The advertising and marketing ecosystem is in a neck-and-neck race to keep up with ever-changing consumer trends, an explosion of new marketing channels, and a plethora of new Internet-connected devices.
To swiftly respond to the rapidly shifting landscape and drive return on investment (ROI), enterprise marketers can no longer view marketing performance merely by channel-specific metrics. In a world where consumers move seamlessly across a myriad channels and devices, successful marketers must understand the interplay of each element in the mix, how each channel and ad contributes to the entire funnel, and how they combine to contribute to the bottom line.
Only 35% of marketing executives say they can calculate the ROI of their marketing spend most or all of the time, according to a survey by B2B Marketing. The rest of those surveyed admitted that they can calculate ROI some of the time, rarely, or not at all.
So how do you maximize the financial effectiveness of marketing and generate customer engagement?
The answer is twofold: You need to avoid common measurement errors to extract the most actionable data while simultaneously measuring all touchpoints throughout the purchase funnel. The two processes go hand in hand. With those metrics, you can build an agile marketing strategy that can adapt to the pace of technology change and consumer behavior.
Three Common Measurement Mistakes
With the availability of nearly unlimited data, numerous marketing metrics can be considered. All metrics will measure some kind of value, but you have to decipher which processes will most clearly reveal true ROI.
Below are three common measurement mistakes to avoid so that you focus on the most relevant metrics leading directly to the bottom line.
1. Taking the easy route
The easiest, quickest approach to measure the results of various channels is by measuring the last consumer interaction, known as "last-click attribution." The average consumer engages with 18 pieces of content and influences before ending at a purchase, according to The Guardian. With the influx of new platforms and devices, such as social media, mobile, and video ads, there are virtually endless paths each and every consumer can take. Measuring by the last click or purchase point therefore ascribes too much value to one channel in isolation.
2. Attempting to track every activity and click
On the other hand, marketers can try to track consumers across every touchpoint by sifting through large amounts of data sets, such as social media "likes," downloads, website browsing, reviews, and more. This approach is typically reserved for enterprises that have very large budgets, technical and analytics teams, and time for execution.
Though mapping out a customer's total purchase experience might give real value in understanding individual consumer behavior, such projects have high risk of collapsing under their own weight, taking too long, costing too much, and leaving no room for agility. With today's rapidly evolving market, large projects frequently become DOA because the market has changed dramatically during a lengthy implementation.
3. Dividing and conquering
Most marketing organizations are still divided by channel, with one team focusing solely on social, another devoted to display, and so on. Compounding this are agency relationships also divided by media type and channel.
The most frequent outcome is that the metrics and measurement approaches are also divided across these groups, with disparate data, tools and KPIs that don't align with a common goal. Think about it: If the customer experiences all the various marketing and advertising content and messages, why should the teams (and metrics) not be aimed and aligned at the ultimate customer goal?
Establish a Common Metric Across Media
We have a myriad of metrics by channel—from social "engagement" to search CTR to the squishy-seeming "awareness" for upper funnel ads like TV—but all marketing efforts influence and contribute to the customer funnel, as well as work together with other ads in the funnel.
So, why do we so frequently fail to have a common metric or KPI to tie these efforts together?
As marketers today, we are accountable for the results of each dollar we invest—whether in TV, social, or mobile. Linking each and every ad to financial performance through such metrics as return on ad spend, ROI, and cost per acquisition is essential. Having consistent, apples-to-apples, ROI-focused metrics across channels and ads is also the only way you can meaningfully make smart tradeoffs across your spend allocation, upping your investment in high-performing ads while scaling back low performers.
This common linking metric also needs to account for how each ad contributes to the performance of other ads, identifying the complex cross-channel interplay between ads and activity in different channels, at various points of the funnel.
If the average consumer engages with 18 pieces of content and influences before making a purchase, the task of your ROI measurement approach must be to quantify (using a consistent metric) precisely how much influence each of those 18 touchpoints had in driving your results.
By understanding the role every ad at various stages of the funnel is playing, you uncover opportunities (sometimes in unexpected places) to invest to drive even greater ROI from your overall mix.
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Finally, in today’s fast-changing landscape, the best measurement approach is only as good as its timeliness. The value of insights decay faster and faster as market change continues to accelerate. So, make sure you employ an agile approach that can keep up with your consumers and the market.
Measurement approaches that are actionable, persistent, and can rapidly adapt and update to the current market, will keep you from making poor decisions and falling behind the market, while ensuring the strongest ROI at every stage of the funnel.