In an uncertain economy, there’s more pressure to ensure that every dollar you spend on marketing and advertising is working far harder than it used to. Marketers are increasingly looking to owned and earned media opportunities in an effort to help drive ROI. And business leaders simply want to know that their efforts, assets and spend are all moving the needle for their business.
One approach to drive marcom efficacy and improve ROI is to apply far more rigor and detail around measurement techniques, to prove what is working well and to identify, and change, what is not as successful.
While there is more of a push for measurement and metrics now, in reality, successful marketers are focused on this at every turn and in every economy. Accurate measurement and meaningful metrics provide a clear understanding of what is working and can significantly improve business outcomes. We are emphasizing that measurement is an ‘always on’ activity.
The more complex aspect of measurement is that there are so many things to measure. Trying to measure everything would be overwhelming and impractical. Rather, it’s vital to determine the right metrics — and the right combination of metrics — to match your specific business goals and objectives at any point in time.
You can keep it relatively simple to manage toward the specific outcomes you seek as regards digital marketing and advertising efforts, by using the best metrics for each objective. For example, brand awareness efforts may be measured by traffic levels, followers added and reactions whereas a specific campaign may be measured by a specific user action, click or conversion.
Along with selection of the best metrics for your objective, the combination of metrics you track across channels is equally important. Why? Often, marketers measure the performance of each activity separately, as if they work independently of one another. In fact, a highly effective marketing strategy will employ a variety of tactics that work together to maximize impact and results. The combination of metrics analyzed together are indicative of performance and provide you important clues on how and where to deploy the bulk of your ad spend.
Here are a few examples which are relevant to many businesses. These examples are focused on digital marketing and advertising channels and efforts.
First, let’s say you are a newcomer to an already crowded market category. One of the first things you’ll want to do is build brand awareness and create engagement. Brand awareness is all about building familiarity with prospects — about your brand, your business and your products or services — differentiating you from the competition. And engagement helps you understand efficacy of the relationship between your marketing efforts and the market’s reactions.
So, if brand awareness is your goal for marketing and advertising efforts, the metrics that matter will be —
This metric is used to quantify the number of digital views or engagements of a piece of content, usually an advertisement, digital post, or a web page. In traditional channels, this is called ‘ad views’.
Website traffic refers to the total number of web users who visit a website. Web traffic is measured in visits, sometimes called "sessions”. Use tools like Google Analytics to track the number of visitors, page views, and unique users.
On social media, a follower is a person who likes, subscribes and follows specific accounts or pages in order to receive notifications and view the content from those creators which are posted on their news feeds of the specific social channel. Keep track of the number of followers on your social media profiles to see how your content is performing.
This metric is used to quantify the number of digital views or engagements of a piece of content, usually an advertisement, digital post, or a web page. In traditional channels, this is called ‘ad views’.
Some relevant engagement metrics would include —
Engagement rate measures the percentage of times a piece of content was interacted with out of all the times it was seen. An engagement or interaction typically means clicking, commenting, expanding, liking, and sharing a piece of content or advertisement.
An interaction between a viewer and your ad/content where a viewer ‘clicks’ on the ad in order to be taken to a specific site (I.e. landing page or website) for a specific reason (I.e. more information and/or conversion). A conversion is taking the next action (I.e. sign up for a newsletter, follow or make a purchase).
This measures the percentage of visitors who leave your site without interacting with it. Look at the pages where the bounce occurs to determine if the content or UX/UI is part of the problem.
Page visits are a measurement of the number of viewers who arrive at your site from an outside source, like an ad or a search engine.
A mature business, looking to do more with a smaller budget.
Next let’s assume you are a mature business, a leading choice perhaps, in your category. But the economy is tightening and you want to continually drive higher ROI from your marketing spend given the pressure on budget. If that’s your situation, you’ll want to focus on ‘bottom-of-funnel’ tactics and the metrics that measure them.
Bottom-of-funnel marketing involves creating content that is specifically focused on communicating the value of your product or service and encouraging prospects, quite overtly, to make a purchase. Bottom-of-funnel content often includes things like product demos, case studies, customer testimonials and highly personalized email campaigns.
The metrics which can help measure bottom-of-funnel tactics include —
Conversion rate measures the percentage of viewers who take a specific action, such as making a purchase or filling out a form.
This metric measures the cost of acquiring a new customer and includes the costs of running ads and/or creating content. Cost per acquisition helps you assess the cost-effectiveness of your chosen marketing strategies.
The ultimate marketing goal — return on investment measures the overall financial return on your marketing efforts. In a bottom-of-funnel campaign, for example, we’d measure things like total revenue generated from newly customers attributed to a specific campaign. Tracking ROI lets you assess the overall effectiveness of a bottom-of-funnel efforts to maximize revenue.
For many businesses which rely on repeat customers, customer lifetime value is an important metric. It is a measurement of how valuable a new customer is to your company, not just on a single transaction basis but across their extended relationship with your business. Measuring customer lifetime value helps you assess the long-term gain of adding new customers through bottom-of-funnel campaigns.
If your business is an ecommerce platform, things like cart abandonment rate and average order value will be important to understand how your bottom-of-funnel efforts move the dial. Cart abandonment measures the percentage of users who add items to their cart but don't complete the purchase. An average order value analyzes the average amount spent by your customers, per order. You can move these metrics positively (abandonment rate down and average order value up) with effective bottom-of-funnel campaign offers.
You can use your marketing and advertising effectively to win in every economy. The key is smart measurement, the right metrics, and optimization.
Be sure to select the most relevant metrics for your business goals and the channels you are using. Analyze those metrics in combination to help you assess the performance of your efforts and refine from there.
Be careful that you do not drown your team in data. With a clean understanding of matching metrics to business objectives, you can apply solid techniques to keep it simple, understand the key insights from the metrics you measure and, most importantly, act upon them to optimize your results.
Lovely People can help you understand and apply highly effective marketing measurement, to optimize your results. Let’s talk.
Read the whole series. Do more, with less.