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If you haven’t yet realized the power of data for business decision-making, you’re on a path towards extinction.
This isn’t meant to scare you, but drive home the immense significance of data in modern decision-making.
Data provides essential evidence behind decisions. It enables you to consistently make accurate decisions that keep your business on the right course.
When businesses make bad decisions, it takes them down the wrong path. It wastes time, money and other valuable (and often limited) resources.
Imagine navigating a dense forest with many paths, but only one right route. Every wrong direction you head, you have to double-back and try again.
In this discussion, we’ll look at the benefits of data-driven decision-making and how to ensure that your business and PPC strategies always stay on the right path.
Let’s get started.
The difference between data-driven decisions versus non-data-driven ones is simple.
It’s the difference between saying, “I feel like..” or “I think..” versus, “I know.” Again, if you were lost in a thick forest, you want to definitively know the right path to take, not simply guess.
Before the big data boom, businesses had to primarily base their decisions on assumptions, guesses and gut feelings. There was little or no guarantee that any strategy or decision was correct, which creates a lot of uncertainty.
Here are some data-driven decision-making examples to demonstrate how and why data-driven decision-making is superior to opinion or feeling-driven decisions.
Arguably the most currently relevant example of a data-driven approach to decision-making is how world leaders handle the coronavirus outbreak. The COVID-19 pandemic created unprecedented challenges never faced by the modern world.
Managing this virus requires ongoing management and careful monitoring of the data. While the world is still battling coronavirus, the data-driven approach is monumental in curtailing and, eventually, stopping its spread.
Data allowed world leaders and health officials to make accurate decisions regarding:
By using a comprehensive data-driven approach, policymakers and healthcare providers make the best possible decisions at a time when speed and accuracy meant saving lives.
Data helps on the macro-level of limiting the spread of an out-of-control virus, as well as on a smaller scale to find and perfect a cure.
It’s scary to even think about how many more lives would be lost if we didn’t utilize data.
The initial outbreak of the coronavirus was immense. It was the result of limited data. Healthcare professionals misdiagnosed early COVID-19 cases because they didn’t have the data to separate coronavirus patients from those suffering from common cold or flu symptoms.
Due to lack of data, they assumed that these cases were much more minor illnesses than the deadly and fast-spreading COVID-19 virus.
Once data, information and research entered the equation, it became possible for doctors to distinguish COVID-19 cases from other illnesses.
Let’s take a look at another data-driven decision-making example: buying a new car. This is certainly a more lighthearted case than the coronavirus, but data still plays a crucial role in stopping consumers from making the wrong purchase.
This is the case whenever you make a large purchase with many options, features and other considerations.
The data-driven approach to buying a new car ensures that you drive away with the perfect vehicle at a price you can afford.
For cars, you have to consider everything from price, brand, color, style and mileage to the luxury features, like heated seats or bluetooth capability.
Shopping for a car includes both qualitative and quantitative data. Some characteristics, like price or mileage, require you to compare numerical data. When you start reading consumer reviews, you’re relying more on qualitative data.
Remember, there are hundreds of different vehicle options to choose from. You need to utilize this data and research to know where to shop and which vehicles to test drive.
The non-data-driven approach to buying a car would start with the test drive phase. You wouldn’t have any pre-set criteria or ideas on which brands, styles or models to try out.
You’d probably have to visit several different dealerships and spend hours’ worth of test drives.
Worse yet, you’d be basing your entire decision off of how each model “feels” when you drive. You aren’t considering mileage, add-on features or other critical details.
You may pick a model that has known issues or negative reviews. By not consulting the data of consumer reviews, you’re flying blind.
You may find an option you like, but it’s not going to be the absolute best choice on the market for your needs and preferences.
Before discussing data driven decision making examples in PPC advertising, let’s look at the business-level benefits of leveraging data-born evidence to guide organizational choices.
Many of these benefits will also positively impact your PPC campaigns.
Businesses don’t reach success by maximizing leads, sales, etc. They achieve success by generating these important figures efficiently and consistently.
Efficiently growing your business means achieving these high figures using the fewest amount of resources.
For example, if you make a $100 sale, but it costs you $99 to create that transaction, it’s less valuable than a $5 purchase that only required $0.50 to generate.
Data allows you to make accurate cost-benefit analyses to ensure that all of your sales and leads are coming at the right price.
Once you begin developing the right strategies and processes to create profitable conversions, you need to produce these efforts as often as possible. This is organizational consistency.
If you can’t replicate winning strategies over and over again, your growth will take unplanned downturns.
Data ensures that you continuously detect the right strategies to implement, thereby generating consistent growth with few, if any, dips.
Every business has to think about its customers. It’s impossible to market or sell if you don’t understand the audience.
Understanding your customers is actually a two-step approach. First, you have to identify the best ways to segment your general audience. For many businesses, there are multiple customer profiles that you’re targeting simultaneously.
Once you properly segment your business’ audience, your second objective is to learn the behaviors, preferences and other details of each segment.
Knowing more about your customers means you can deliver high-quality, relevant experiences to each and every customer.
Remember, customers have nearly unlimited options when shopping in the Digital Age. If you want to stand out from your competitors, you need to provide an experience that is personally catered to each customer.
Data allows you to actively mold each buyer persona based on the real-time data. You’ll always have a clear picture of who your customers are.
The benefits of data driven decision making don’t just provide value in the present. Data is a potent tool that also enables businesses to predict what will happen in the future.
When you can detect trends, shifts and other patterns based on past performance compared to the present, you can strategically forecast what’s about to happen.
For example, if you detect a trend in rising costs for a particular lead generation tactic, you can temporarily pause that strategy. Once you investigate the reason behind the increase, or your costs normalize again, you can resume activity.
It’s about making the best decisions for the long term. You don’t want to profit today, just to lose it all, and more, tomorrow. Again, your growth needs to be consistent, not sporadic.
Predictive analytics helps decision-makers choose the best options to navigate the present and prosper in the future.
When you make decisions based on opinions or feelings, instead of data, it’s difficult to be absolutely confident in your choice. There is always some element of uncertainty because you can’t 100% guarantee that your gut is right.
Even if you feel very strongly about the decision, others may not. Another decision-maker may feel very strongly that the opposite course of action is the best route.
Differing opinions are a common source of friction and disruption in organizations, especially if many strong personalities are involved in the process.
At times, it’s impossible for people with opposing opinions to reach a decision. This slows down the decision-making process. Every second you spend arguing about which path to take is time lost.
Data-driven decisions, on the other hand, are based on evidence. As long as your data is accurate and coming from a verified source, you can make decisions with complete certainty.
Data is the great equalizer between opposing sides.
There’s no room for argument or debate because you can’t argue with raw facts and data. Data-driven businesses spend less time clashing over opinions and more time actually making decisions.
Adopting an organization-wide data-driven approach to decision-making is not a change that happens overnight. Businesses should slowly test and implement this approach over time.
Arguably, the best way to begin your transformation into a data-driven company is to start with your Google Ads campaigns.
There are many reasons why PPC advertising is the first stop on a business’ path to data-based decision-making.
PPC advertising produces lots of highly complex data, which is one of the reasons why it is an excellent start for your data-driven decision-making.
The more complex data you have, the more potential evidence there is to back your decision-making.
Without utilizing your PPC data, it’s impossible to make strategic decisions that grow your ad campaigns and help you achieve your marketing goals.
Even if you create a successful campaign without using data, its performance will change over time. Customers will change their search patterns, which affects which keywords or targeting settings are best.
Competitors adjusting their strategies will also impact your campaigns, as well as changes to the Google Ads platform itself.
However, the complexity of PPC data can be a significant obstacle. With your metrics and keyword performance constantly fluctuating, it can slow down your decision-making.
You need sophisticated Google Ads tools to turn your raw PPC data into actionable insight efficiently.
Hidden in your raw PPC data are valuable opportunities and potentially dangerous risks. This is why it is so crucial to transform your data into actionable insights.
In PPC advertising, opportunities occur when emerging trends and other patterns can improve your campaign performance.
For instance, imagine a keyword that unexpectedly explodes in popularity and search volume. If you’re the first marketers to detect this shift, you can capitalize on the increased interest at a meager bid cost.
Risks are even more important to detect. If you allow these issues to persist in your campaigns, they can evolve into even more significant problems and bring down the performance of your entire Google Ads account.
You want to catch risks as early as possible to mitigate the potential harm to your performance.
When you master the data-driven approach, these risks and opportunities help guide your decision-making. You’ll always be looking at the next chance to improve or preserve your PPC performance.
Anomalies are a curious data puzzle. These unexpected outliers are hard to understand and harder to anticipate.
In PPC, there are two types of anomalies: outliers and inverse correlations.
Outliers are more common. These are significant and unexpected spikes or dips in performance. If your weekly total for clicks is 3, but one week it jumps to 11, that’s an example of an outlier anomaly.
Sometimes, these outliers happen out of random chance. Other times, there are underlying causes at play that may not be immediately apparent.
Even harder to detect are inverse correlation anomalies. An inverse correlation occurs when data diverges, instead of moving in the same direction.
Many metrics in PPC advertising share close relationships with one another. When these correlations act polar to what you expect, it is an anomaly.
For example, when your ad clicks increase, the expectation is that conversions will also improve. An inverse correlation anomaly occurs when your clicks increase, but conversions decrease.
It’s backward from what’s expected.
A data-driven business learns how to manage and utilize these anomalies properly. Since anomalies are rare and unexpected, many competitors won’t be able to reach the same insights.
Taking what you’ve learned about your customers on a business level, you can apply this knowledge to offer the best and most relevant ad experiences possible.
Ad relevance is a significant factor in PPC performance. Google uses ad relevance as one of the primary factors in determining Quality Scores.
If you’re new to PPC advertising, Quality Scores are how Google rates your ad experiences. High Q-Scores will grant you top ad ranks and even lower your max bids.
You’re simultaneously saving money and receiving higher ad performance!
With data-driven customer insights and audience segmentation, you can provide hyper-relevant ads to each group. Data shows you the exact products, offers and other details that customers want and expect from your ad messages.
While there are many benefits of data driven decision-making, it’s a challenging road ahead to actually achieve this approach, especially in PPC advertising.
It’s easy to talk about the benefits of data driven decision-making, but to truly master this process, you have to be a wizard with data.
Keep in mind – your PPC data is large, constantly growing and ever-changing. Not to mention, complex correlations, dimensions and other factors make the data incredibly tough to understand and utilize.
Even data science experts struggle to keep up with the demands and complexities of PPC data.
If you want to have a data-driven approach to PPC, you need a tool capable of monitoring and analyzing your data for you.
That tool is PPC Signal.
PPC Signal is one of the best PPC optimization tools on the market. It leverages the power of artificial intelligence and machine learning to detect patterns and anomalies in your PPC data automatically.
No matter how large your Google Ads account grows, PPC Signal monitors the data and provides you with real-time insights on what’s changing and how you can improve your PPC campaigns.
To understand how PPC Signal works, let’s take a look at the tool’s main dashboard.
In this screenshot, the AI system has detected 21 active signals in the Google Ads account. Each signal represents a complete insight regarding a significant change in your PPC performance.
Let’s look at some examples.
Example 1:
In this insight, CPC values increased 1,285.9% over the last few days. You’re suddenly paying a whopping $798.30 for each conversion, when you usually spend around $57.60.
This is a perfect example of why it’s vital to mitigate risks as early as possible. The longer it takes to detect this trend, the more money you’re wasting on overpriced conversions.
PPC Signal brings this money-wasting insight right to your attention. You don’t have to analyze the data manually because the tool has already done it for you.
Example 2:
Not all signals are negative, as was the case in Example 1. PPC Signal also detects opportunities in your Google Ads campaigns. These are trends, shifts and other patterns where fast action will create a positive boost to performance.
In this example, impressions have increased by 480.7% for the “Sports Watch Health Optimizer” ad group on mobile devices.
There could be more people searching for the keywords in this ad group or a competitor has stopped targeting these terms and your impression share has increased dramatically.
In either case, it’s an opportunity for your PPC performance. This insight is letting you know there’s a boom in impressions that you should capitalize on!
Example 3:
Earlier, we discussed anomalies and how important it is to detect these odd occurrences in your data. The PPC Signal insight alert system helps you identify outliers and inverse correlations in your data.
This is a perfect anomaly detection example of an inverse correlation. You can clearly see how the two data lines in the visualization are diverging, instead of following the same path.
You expect that clicks will increase as impressions increase. After all, more people seeing your ad messages means more opportunities to obtain clicks.
In this anomaly, the opposite is happening. Clicks are decreasing, despite a rise in impressions.
These example signals help showcase how efficient the PPC Signal system is at helping you capture the benefits of data driven decision-making.
By automating the detection and analysis of insights, you can allocate all of your time and resources to make decisions, instead of fussing with your data.
A data-driven marketing strategy studies the metrics and information behind each customer interaction to optimize branding, products, messaging and much more. The data-driven marketing strategy relies on past and current performance to adjust strategy and improve performance in the future. This marketing approach is crucial for personalized experiences and maximizing your ROI.
Marketing strategies produce heaps of data. Every interaction or non-interaction creates useful information that you can use to improve your performance moving forward. Marketing analytics helps you make sense of this big data and turn raw numbers and figures into actionable clues on optimizing your campaigns and strategies.
It’s important to monitor marketing activities because many factors influence these strategies. Customers change their behaviors and feelings; competitors switch up their strategies to counter yours; marketing platforms change policies or update to add new features; industry standards change. The list goes on. If you don’t monitor your marketing activities, you won’t know if strategies are improving or faltering.
The benefits of data driven decision making are far-reaching and incredibly impactful.
Our entire world is becoming more and more data-centric. We want evidence, facts and insights to drive our decision-making, not loose assumptions, gut feelings and other not-so-accurate attitudes.
To truly become a data-driven organization, you need to become exceptionally familiar with your data and analytics.
If you don’t have the tools in place to capitalize on the mountains of data available, you’re essentially ignoring one of your company’s most valuable resources.
When it comes to PPC advertising, PPC Signal is the best data-driven optimization tool out there. With advanced AI technology, the system automatically transforms your data into actionable insights on how to improve your campaigns and remove any potential performance issues.
These insights directly translate to data-driven decision-making examples.
It’s like having a GPS system for your Google Ads account that helps you find the best path with the least resistance. Even as the landscape changes, PPC Signal finds the best route.
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