Lucy Vadasz: 900286226
In research conducted by Mintz and Currim in 2013, out of 438 managers only 25% reported on 8 of 10 marketing-mix decisions (2013, p. 27). Merely 16% reported on price promotions and only 10% reported on distribution decisions.
But with distribution decisions and price promotions so relevant in developing an integrated marketing campaign or pitching for marketing budgets, why are managers neglecting to include these insights in their reports? It’s because it’s time consuming, costly and frankly many marketers don’t know where to start.
Marketing metrics are difficult to report on for many reasons:
- Brand equity isn’t measurable on the back of a campaign, it takes years to build. Brand scores and customer perception surveys take time to implement and evaluate, as well as $$$ (see brand equity composition in figure 1)
- Above the line (ATL) advertising is difficult to measure. Marketers have tried trackable URLS and the fleeting scannable QR code. In reality, Google is the primary online entry point for consumers therefore direct response is often not attributable.
- Digital data is complex and often not easily to translate into dollars. Formulas are available but not watertight and calculations take time and dollars. Additionally, online conversions may be missed and not attributed.
However, before looking at what should be reported on in marketing eyes, I want to consider why are we reporting? and who is our target audience?
Ideally, the metrics used in reports depend on the user of the data. So, when marketing management is reporting to board-level, marketers may choose to represent financial data such as Return on Investment (ROI), Discounted Cash Flow (DCF) and Return on Customer (ROC) (Ambler & Roberts 2009, p. 734). However, when digital marketing agencies are reporting to their clients, it may include marketing metrics, such as market share, loyalty and share of customers (Mintz & Currim 2013, p. 29).
So how would you demonstrate the value of digital marketing to your CEO?
10 years ago, your Chief Executive Officer (CEO) may rolled their eyes or cited wastage should you wish to invest in digital advertising. Now, CEO’s sit in meetings requesting spend on digital marketing, although their knowledge of the acronyms is often dubious.
Today, digital marketing and social media plays a fundamental part in integrated marketing campaigns, not to mention ‘always on’ strategies.
But why now? What’s the benefit and why the demand?
It’s because it’s highly measurable AND allows for two-way flow of communication, otherwise known as a conversation with your customers.
Impressions, page views, time spent on page are a few arbitrary inclusions in many social media reports. Unfortunately, this doesn’t mean much to anyone, let alone the budgetary decision makers.
What CEO’s really want to know:
- Conversion rate: although this doesn’t always indicate a sale, it shows movement down the sales funnel.
- Channel source: where your customers are coming from. This helps to validate spend within your marketing strategy.
- Lifetime value: as the old saying goes, it costs five times more to attract a new patient than retain one.
- Marketing ROI: proving that what you spent on marketing can be returned through sales.
(Alley Watch 2015)
It’s about destination to sale
“Half of executives are not informed, engaged or aligned with their company’s social media strategies in any capacity,” Altimeter Group ‘The Evolution of Social Business.’
Account-level view of metrics through to conversion – this is what is important to CEO’s – company growth! Figure 2 shows that while traffic to site is important and content quality is vital in motivating users, this is expected success. The CEO wants know the outcome of the marketing efforts – warm leads, conversions and sales. It’s the end outcome that impacts the businesses bottom line.
So what does that mean for marketers?
So how do we prove to CEOs or the senior leaders writing our budgets that digital marketing is necessary:
- Reframe digital reports
- Connect social plan to organisational strategy
- Encourage involvement in social engagement
There is no one-size-fits-all for marketing analysis… when it comes to reviewing performance, the analysis depends on the marketing mix and developing a cluster of metrics to suit.
Aaker, D. A., & Joachimsthaler, E 2000. Brand leardership. New York: The free press.
Ambler, T and Roberts, J 2008, Assessing marketing performance: Don’t settle for a silver metric. Journal of Marketing Management, 24, 733-750.
Mintz, O and Currim, I 2013, What drives managerial use of marketing and financial metrics and does metric use affect performance of marketing-mix activities? Journal of Marketing, 77, 17-40.
Webber, C and Solis B 2006, The Evolution of Social Business’ Altimeter Group, United States.
Alley Watch ‘6 Online Marketing Metrics You Need to Know’, 1 December 2015, retrieved 27 September 2016 <http://www.alleywatch.com/2015/12/6-online-marketing-metrics-need-know/>