Product Analytics vs Marketing Analytics: Key Differences Explained

As marketers, we are often exposed to various terminologies aligned with data and analytics. Two common terms that we come across are Product Analytics and Marketing Analytics. While these terms are sometimes used interchangeably, they have distinct differences. Understanding these differences is significant as it helps marketers make more informed decisions. This post will explore the difference between product and marketing analytics.

The Scope of Analytics

What is product analytics?

Product analytics is typically aimed at understanding the behavioral patterns of an app, website, or any digital product. It helps in designing better user experiences improving retention and conversion rates.

Common business questions product analytics tries to answer:

• How do customers use our product?
• Are users able to complete their tasks easily?
• What are the most popular sections/features of a website or app?
• How many who signed up for a free trial have converted to paying customers?
• What is the average time from a lead turns into a paying customer?

What is marketing analytics?

On the other hand, marketing analytics is focused on understanding customer behavior and activities related to a business’s marketing campaigns. It helps make data-driven decisions for effective promotion and outreach.

Common business questions marketing analytics tries to answer:

• How many people are seeing our ads?
• Are they clicking on the ads?
• What type of customers are most interested in our products and services?
• How can we increase brand awareness?
• How is the website converting visitors to customers?
• What is the most popular landing page that generates the most organic traffic?

Objectives of Campaigns

The key difference between product analytics and marketing analytics lies in their objectives. Product analytics aim to provide data that helps product teams identify areas to optimize their products, such as user flow, feature engagement, and conversion rates.

Marketing analytics, conversely, centers around a marketing campaign's objectives, like generating leads, increasing sales, and generating brand impressions.

Data Sources and Analysis Tools

Product analytics uses user data from a product or service, such as website traffic, usage statistics, customer feedback, etc. It can be analyzed using heatmaps, A/B testing, and customer surveys.

Marketing analytics relies on data extracted from marketing campaigns on platforms like Google Ads or social media analytics. This data can be analyzed using attribution models, click-through rates, and return on ad spend (ROAS). Google Analytics is a popular web analytics tool marketers use to measure user behavior and digital marketing campaign performance.

KPIs and Metrics

When we talk about metrics, the scope of discussion again differs between product and marketing analytics. Measuring the success of a product typically involves metrics like churn rate, conversion rate, retention rate, and user engagement.

Example KPIs used in product analytics are –

Acquisition: Number of new signups, CAC (customer acquisition cost)

Activation: Activation rate, Time to active, Free-to-paid conversions

Engagement: DAU, WAU, MAU, Feature usage

Retention: Retention rate, Churn rate, CLTV, Net revenue

Monetization: MRR, ARPU

Example KPIs used in marketing analytics

On the contrary, marketing analytics focuses on metrics that help evaluate the results of different marketing strategies and tactics. These metrics might include website traffic, lead generation, customer acquisition costs, and return on investment (ROI).

Self-service vs. Managed Analytics

Product analytics is typically a self-service function, meaning developers and product owners have direct access to the data that helps inform the product development efforts. In contrast, Marketing analytics often requires a centralized data set to manage, oversee, and evaluate results and then distribute that information to the appropriate teams.

Example product analytics tools:

• Pendo
• Amplitude
• Mixpanel
• Heap
• Glassbox

Example marketing analytics tools:

• Google Analytics
• Adobe Analytics
• Piwik
• Matomo

Product and marketing analytics require different skills, resources, and strategies. Understanding how these two types of analytics differ and complement each other helps companies and brand marketers make accurate and data-driven decisions.

With both types of analyses working together, businesses can create better products that drive growth with effective marketing campaigns. Whether a team is measuring product usage or tracking campaign performance, knowing the distinction between product and marketing analytics is critical when making informed decisions.