Focus on the metric that matters – tangible business growth
By placing more weight on business outcomes, marketers can better understand which strategies are genuinely delivering ROI, writes Katherine Munford
In an increasingly digital age, many brands have become focussed on shiny new formats and the short-term sales that they can generate. This is perhaps unsurprising, given that advertisers are under mounting pressure to justify spend and, as such, want immediate performance metrics to track the impact of advertising spend.
However, transparency issues have been plaguing the industry for many years; ad fraud has created a lack of faith in the accuracy of performance data and spawned concerns about wasted ad spend. An estimated $19 billion in ad spend is projected to be lost this year alone. These issues have led to an erosion of trust within the entire ecosystem.
In this climate, there have been numerous debates about the importance of restoring the balance in favour of traditional brand-building media that ensure broad reach but often can’t be evaluated using immediate ‘performance’ metrics.
However, while brand-building media are certainly important for driving long-term health, for many businesses, a clear business case will be required to justify the 60/40 expenditure split recommended by Binet and Field.
It is little wonder, then, that clients are beginning to vote with their feet over measurement. A survey of global marketers by the World Federation of Advertisers (WFA) found 43% are shifting away from CPM (cost per impression) as their key metric in favour of evaluating campaigns in terms of real business results. Increasingly, tangible business outcomes will be the only metric that matters to advertisers.[advert position=”left”]
This change in attitude represents a significant measurement challenge because of the explosion of consumer touchpoints both online and offline.
In this context holistic attribution – an approach that fuses digital attribution with marketing mix modelling – can provide a solution by focussing on revenue growth and tangible business performance over short-term metrics such as impressions and clicks.
By placing more weight on business outcomes, marketers can better understand which strategies, both online and offline, are genuinely working for them in terms of ROI, and what is proving to be wasted ad spend.
It may be some time – if ever – before we have a single-source dataset that measures all touchpoints in the online and offline consumer journey (media and sales) at a purely individual level. But at this stage, measurement and modelling can make use of all available data sets and techniques to deliver consistent measurement across all channels.
These insights give businesses an additional competitive advantage, providing actionable recommendations and a framework to plan against moving forward.
By taking this approach and gaining a big-picture view of how the whole media ecosystem is performing – including the granular insights needed to improve the performance of individual touchpoints – brands can drive greater business performance, and minimise the chance of money being left on the table.
As technology continues to advance, real-time measurement and forecasting are enabling increasingly accurate and dynamic planning and optimisation across media-buying platforms. With this technology, brands will be able to respond to changes in the environment with speed and agility.
With such advances in data-driven marketing, it is time for brands to take a more integrated and business results-driven approach to measuring marketing effectiveness.
Katherine Munford is managing director, Data2Decisions UK