What metrics should we look to for Marketing Measurement?
In 2019, we have made great progress in the measurement of marketing activity, but with increasingly more data to play with, it’s crucial we hone in and get this right.
Why start measuring?
“Measurement is the first step that leads to control and, eventually, to improvement.” H. James Harrington. As the quote alludes to, it is very difficult to have a positive impact on any campaign without having a full understanding of what campaign is working best.
Tracking relevant metrics allows you to pinpoint strengths, identify areas of improvements, learn about the behavior of the end consumer and provide deep insight into general performance.
Most importantly measurement allows business to improve return on investment. Typically, Brightblue find a 5% improvement in price Return on investment (ROI) or a 30% improvement in Media ROI – leading to significant profit increases.
Think about the objective first
In order to have an understanding of what the relevant metrics are to start tracking as a marketer, it is important to note the objectives of the activity you are dealing with. Ultimately, your interest is to navigate a customer’s journey from awareness of the product or service, to making a purchase.
Below shows a traditional marketing funnel. In Brightblue’s opinion this remains as true as a method to identify the objective of the activity. Any objective that a business should have will layer into a stage of the purchasing journey. What will change for all business, though, is the amount with which they invest in each stage of the marketing funnel.
What data can help us achieve the objective?
Aligning the right data to the objective is the next goal of measurement. Below we outline four types of data that we should be collating and what stage of the marketing funnel that they feed into.
- Reach: Lead Generation (stage of marketing funnel): outlining the number of customers that see your piece of activity (normally this will be impressions or equivalent)
- Engagement: Lead nurture: outlining the number of customers that interacted with your activity
- Trackable Outcome: Lead Nurture: These will differ dependent on the marketing type we are using. A trackable outcome for Paid search should be last click sales however for TV we may use site visits (for Ecommerce companies)
- Business outcomes: Sales: This might require more complex forms of measurement to understand how the activity truly impacted your business outcome
Measurement in isolation can lead to bad decision making
As investment decision move further into activities that are directly (or easily) trackable to the end goal. Brightblue typically see that media investment is heading in the direction of online media channels such as Paid Search or Affiliates.
These channels can be very easily tracked through traditional “last click measurement”. However, this measurement approach doesn’t take into account if a different channel was the original driver. For example, we may run a TV advert which can lead to the Paid Search. Last click measurement will assign this incorrectly to Paid Search.
This is not to say that this type of measurement is a bad thing – in fact it has set a golden standard as to how business should be aiming to track their investment decisions. It is to say that we should be using each measurement technique in the right place.
Tailoring measurement to business outcomes
Because I can directly measure it does that make it better? This is something that businesses should urge caution over when it comes to current measurement. Businesses should ensure that each piece of measurement is used to answer the question it is best suited to.
Brightblue Consulting are a London based consultancy which help businesses drive incremental profit from their data. We provide predictive analytics that enable clients to make informed decisions based on data and industry knowledge. Through Market Mix Modelling, a strand of Econometrics, Brightblue has a proven track record showing a 30% improvement in marketing Return on Investment for clients’ spend. If you are interested to find out more please contact us through email by clicking here and one of our consultants will get back to you shortly.