics that can’t grow with you? Utilizing micro data is one small step in the process of testing, analyzing, modifying, and repeating to continuously find the best path. And with the ability to quickly reallocate funds based on success, you can put serious power behind your best performing segments no matter the size of your business. A good process will essentially build its own budget for testing, which scales over time and allows for more top-of-funnel growth opportunities with each efficiency improvement and reallocation you discover.
Macro data depends on one thing – a LOT of information points. This means big campaigns, wide nets, and a lot of dollars to power it all. In micro data, each click, customer, or transaction is important, so you can start small and still be successful. Incorporating micro data into your analytics can be especially helpful for new companies or small business owners who rely on a small marketing budget to do great things. But it doesn’t stop short there. The compound effect means even big companies can jump from a couple million dollars to tens or hundreds of millions by reinvesting through micro data.
When you wait for large amounts of data before drawing conclusions, you can increase the accuracy of your information. However, the lead time it takes to culminate that information often outweighs the benefit of always having access to the latest and greatest research! When you utilize micro data, you have quick turnaround time and begin applying new information instantly. That means you always have the most accurate customer profiles, the most accurate understanding of trends, and the best chance of earning new business.
It’s Less Risky
Marketing is often the second biggest expense a business incurs. Why? Because it is important! But when another part of the business gets in the way of marketing efforts (like a broken ‘checkout’ button or a price that’s way too high), those dollars go straight down the drain. Imagine spending $50,000 creating the perfect campaign with your marketing agency, that showcases your show-stopping new product. Your customers love it, yet through some website bug…can’t purchase. Now you’ve spent the $50,000, created hundreds of frustrated customers, and missed a great opportunity to launch a new product. With slower, more measured advertising combined with constant testing and market research, your business maximizes the chance of finding out about issues before large sums of money go out the door.
Choosing a Partner
If you want to work with marketing experts, hiring an agency can be a great option. There are a couple different ways agencies determine their fees: many agencies work off a commission from the money you spend, so they favor large marketing budgets. Some charge a flat fee regardless of ad costs (and regardless of outcomes), and can be less accountable or less responsive as a result. Alternatively, a properly incentivized agency will make money only when your business grows as a direct result of our efforts. That means you can be confident everyone around you is fully committed to the success of your campaigns, the efficiency of your spending, and ultimately, the growth of your business.
You also want to find an agency like Group 8A that has a balanced approach to analytics. While micro data can provide a method for quick responses and affordable testing, an inexperienced analyst may be too quick to draw conclusions from small numbers. The right partner will not be tempted to overreact from too small of a pool, and will make sure you follow opportunities to their full potential.
Our business backgrounds and hyper-consciousness means we understand the numbers behind buzzwords like ‘impressions’ and ‘brand building’. We’re able to focus on the real stuff, like marketing percentage, revenue growth, or ROAS.
If you would like to discover how micro data can work for your business, contact me directly at firstname.lastname@example.org today!