Measuring the ROI of data activation to validate its impact on business

Highlights

You'll learn about how to effectively measure the return on investment for your B2B data activation initiatives.

• Define clear objectives: Set specific business goals tied to data activation, such as increasing sales pipeline or lead conversions
• Quantify costs: Calculate the total costs of software, tools and operational expenses
• Measure benefits: Track revenue growth, cost savings and customer satisfaction
• Calculate ROI: Compare net gains against total investments in data activation
• Validate and adjust: Test your calculations and refine assumptions for accuracy

Start measuring ROI now to optimize your B2B data activation success.

Turning data into insights that create value and support decision-making is a dream for every business. Data activation, driven by a data activation layer and tools like a real-time CDP, does just that. But it is never enough just to deploy one and go from there. You want to measure its impact, and there are many reasons why you should do that.

For one, it helps you prove the value of your data activation efforts. It enables you to see what is working, including high-impact areas. So, beyond data collection and ingestion, you want real-time identity resolution, advanced segmentation and targeting and actionable insights that improve your decision-making.

What is data activation?

In simple terms, it is about making raw data available in a form that businesses can use to create value and enhance operations. So, you collect and store data. Then, you move it from the data warehouse to a real-time CDP. The CDP builds customer profiles and, through the data activation layer, makes them available for use by different systems within the organization.

Data activation enables you to translate customer data to support the delivery of personalized campaigns and engaging customer experiences. It helps you make data-driven decisions. Putting stored data to use enables you to manage account-based campaigns based on intent signals or even automate lead nurturing.

When should you activate data?

Three conditions need to be true before you engage in data activation initiatives.

• The data should be clean and relevant — low-quality data leads to bad decisions
• Your goals must be clear — articulate what you aim to achieve
• You have devised a way to measure its impact — tie data activation to specific outcomes

Why should you measure the ROI of data activation initiatives?

When you measure the ROI (return on investment) of your data activation, you can validate its impact on the business. It shows you the effect of your targeted marketing campaigns and how they contribute to business goals. Beyond that, it helps you gain the trust and confidence of key stakeholders, ensuring they can justify continued investment. It also allows you to:

• To secure stakeholders’ buy-in. Executives are more inclined to commit to future initiatives when you can show that their investment is delivering the required ROI.
• Optimize future investments. Measuring ROI enables you to identify your most impactful efforts. That insight helps you make the most of budget allocations by allocating funds to where they can deliver the most value.
• Support scaling successful initiatives: When you can identify high-impact data initiatives, you can scale them across customer segments, channels and regions.

Key metrics for data activation ROI

Now that we have established the importance of tracking data ROI, the next question is, what should you track? There are many singular metrics, but we simplify them based on cost and benefit metrics.

Cost metrics

• Investment in customer data platforms, data tools and integrations
• Operational costs include staff time and system maintenance
• Data downtime represents lost opportunities when data systems fail

Benefit metrics

• Revenue growth due to targeted campaigns and improved conversion rates
• Cost savings driven by automated workflows and improved business processes
• Faster and more accurate decision-making, leading to higher profits

Step-by-step: Calculating ROI of data activation

You have invested in collecting and storing data—now what? Beyond crunching numbers, you want to calculate the ROI of data activation to prove that your insights drive real impact. Think: turning abandoned cart data into a 15% revenue lift. This section shows you how to connect those dots.

1. Define objectives and KPIs: Set clear business goals tied to data activation, such as growing the sales pipeline by a certain percentage or improving lead conversion rates.
2. Quantify the initial costs: Add up all expenses related to data activation. This may include the cost of deploying a data activation layer, software licenses, vendor fees, integration costs, staff training and other resources.
3. Quantify benefits: Calculate the additional revenue and operational efficiencies generated by effective data usage in marketing campaigns. This involves tracking how much business growth or cost reduction results from these efforts.
4. Calculate ROI: ROI reflects the net value created by data activation compared to what was spent. So, compare your investments against the current revenues. Understanding this relationship helps you make informed decisions on future investments.
5. Validate assumptions and adjust: Adjust factors like conversion rates and attribution timing to test your ROI calculations. That way, you keep your estimates realistic and reliable.

Common challenges and how to overcome them

On paper, data activation sounds straightforward. In real life, it can get messy with vague KPIs, siloed systems and attribution issues. Here are some common factors that can explain why your “single customer view” still feels fractured—and how to fix them before they tank your ROI.

• Data quality and governance: As mentioned right at the beginning, you need good data for activation. Poor data quality leads to poor insights. To avoid that, implement a data governance policy to ensure data is secure, accurate and consistent.
• Cross-functional alignment: Large organizations are a combination of multiple moving parts. Teams and departments often have unique KPIs that can create silos and delay insights. To manage that, create a steering committee to agree on ROI metrics and methods. That way, you can keep the marketing team, IT and finance in sync.
• Isolating the impact of data activation: While key metrics can improve after data activation, it may not be entirely down to it. A controlled experiment, like an A/B test, can be used to separate the effect of activated data from other marketing initiatives.

Case studies

Land O'Lakes

Land O'Lakes chose Contentstack’s real-time CDP to unify customer data and power its personalized experience delivery. This increased conversion rates by 38% and clickthrough (CTR) by 29%.

Steve Rude said. "If you’re not getting the conversions, it means you weren’t hitting the right audience. You may not reach a million people, but we’re going to reach the right people with the right message. And that’s where Contentstack helps us."

Read more on how Land O’Lakes increased the conversion rate. 

Industry Dive

Industry Dive could not track the customer journey as it had no access to real-time data. Opting for Contentstack's real-time CDP allowed them to unify customer data for personalized customer journeys. This increased customer engagement by 40%.

"Our editors really see the value of Contentstack. They’re using it every day to shape their editorial content." Robin Re said.

Keep reading to see how Contentstack’s data tool powered Industry Dive’s CTR growth.

FAQ section

What counts as “data activation” in ROI calculations?

Data activation involves putting data to operational use. This includes using customer insights to personalize campaigns, automate workflows or inform sales strategies. If the data influences strategy or business decisions — and leads to value — then it counts as activation.

Can you calculate ROI for all types of data initiatives?

You can calculate the ROI of most data initiatives. However, some do not add value directly, such as data quality improvement. Hence, for such initiatives, you may have to use proxy metrics to estimate their impact, as the regular method will not be suitable.

How often should you recalculate data activation ROI?

You can recalculate ROI every quarter, twice a year or annually. You can also do it soon after a major campaign or system change. That way, you get real-time insights, stay ahead of performance trends and ensure your data initiatives align with the business goals. 

What is a data activation layer?

A data activation layer (DAL) is an integration technology layer that enables businesses to act on their data in real-time across their digital tools. It bridges the gap between data storage and activation channels, such as marketing tools, thereby minimizing the dependency on data engineering.

Learn more

The idea of measuring is to ensure clarity and accountability, and this is not any different. Given the huge investments that go into data activation efforts, marketers must measure their ROI to understand their impact and efficiency now and in the long term. Doing so also helps them make better decisions and use resources more efficiently.

With Contentstack’s data activation layer and real-time CDP, you can activate and unify first-party data, overcome data silos and segment customers based on real-time behavior. By doing so, you can craft hyper-targeted campaigns that deliver value to your business and drive real ROI. Talk to us today to get started.