White Paper

The CFO in the Age of Digital AnalyticsThe Changing Roles in a Changing World

AbstractI have been drinking from a virtual fire hose since joining my most recent technology company, Anametrix, a cloud-based

digital analytics innovator. A whole new book opened for me on how digital analytics can both increase top line revenue and

reduce spend by shining a very bright flashlight into marketing efforts.

We are all painfully aware of the data explosion problem. In 2011, the Gartner Group stated that information volume collected

by businesses today is growing at a minimum 59% annually. The rapid adoption of social media has also caused customer

data to explode in the last few years, creating entirely new challenges for marketers. It is now imperative for organizations to

think differently to accommodate the variety, volume, and velocity of their growing customer-related data.

This is where my recent experiences come in: I have personally seen how digital analytics can harness the power of massive

amounts customer-related data. It can literally simplify the accelerating complexity by providing deep visibility – as well as

clarity – into the effectiveness of various marketing efforts, across both online and offline channels.

I will now outline the role of IT and CFO in adopting cloud-based digital analytics solutions, discuss the benefits as well as

challenges of moving to this emerging category, and provide some illustrative examples on how digital analytics can transform

your marketing organization.

TRANSFORMING DATA INTO INTELLIGENCE

One of my CFO mentors said to me “Jeff, information isn’t knowledge”. I later learned this was an Albert Einstein quote, but

his advice is very relevant to the need for rapidly extracting actionable intelligence out of the accelerating data flood. Digital

analytics tools can collect information, correlate trends, and predict results from the exploding number of data sources.

Digital analytics can help us find out the how, what and why behind customer actions.

First, let me back up and give you some background on analytics in general. Analytics tools can be divided up into five areas:

1. Financial – analytics typically controlled by your ERP (budget tools, reporting, financial KPI dashboards)

2. Operational – analytics support supply chain or order management and help streamline the entire cycle from sales

quotation, manufacturing, shipping, billing, and collection

3. Strategic – higher level analytics around organizational goals or new offerings

4. Employee – HR can run the gamut of time tracking, benefits, performance, etc.

5. Customer – this is a very broad, important category – early winners include CRM players (eg., Salesforce), web an-

alytics (e.g., WebSideStory, which was also founded by the Anametrix CEO) and marketing-oriented technologies for

improving results of marketing campaigns , cross-channel marketing effectiveness, etc.; basically everything involved

in reaching and engaging prospects and converting them into customers.

WHY CFOS AND IT ORGANIZATIONS SHOULD SUPPORT DIGITAL ANALYTICS

CFOs have typically managed the IT investments for an organization. But these days, when the beneficiary of the IT

investment sits inside the marketing or sales organization, they may be authorizing investments in cloud-based technologies

themselves. IT must adapt to this new environment by staying on top of new technologies and acting as a champion of all

new programs, rather than risk staying out of the loop. CFOs should encourage IT to leave some databases and tools in

the cloud, when it makes sense, after carefully considering and comparing the required investment for implementation and

ongoing maintenance of an on-premise option.

For example, a typical online retailer has to manage the ERP (e.g. Intacct), the CRM (e.g. Salesforce), the web site chat

service (e.g. LivePerson), the email service provider (e.g. ExactTarget), as well as social media monitoring solution (e.g.

Radian6). These tools are owned by various departments, and don’t easily integrate with each other. The need to integrate

the various cloud-based data silos has been steadily increasing because CFOs and IT groups want to help their users get

the most out of these investments. The use of cloud-based digital analytics gives marketers easy access to this cross-

channel data anytime anywhere, and pushes the work of maintaining high availability, redundancy and security up to the

cloud vendor instead of IT.

The migration away from on-premise solutions has been in part driven by the wave of new cloud-born data. For example,

Facebook, Twitter and other social media channels have driven an entire industry to monitoring and analyzing customer

behavior in the new social web. Keeping cloud-originated data outside of the IT firewall is a good way to maintain security

and a way for the IT team to allow internal staff to hook up to cloud sources like Facebook, Google, etc. A sufficiently well-

structured cloud vendor can actually increase an organization’s security.

WHY EVERY BUSINESS NEEDS CLOUD-BASED DIGITAL ANALYTICS

Consider this all too typical business situation:

6. Data from ERP can only be viewed with traditional BI tools and data warehousing tools in traditional row and column

fashion.

7. Data from cloud vendors, can be compiled either by the vendor or manually, and

8. Data from web traffic is monitored in a summarized fashion, highlighting important trends, using perhaps web analytics

or manual mining or free tools like Google Analytics, but doesn’t connect to anything else.

Putting all this information together with other on-premise data can be challenging, requiring new tools to help collect, cor-

relate and present the information. A digital analytics platform can help bring these otherwise disparate silos together. It can

access all these sources of data, in real time, to extract the relevant trends and offer predictive analysis.

Businesses can enjoy a new level of freedom to experiment because the cloud can put data at their fingertips. Users can

analyze results of different campaigns, channels, pricing, prior to doing a larger roll out, before investing more dollars, and

changing their investment strategy as the data is viewed as quickly as it is created – in real-time.

My old mentor would tell me, “I want only passionate, imaginative, curious people around me”, and I submit that access to

data with these tools gives us the chance to dream about what we want to see, in the way we want to see it and exercise our

curiosity. Let the business users and the analysts analyze! Their time is too valuable to be consumed by the compilation of

manual spreadsheets.

THE CHALLENGES OF DIGITAL ANALYTICS

There are of course some challenges and bumps in the roads to consider. Sometimes the data from the customers is too

granular; it takes some work for organizations to apply the appropriate cleansing and summarization to cloud vendors’ data,

databases, and other sources. Regardless, the pace of implementation is amazingly rapid. When I used to ask for a business

intelligence-based report from my IT folks, it would sometimes take them months. Now, we are successfully moving forward

with the aggregation of a variety of data-silos as quickly as the information is provided, with many sources appearing in re-

al-time. APIs and data integration tools are becoming ubiquitous and enable rapid implementations.

Tools also need to be limited to avoid pulling in too much data. For example, the Anametrix CTO realized that omitting irrele-

vant details or unneeded information provides users greater focus. Also, when data is replicated, the original sources are left

undisturbed; thus, if a user wants to include a specific detail from the source data later, it can be brought in. Pre-processing

helps make data analysis available in real time to determine why, how, and what data is useful to the client.

HOW DIGITAL ANALYTICS CAN DELIVER AN INSTANT ROI AND INCREASE SALES

Let me exemplify the benefits of digital analytics through the experiences of an Anametrix customer. This particular company

wanted to examine the effectiveness of its world class-service desk/CRM, while also measuring its marketing effectiveness

through social media and website activity. The automation of the manual Excel-based reporting process alone was a

massive time saver and resulted in immediately actionable information. By correlating data across various sources, they were

able to answer key questions quickly and accurately, with significant impact on their sales and marketing ROI:

• Segmentation: which campaigns drive revenues, segmented by product category, importance of customer, lifetime

value (LTV) of customer, and customer acquisition source?

• Churn: what is the change in purchase behavior of the VIP customers (highest revenue-generating buyers)?

• Website Behavior: which campaigns are driving website traffic? What are the primary traffic sources? What is the

behavior of visitors from different sources? Is the website driving engagement and conversion?

• Website chat: What are the prospect behavior trends based on web site chat with customer service representatives?

What is the quality of service? How do customer satisfaction scores correlate to purchase behavior?

• Email campaigns: Which email campaigns are bringing in prospects with higher conversion to purchase rates vs. just

high click-through rates?

• Call center/CRM: What are the primary issues driving the call center/CRM activity? How do they correlate with live

chat disposition?

• Social: What level of social engagement is occurring? Which sites are driving the social mentions? What are the key

topics? Who are the most influential authors?

Here are additional ways Anametrix customers are taking advantage of digital analytics:

• Multi-dimensional Analysis: Data can now be examined across any useful, relevant dimension. Segmentation and

correlation by business unit, product, geography, time dimension, with visual trend lines instantly available, frees up

analysts and business owners from data collection, and enables them to focus on analysis –saving costs and improv-

ing ROI on marketing spend.

• Customer traffic: can now be aggregated by the logical business unit, by the product, for a given region. For exam-

ple, standard marketing areas defined by Nielson, (known as Direct Marketing areas or DMAs) can now be monitored

for traffic and behavior, then correlated to marketing spend.

• Automated reporting: Standardized and customized reports can now be automated and sent out to business unit

owners and analysts daily, who can use them to examine traffic, determine how they compare with other geographies,

and evaluate campaign performance across relevant key performance indicators (KPIs).

I hope you will find this information valuable as you journey into the rapidly evolving world of digital analytics. To end with a

final Albert Einstein reference, “Imagination is everything. It is the preview of life’s coming attractions. Imagination is more

important than knowledge”. Good analytics tools should allow you to use your imagination to explore the “what, where,

and why” of “how” your prospects are finding out about you and buy your products and services – and ultimately help you

improve your reach, engagement, conversion and retention efforts. Use your imagination, powered by analytics, and good

selling!

ABOUT ANAMETRIXAnametrix transforms businesses with marketing analytics. We collect, analyze and make sense out of data across all marketing channels in real time to enable marketers to discover new truths about customers, prospects and the market at large. Anametrix delivers 360-degree visibility into business data to uncover new trends and hidden correlations, explore new relationships and deliver a bigger and more predictable impact on revenue. Founded in 2010 by the trailblazing web analytics team behind WebSideStory, Anametrix has headquarters in San Diego, Calif.

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