Why You Should Use Predictive Analytics In Marketing

Why You Should Use Predictive Analytics In Marketing

Marketers and business owners generally use historic analytics and data to inform future decisions on where they should spend their money to get the best return on their investment. This is great because it gives you some idea of what has worked in the past and at what time, therefore giving you a higher probability that if you emulate the same strategy in the future you will have success when compared against a strategy that previously failed. 

Obviously when doing this, you need to consider all of the variables including season, competitors and economic environment. Success still largely relies on execution, outside variables, and even luck to some degree. The use of predictive analytics mitigates a large portion of this risk due to being able to calculate the success of your campaign using data, machine learning and AI. 

What is predictive analytics in marketing?

Predictive analytics in marketing is the use of data, AI and other tools to predict the outcome of a marketing campaign or marketing efforts over a given time period. Usually this is in the digital world as it is easier and more accurate to attribute what mix of tactics and tools is working and creating the highest return on investment for a business.

Predictive analytics can be used in the strategy stage of ideation and then integrated throughout campaigns to firstly predict, and then monitor the success of a campaign while also providing meaningful insights as to what changes you should make throughout so that you get the best result. 

How does predictive analytics help marketers and business owners?

The most common goal of a business is to grow, which mostly means growing revenue and net-profit. To grow at a rate that isn’t dormant you need to have strategies around this which more likely than not include marketing.

The problem when creating growth strategies and campaigns is you need to know and find out what investment will give you the highest return and grow your business. Now, some strategies will work and go viral and have ROI’s of 10X, but others will go bust and you’ll lose money, therefore not growing your business and putting you on the back foot.

For large scale enterprises this isn’t as bad because they have huge overdraft facilities that can mitigate the downturn in cash flow, but for small to medium businesses it's inhibiting as these types of businesses rely on having strong cash flow management. Predictive Analytics gives a company of any size a higher certainty that the money they put into a marketing campaign is going to return them net-profit.

If a marketing manager knows that the $50,000 they are going to spend on a campaign has an 80% probability of returning 10X ROI, 90% probability of returning 6X ROI and a 95% probability of returning 4.5X ROI, it gives them greater certainty that they are are going to have a positive result at the conclusion of the campaign and grow the business. There is no need for marketing managers and business owners to fly blind and rely purely on intuition when speaking to customers and consumers in this day and age.


With the rise of data and AI, marketers now have the ability to predict the outcome of marketing campaigns which in-turn should create greater success and profits in business. Being data and AI savvy should decrease waste in marketing spend while also allowing your company to accumulate specific IP that can be used to continually create profit. Predictive Analytics allows you to foresee potential pitfalls, obstacles and back your creative intuition with hard data to help solidify success in marketing. 

by Frankly

More articles like this

Get Frankly updates | Careers | Privacy notice

© 2024 Frankly Analytics. All rights reserved.