Building Performance Measurement Discipline into your Campaign

 

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John Wanamaker, considered by many to be the father of advertising, once said “half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Were John was alive today it is likely he would be a leading advocate for performance marketing and analytics.

Performance metrics and analytics serve as the foundation upon which strategic and tactical decisions should be based. They are powerful tools to improving performance and assure a positive return on your advertising dollar. Without these tools, marketers, just like John Wanamaker in his day,  must rely on gut feelings to understanding what is driving results. That is often a poor substitute for hard data. But for many companies, analytics are an afterthought compared with strategy and campaign development.

Keeping your analytics actionable can be challenging. Typical issues include:

  • Campaign results that are tracked and reported without drawing any clear conclusion on what is driving results and how to improve them.
  • Measurements are inaccurate but assumed to be accurate if they’re positive.  For example, marketers attributing negative results to the influence of external factors and positive results to marketing.
  • Performance metrics that are not tied to clear business objectives such as cost-per-lead, calls, visitors, sales, etc.
  • Incomplete performance metrics. Metrics that focus solely on the bottom line fail to bring sufficient insight into what is driving results.
  • Metrics measured without any knowledge of how (or whether) these metrics influence sales and financial contribution.

To avoid these pitfalls, Mercury Media recommends focusing on these key attributes that drive profit when crafting you strategic and tactical plans.

  • Marketing and campaign objectives must be aligned to business objectives. Too often marketing and campaign objectives are not aligned with business objectives. For example, increasing brand recognition is an important first step in facilitating a sale; however, if sales do not increase as well, marketing will be congratulating itself for a job well done, when in reality it failed in the most basic business objective, increasing sales.
  • Objectives must be quantifiable. If you can’t measure it, how do you know if you have been successful? Goals like “increase sales by xx%, have a marketing-expense ratio (MER) of $xxx, or a cost-per-sale of $xx.xx” allow marketing to quantify its fiscal contributions. In turn, quantifiable objectives will lead to metrics that can be used to achieve these goals. For example, if you goal is to increase sales by 10%, having a high brand recall but stagnant sales points to several potential problem areas. Creative might be entertaining but inadequately describe the product or lack a clear call-to-action or the price point might be too high. While more data is needed to rectify the situation, the numbers begin to point you in the right direction.
  • Measure the entire sales funnel, not just end result. Unlike marketing objectives, which should be tied to marketing’s contribution to the bottom line, marketing metrics should be designed to critique a campaign performance and improve results. Is the campaign generating a sufficient number of leads? Are they quality leads? Are leads converting? Which creative is performing? Which dayparts are performing? Is the media buy cost efficient? What impact is one advertising channel (e.g., TV) having on another (e.g., Online)?  By understanding the entire sales funnel advertisers and their agencies can adjust campaigns to maximize performance.
  • Avoid paralysis by analysis. It is easy to collect terabytes of data and spend days analyzing it, but do you need all this data?  More importantly,  is it helping you reach your business objectives? Having a clear set of objectives will direct what questions need be answered and what data you need to collect. This allows you to be more focused in your analysis. Failing to tie campaign results to business objectives yields results that do not provide actionable insights and are ignored by management.

With some forethought, today’s marketers can avoid John Wanamaker’s conundrum.  By aligning marketing objectives with the bottom line and identifying metrics to optimize their return, marketers will be well on their way to achieving a positive return on their marketing dollar and solving John Wanamaker’s problem.

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