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What does an analytics agency do?

Answering a question we get asked quite often...
 

 

Analytics agencies are certainly not as commonplace as advertising agencies, and perhaps that is a function of the more specialized and technical work that they do. The Tagmetrix team spent a bit of time trying to put together a comprehensive guide on what it means to be an analytics agency, and the answer we've come up with is slightly skewed towards digital analytics (our area of expertise). In short, we believe an analytics agency plays a pivotal role in helping businesses make data-driven decisions. Whether a small startup or a large enterprise, businesses rely on data to understand customer behavior, optimize marketing efforts, and improve overall performance.

 

In this article, we'll break down the technical aspects of what an analytics agency does, focusing on the key services and tools used.

 

1. Data Collection and Integration

 

The foundation of any analytics work starts with data collection. An analytics agency implements various tools and technologies to gather data from different touchpoints. These can include websites, mobile apps, marketing campaigns, and offline interactions.

 

Some of the most common tools and techniques include...

 

• Google Tag Manager (GTM): GTM is essential for managing tags (pieces of code) on websites without modifying the source code. An analytics agency configures GTM to track user interactions such as clicks, form submissions, and page views.

• Google Analytics (GA4): GA4 provides comprehensive insights into user behavior on a website or app. Agencies configure it to track detailed events and parameters that align with the client’s business goals.

• Customer Data Platforms (CDPs): Tools like Segment and Tealium aggregate data from various sources to create unified customer profiles. Agencies use CDPs to centralize data, making it easier to analyze and activate across marketing channels.

• Data Layer Implementation: To ensure smooth data flow from front-end systems (web or app) to analytics platforms, agencies set up a data layer. The data layer holds key variables (such as transaction details, product IDs, user information) and feeds them into tools like Google Analytics through GTM. Proper data layer architecture is crucial for capturing complex user actions, like multi-step form submissions or e-commerce tracking.

 

2. Data Analysis and Reporting

 

Once the data is collected, an analytics agency focuses on transforming raw data into actionable insights. This involves a mix of technical skills and analytical expertise.

 

Data Warehousing

• BigQuery: Agencies often utilize Google BigQuery, a cloud data warehouse that enables storage and querying of large datasets using SQL. This is particularly useful when a client has vast amounts of data that need to be processed quickly and efficiently.

• SQL (Structured Query Language): SQL is employed to perform complex queries on data stored in databases. Agencies use SQL to extract, transform, and load (ETL) data from multiple sources into clean and usable formats.

 

Dashboards and Visualization

A significant aspect of the agency's role is creating dashboards that display real-time performance metrics and KPIs. Visualization tools like:

 

• Google Data Studio: This tool integrates seamlessly with Google Analytics and BigQuery, enabling agencies to create custom dashboards and reports.
• Power BI or Tableau: More advanced tools that can connect to multiple data sources and allow for complex, interactive dashboards.

 

Reporting Automation

To save time and reduce human error, analytics agencies often automate reporting processes. They schedule reports to be sent to stakeholders at predefined intervals, using tools such as Google Sheets, Supermetrics, or Google Cloud Functions to run automated scripts.

 

3. A/B Testing and Experimentation

Analytics agencies help businesses test hypotheses through A/B testing and multivariate experiments. These tests allow for data-backed decisions about website changes, email marketing campaigns, or product features.

 

Experimentation Platforms:

• Google Optimize: Agencies set up A/B and multivariate tests on websites or landing pages using Google Optimize, integrating results with Google Analytics to measure the impact on user behavior and conversions.
• Optimizely or VWO: For more complex or larger-scale testing, agencies may use platforms like Optimizely or Visual Website Optimizer (VWO), which provide additional features like personalization and machine learning-based suggestions.

 

4. Attribution Modeling

Understanding the customer journey is crucial for businesses, and this is where attribution modeling comes in. Agencies help assign value to each interaction a user has before converting, providing a holistic view of which marketing efforts are working.

 

Attribution Models:

• Last-click attribution: This gives 100% credit to the last interaction before conversion.
• Linear attribution: This evenly distributes credit across all touchpoints in the journey.
• Data-driven attribution (DDA): Agencies set up DDA in Google Analytics, which uses machine learning to assign credit based on how each touchpoint contributed to the conversion. This is more advanced and requires high-quality, consistent data inputs.

 

 

5. Conversion Rate Optimization (CRO)

A core service provided by analytics agencies is CRO, which involves analyzing and optimizing the user experience to increase conversions. CRO specialists utilize data to identify points of friction in the user journey and implement strategies to improve performance.

 

CRO Techniques:

• Heatmaps and User Recordings: Tools like Hotjar or Crazy Egg are used to track how users interact with a website, providing visual feedback on where they click, scroll, or drop off.
• Funnel Analysis: Agencies use tools like Google Analytics or Mixpanel to identify how users progress through different stages of a conversion funnel and pinpoint where drop-offs occur.

 

6. Privacy and Compliance

As privacy regulations like GDPR and CCPA become increasingly important, agencies must ensure that all tracking and data handling is compliant. Analytics agencies are responsible for:

 

• Consent Management Platforms (CMPs): Implementing CMPs like OneTrust to collect and manage user consent for tracking.
• Data Anonymization: Ensuring that personally identifiable information (PII) is not collected or is properly anonymized, using techniques like hashing or encryption.
• Audit Logs: Maintaining logs of data collection processes to ensure transparency and compliance with legal requirements.

 

7. Advanced Analytics and Machine Learning

Some agencies specialize in advanced analytics, using machine learning algorithms to predict customer behavior, segment audiences, and optimize marketing strategies.

 

Predictive Modeling:

• Regression Analysis: This is used to understand relationships between different variables (e.g., how marketing spend influences sales).
• Clustering Algorithms: Agencies use clustering techniques to segment audiences based on shared characteristics, enabling more targeted marketing efforts.
• Machine Learning Libraries: For advanced machine learning tasks, agencies may develop custom models using libraries like TensorFlow or Scikit-learn, analyzing large datasets to predict outcomes, optimize campaigns, or recommend products.

 

Still have questions?

 

An analytics agency offers a combination of technical expertise, data-driven insights, and marketing optimization services. From collecting and integrating data, to advanced reporting and machine learning, agencies empower businesses to make informed decisions, optimize user experiences, and maximize ROI. By staying up-to-date with the latest tools and technologies, analytics agencies are essential partners in navigating the complexities of the digital ecosystem.

 

Integrating tools like GA4, Google Tag Manager, Looker Studio, and BigQuery can transform how your business tracks and optimizes marketing performance. But leveraging these platforms to their full potential requires expertise and strategy. At Tagmetrix, we specialize in helping businesses like yours turn raw data into actionable insights that drive growth and increase ROI.

 

Whether you’re running a small campaign or managing large-scale data, our digital analytics services are tailored to meet your specific needs. Let us handle the complexities of setup, tracking, and reporting so you can focus on what you do best—growing your business.

 

If you still have any questions, please feel free to reach out using our contact form and we'll be more than happy to help.