Marketing Effectiveness: Moving Beyond Siloed Metrics & Measuring What Really Matters

Over the last 10 years, firms across most industries have seen their marketing budgets rise steadily. And with digital strategy becoming the core of many companies’ business strategies, firmly backed by C-Suite executives, that trend seems likely to continue going forward.

Marketers are always looking for new ways to target audiences and new channels on which to reach them. As the field of marketing grows and evolves, one concern continues to image: how do you measure a campaign’s success and incremental lift it brings? How do you determine the impact your marketing strategy has had on the business drivers and whether it was worth the money you spent on it?

Virtually every digital channel specific marketing platform comes with a built-in metric to track how your campaign is being received. There’s also a wide range of independent analytics tools that can provide further insights into various marketing metrics. In spite of that, surveys after surveys have found that the most companies still struggle with how to measure and understand marketing’s worth and quantify its impact on the business. Our team’s discovery sessions with numerous marketing executives and practitioners uncovered three main challenges:

 

Challenge #1: Attribution challenges with the non-linear customer journey

 

The process of finding prospects, generating leads, and converting them to sales is most often compared to a funnel. It moves from Awareness to Interest to Decision to Action, with that action being the customer buying your product.

The problem is, that’s an extremely broad and rather simplified way of looking at things. If you’re going through a funnel, there’s really only one direction you can go. But in today’s diverse marketing world, there are all sorts of different paths the customer can take, which all lead to the same conclusion.

A prospect might become aware of your brand by seeing an ad you placed on Facebook, or a tweet shared by someone they follow on Twitter. They might have seen one of your videos on YouTube, read your blog, or seen a billboard out in the real world. From each of these different beginnings, there are just as many ways that they can move to the Interest stage, and so on.

The process is less like a funnel and more like a journey—and a non-linear one, at that. The prospect may well be targeted on multiple platforms at once, both online and offline, each of which plays its own part in bringing them towards the sale. You can track the effectiveness of a single post on a single platform, and how many people engage with it, but when you’re dealing with multiple campaigns across multiple channels in all different media, it’s much more difficult to determine exactly how much impact each facet has on a single conversion.

In addition, most organizations run tens to hundreds of campaigns at a time. Dividing these campaigns between control and experiment group to perform the lift analysis at an individual campaign level may not be feasible.

 

Challenge #2: Measuring for short term v/s long term marketing effectiveness

 

Marketing may be complicated, but metrics are simple—and that’s a problem. Many marketers get distracted by numbers that are easy to measure, rather than focusing on the ultimate goal. There are some channels where it is much easier to get side tracked by short term metrics. How many followers do you have on Twitter? How many Likes did your latest post get? How many people shared, or commented? How many people are visiting your website, watching your YouTube videos, or reading your blog?

It’s tempting to look at your high number of Likes, Shares, etc. and think you’re doing well. But while those things are important, they’re not the end goal. You may be reaching thousands of people with your content, but how many of those people are actually buying your products? How many of them are your repeat customers? How many are your brand champions? It’s easy to track for a short-term goal and strategy. But there are lot of campaigns with longer term goals (for example brand awareness campaigns) and not tied with shorter term metrics such as conversions or revenue. The problem is, your success in those longer-term campaigns and eventual goals is harder to track.

A lot of companies make the mistake of ignoring long term marketing initiatives by focusing solely on short term successes and campaigns as they are much easier to quantify and even justify. But if you can’t look at the big picture, you put your company’s entire future at risk.

 

Challenge #3: Limitations of Marketing Mix Modeling & Attribution Modeling

 

There are two general approaches to measuring marketing effectiveness: Marketing Mix Modeling (MMM) and Attribution Modeling. Marketing Mix Modeling technique involves running statistical analysis methods on various sales and marketing activities over a period of time in order to quantify the impact of various campaigns, its impact on the sales and their overall ROI. This allows you to find the right “Marketing Mix”: the best tools to achieve your goals within your target market.

Attribution Modeling is similar, but focuses specifically on digital channels, measuring digital touch-points: i.e. all the ways a consumer interacts with your brand online. From there, you can determine which of those touch-points to attribute your success to, and in what measure.

MMM has been standard procedure in marketing firms for decades, and can be very effective. However, it has severe limitations when it comes to applying it to today’s complex physical/digital world. For starters, it needs reliable historical data in order to produce meaningful results. The other problem is how long it takes to get results. They can lag your marketing spend by several months, making it difficult to fine tune your strategy and where you put your resources in near real-time. It also provides results at an aggregate level, often lacking insights needed to fine tune or make decisions at a campaign level. Thus, rendering it ineffective for marketing practitioners who need to make daily or weekly granular level decisions.

Attribution models provide results much more quickly, and in greater detail. They can track the non-linear journey more effectively, following multiple touch-points for each consumer. The problem is, they don’t work to determine marketing effectiveness over non-digital channels. They’re also less helpful when it comes to things like brand awareness campaigns, whose end goals aren’t as concrete as simply making the sale.

So what’s the solution? How do you overcome these challenges and measure your marketing effectiveness accurately?

 

Integrated & Intelligent approach to the marketing measurement

 

The answer to this challenge lies in having an intelligent & integrated solution that’s able to analyze data from various touch points while keeping customer at the center. It can not only provide insights into performance of each channel and how to allocate marketing budgets across those initiatives but also granularity of results that each individual marketing channel group can take into consideration during the day to day running of campaigns across those channels. This ensures that the marketing execution is directly aligned with the overall strategy and company’s business goals. It enables the entire organization to be in constant conversation around what’s working and what’s not – and adapt its strategy on the fly.

 

Summary

 

As the role of Marketing is growing across organizations and Marketing Executives are getting an equal seat at the decision table, it is imperative that they have an equal share of the responsibility on the metrics that matter to the business – be it revenue, profit, and market share. Neither traditional approach to the marketing effectiveness nor simply relying on the metrics coming out of digital channels are going to provide complete picture to be able to make the right decision. Having an integrated approach that helps with strategic planning as well as tactical execution can ensure that you are helping your business gain a competitive advantage in today’s fast changing and fast-moving marketplace.