Spending on data and marketing analytics infrastructure may outstrip inflation, but nonprofits are likely to continue their “little sibling” status among all organizations when it comes to adapting new technologies and strategies. Data and analytics expenditures are seen as having compounded annual growth rate of 10% during the near term, increasing the amount spent from $22 billion during 2022 to $32 billion within the United States, United Kingdom and European Union, according to From Data to Insight: The Outlook for Marketing Analytics, a report from advertising and marketing consultancy Winterberry Group.
“Technological advancements and process improvements have enabled businesses to achieve more with less reliance on people, empowering business analysts and engineers to leverage readily available technology, while reducing reliance on individuals with advanced degrees and offshore talent,” the Winterberry report authors wrote.
Industry wisdom holds that nonprofits are slower to adapt and make full use of technologies. “Nonprofits and higher educational institutions have traditionally lagged their commercial counterparts and been slower to invest in technology,” researchers at Chicago-based adviser Grant Thornton wrote in a 2022 report, adding that pandemic-related activity pauses had allowed some nonprofits to evaluate their technology use and needs.
The Winterberry Group report doesn’t provide sector breakouts. But it does segment its survey-based findings by marketing analytics technology adaptation rates. Respondents are broken out into five categories. In descending order of technology embracement, they are:
- “Leaders” (those who combine analytics with current AI and machine learning reporting which informs and automates analytical decisions)
- “Established” (those using descriptive, predictive and prescriptive analytics for forecasting and action course guidance)
- “Progressing” (organizations that use both descriptive analytics and prescriptive analytics across a variety of use cases, with highly adequate strategy in some areas and deficiencies in others)
- “Emerging” (those who rely on descriptive or diagnostic analytics to identify causes and trends)
- “Laggards” (those leveraging basic analytics to gain insights on past behavior).
Overall, 10% of respondents fell into the Leaders category, followed by Established (38%), Progressing (37%), Emerging (10%) and Laggards (5%). If the wisdom offered by Grant Thornton and other sources holds, many nonprofits (there are exceptions, especially among the largest organizations) likely fall into Winterberry Group’s lower-adaptation segments. As the Winterberry authors note, “The vast majority of organizations (75%) have made progress in evolving their application of marketing analytics but have a substantial way to go to garner the true power of marketing analytics.”
Regardless of the level of adaptation, respondents overwhelmingly indicated their use of marketing analytics for audience targeting and segmenting had boosted their performance and efficiency, with 78% saying doing so had boosted these efforts “significantly” while another 20% indicated performance and efficiency had not changed noticeably. Two percent said these efforts had “significantly regressed.”
Respondents were almost as enthusiastic when asked whether using analytics had improved the performance and efficiency of their creative assets. Nearly three-quarters (74%) indicated so, compared with 21% who did not report a noticeable change, 4% who said their performance and efficiency had significantly regressed and 2% who were not aware of any changes.
Organizations within the five categories of marketing analytics adaptation reported different levels of skill availability and internal coordination. For instance, 60% of respondents within the Leaders indicated they coordinated appropriate skills across their entire organization, while the remaining Leaders said they had a strong base of skills across their organization and were working to better coordinate their activities.
In comparison, only 30% of the Laggards said they had the necessary skills and were actively coordinating them across their organization, the same number that who reported having a strong base of skills and were working on attaining enterprise-wide coordination, or who said they had some of the skills distributed across the organization but that these skills were not well integrated. Among the Laggards, 10% indicated they did not have the necessary skills within their organizations and had no plans to remediate the situation. That level was, unsurprisingly, the highest among all adaptation levels.
A similar schism exists between the most- and least-marketing-analytics-embracing organizations when it comes to data quality practices. Seven in ten of the Leaders indicate their processes are well defined and implemented across the organization. A mere 20% have limited processes in place to ensure data quality, and only 10% have informal, underused processes. In contrast, none of the Laggards have well-defined, enterprise-wide processes. Their data quality practice sophistication was evenly split between those indicating they have informal processes in place which were not widely used and those that have limited processes for ensuring data quality.
Even if the nonprofit sector lags, the good news overall is that organizational data practices are moving from siloed approaches to enterprise-wide philosophies. Overall, 59% of organization surveyed have enterprise-wide data infrastructure, although results are mixed regarding whether individual business units are leveraging the integrated data structure. Another 30% indicated individual business units manage their own data, while 11% reported important data is stored in disparate systems.
Among the report’s other findings:
- Just under three in ten (29%) of U.S.-based organizations rely on third-party analytics providers, while nearly half (47%) use third-party analytics providers only when they have clear needs gaps.
- Similarly, 29% of respondents from U.S. organizations cited a lack of willingness to rely on data-driven decisions as a primary marketing analytics challenge, while 27% mentioned a lack of centralized data an analytics function as holding them back. Just under one quarter (24%) mentioned resource or talent limitations, 17% mentioned a lack of marketing analytics technology and 4% felt their organization had an overreliance on third-party analytics support providers.
- Respondents in Europe seem to line up somewhat further along the adaptation curve, Given the stricter data restrictions within Europe, organizations there have been forced to speed up their use of analytic insights – in short, to do more with less. Advances might include analytics on data that has had personally identifiable information stripped away, but which offer insights that can then be applied with greater targeting to prospects that have similar purchase or donation propensities to those of the analyzed group.
This comprehensive report provides current salary information on 232 nonprofit positions from entry level to the executive office, and complete data on 94 employee benefit offerings including healthcare, retirement, executive perks, vacation, and much more.* Includes detailed salary and benefits trend data for 2023.
