Whether you are trying to determine customer lifetime value or put in place a media mix model, marketing measurement can often be a complex and daunting task. There are, however, some steps marketers can take to improve the efficiency and effectiveness of their marketing metrics programs
Alignment – In my experience, this is one of the biggest challenges to putting in place an effective measured approach to marketing. That is, lack of alignment behind the need to weave metrics into marketing initiatives. Furthermore, lack of alignment among key departments—finance, technology, sales and marketing—on how measurement initiatives should be deployed and who is responsible for what.
Defining Success – How do we define success? What are the right benchmarks? Should we look at short-term gains in sales or an increase in customer lifetime value? Do we confuse efficiency with effectiveness, and vise-versa? In our industry, talk of ROI or ROMI is ubiquitous. However, marketers manipulate and redefining this term to demonstrate success where none exists.
Data – Data gathering can undoubtedly be a daunting task—tracking codes, DNIs, unique 800 numbers, surveys, POS results, etc. Even if there is a mechanism is place to gather both customer and marketing data, there must be a sufficient sample and enough observations. Furthermore, in order to draw actionable insights, data must be collected, cleansed and mined in a timely manner.
Technology – Even if the will to embrace metrics is there, must companies are constrained by their technology infrastructure. This is specially the case for SMBs. Technology consulting, as it relates to marketing measurement, could be one of the services offered by the new agency.
Attribution – This is a challenge that we faced when working with Dell and other companies. Today’s multi-channel marketing initiatives can be fairly complex—often reaching consumers simultaneously through many points-of-touch. How exactly do we know which ad pushed a consumer from consideration to purchase? We used a variety of methods to deal with the problem of attribution: from the often overused fairness approach to the last touch-point approach to developing RFM models that helped weight results.
Lag – Arguably, most marketing vehicles have a short-term effect. However, there is a residual value that should be taken into account. Often consumers get sold on products and services through long-term brand building initiatives that can be hard to track and measure. How do we account for this lag? As challenging as it may be, it cannot be ignored. Metrics strategies must include long-term equity building initiatives into ROI models.
Methodology – Marketers tend to apply simplistic models to complex measurement challenges. Statistical methods will vary depending on goals defined and data available. For example, media mix models will often involve some type of multivariate regression analysis—linear or logistic. These multivariate analysis should look at a number of dependent and independent variables. For instance, for certain initiatives it might make sense to go beyond the obvious look at the weather or search engine volume or the consumer confidence index. Furthermore, cost of creative production should be included in these models–but often is not. Ultimately, methodologies used are a factor of data available and measurement goals.
Staff – In my experience, the staff needed to provide marketing metrics services to clients cannot have a background on data analytics alone. It is important to also hire staff with an in-depth understanding of how business models work (i.e. MBAs, etc). Furthermore, it is important for staff to be familiar with account planning techniques as well as advertising models.