What is Digital Analytics? A Simple Guide

In this post, we’re going to dive into the world of digital analytics. 

The practice of digital analytics has been around since the early days of the internet. In the mid-1990s during the rise of the internet, webmasters would track metrics like page views, hits, and visits through log file analyzers. Those were the simple days. 

Skip forward thirty years, the digital analytics landscape has sprawled into an ever growing ecosystem of tools and technologies. Business needs have changed. Privacy concerns have mounted. New megatrends have arisen. 

So, we figured that now is the best time to take stock on what the digital analytics landscape looks like today and how we see it evolving in the near future, taking insights from our latest report - The Digital Analytics Technology Landscape: Evolving Infrastructure and Tools for Data Leaders

What is Digital Analytics? 

Most businesses today have a digital estate. From mobile apps to websites, this digital estate creates data or what we like to call ‘behavioral data’.

This data shows how users interact within your digital space. It includes the pages they visit, the actions they take, like clicks or purchases, and how long they stay on an app or site. 

The practice of digital analytics describes the process of collecting, measuring, analyzing, and interpreting this behavioral data. The data can be either quantitative or qualitative. It gives companies important information to help them understand user behavior and improve the customer experience. 

So, how has digital analytics evolved? Well, it’s changed quite a bit since the early days of the internet. But most of the change has occurred over the last decade. 

If we rewind back to 2010, packaged third-party tools like Google Analytics were considered the gold standard for digital analytics. Since then, we’ve seen the proliferation of cloud technologies, real-time processing capabilities, and advanced analytics. All of which have opened up new possibilities into how businesses can derive insights and improve decisions. 

Key aspects of modern digital analytics include:

1. Comprehensive data collection across multiple digital touchpoints
2. Real-time data processing and analysis
3. Advanced analytics incorporating AI and machine learning
4. Integration with cloud data platforms
5. Strong focus on data governance and security

How have these advancements opened up new possibilities? Well, they’ve made it possible for businesses to process and analyze data within their cloud data warehouses or lakehouses. And this is key because it provides companies with greater control, flexibility, and deeper insight into customer behavior and digital interactions. 

Why is Digital Analytics Important?

Digital analytics is critical for any business looking to thrive in an ever-increasing digital economy. Here's why digital analytics has become indispensable:

1. Customer-Centric Approach: To compete today, organizations must create more personalized and engaging customer experiences online. But to achieve this, you need rich insights into the behavior of your customers. Where do you get these insights from? Your digital analytics tool. 
2. Data-Driven Decision Making: McKinsey research suggests that organizations that leverage customer behavioral insights outperform peers by 85 percent in sales growth and more than 25 percent in gross margin. These organizations use digital analytics to make smart decisions. They rely on real user data instead of guesses. 
3. Optimizing Digital Products and Services: Customer-facing digital products and services are on the rise across industries. To improve the performance of these products and services, you can use digital analytics to understand user interactions, identify pain points, and optimize the experience. 
4. Real-Time Insights: Modern digital analytics solutions are allowing businesses to process behavioral data in real time. As a result, it’s now possible to respond to changing customer needs and market trends at pace. 
5. Competitive Advantage: Modern digital analytics solutions also provide access to AI-ready, first-party and zero-party data. This data unlocks competitive advantages, allowing businesses to stay ahead in their respective markets.
6. Improved Marketing Strategies: Marketing teams are increasingly relying on digital analytics tools to gather insights into campaign performance, customer acquisition costs, and lifetime value.
7. Enhanced Data Governance: When managing customer data, data governance is paramount. Modern digital analytics tools now incorporate robust data governance features, helping you to remain compliant with regulations while still extracting valuable insights. 

How Digital Analytics Has Evolved

The digital analytics landscape has evolved dramatically over the last decade. It’s critical that you keep abreast of these changes to ensure you have the best digital analytics setup for your business. Below are some of the high-level changes that we cover in more detail in our report:  

1. From Web to Omnichannel: In 2012, the rise of smartphones, tablets, and mobile apps marked a shift in analytics needs. Companies realized they needed to gather detailed behavioral data not just from websites, but from all types of devices and customer interactions.
2. Cloud Integration: The integration of cloud data platforms has become essential, allowing for more scalable and flexible analytics solutions to orient around a central source of truth.
3. Real-Time Processing: Modern digital analytics now offers real-time processing of behavioral data, enabling quicker insights and faster decision-making.
4. Advanced Analytics and AI/ML: The incorporation of advanced analytics, artificial intelligence, and machine learning has become a strategic imperative, allowing for more sophisticated data analysis and predictive insights.
5. Data Governance Priority: With increasing concerns about data privacy, data governance and security have become top priorities in digital analytics implementations.
6. Composable Approach: There's a shift towards a composable approach to digital analytics. A composable approach involves assembling best-of-breed technologies that integrate to create a tailored analytics stack. These technologies typically leverage cloud data warehouses or lakehouses as a central repository for all customer data.
7. First-Party Data Focus: Access to AI-ready, first-party and zero-party data has become crucial, providing businesses with unique insights that can't be replicated by competitors. This is vital for any organization looking to create a sustainable competitive advantage. 

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So as you can see, gone are the days of digital analytics tools acting as simple tracking tools. They’re now comprehensive systems for helping you understand and optimize entire customer journeys across all your digital touchpoints. If you’re still using digital analytics for basic tracking, now is the time to assess and modernize your approach. Our report provides in-depth insights and strategies to help you navigate this evolving landscape. 

Mastering Digital Analytics: Your Next Steps

So the key message here is that digital analytics is no longer just about basic web tracking. Modern digital analytics is sophisticated. It provides a multi-faceted, omnichannel approach for understanding and optimizing customer interactions across all digital touchpoints. And the space will continue to evolve at pace as we see further advancements in cloud technologies, real-time processing, and AI/ML capabilities. 

Does your digital analytics setup provide you with data ownership? Does it give you real-time insights? Does it have advanced AI/ML capabilities and robust data governance?

For your organization to compete, you need to be answering ‘yes’ to all these questions. If not, our report is a great place to start modernizing your digital analytics. 

Transform Your Analytics Strategy: Get The Complete Report

Unfortunately, many companies still use traditional, packaged analytics tools and are limiting their analytics workflows. As a result, they're missing out on the latest infrastructure and tools to take their digital analytics to the next frontier. 

Download our comprehensive report, The Digital Analytics Technology Landscape: Evolving Infrastructure and Tools for Data Leaders, for an in-depth exploration of:

• The latest trends shaping the digital analytics landscape
• Detailed comparisons of packaged vs. composable digital analytics solutions
• Strategies for implementing a modern, cloud-based analytics infrastructure
• Best practices for leveraging AI and machine learning in your analytics processes
• Tips for navigating data privacy regulations while maximizing insights

Let’s get ahead of the digital analytics revolution and realize the full potential of your behavioral data. And let’s make your business thrive. Click the link below to get your copy of the report and start your journey towards mastering the new era of digital analytics.

[Download the Full Report Now]

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