Marketing metrics must reflect business impact
This is not the first time in history that marketers have been pressed to prove the impact of their work, far from it. The increase in the amount of data, growing number of sources of data, rise in synthetic data, and expectations around your ability to show the business relevance of data have skyrocketed.
This means going beyond ‘data-driven’ decisions when building your ROI strategy. You must have the right data at every step of the customer journey. And just because metrics are easy to capture, that does not mean they are the right metrics to use. Instead, they should be those that are tied to market performance and are incrementally valuable to one another.
Bridge the gap between outcomes and tactics
Nielsen’s latest Annual Marketing Report found that global marketers’ top priorities for 2024 are long-term and full-funnel ROI. However, 70% of these same marketers said they plan to increase their performance marketing spend and reduce their brand-building investments.
There is a clear gap in the goals marketers have and the tactics they’re using to get there. I believe a misunderstanding of metrics is at the heart of it. If you are measuring ROI only by what’s happening to the bottom line, you may be missing the bigger picture. Being too focused on short-term returns is proven to hurt your ability to improve revenue numbers down the road. Because just as consumers and users have a path they follow, your ROI has a journey, too.
Map your ROI journey
You can get to a destination without directions, but it takes a lot more time and effort. The same is true with outcomes; they’re consistently successful when you have a comprehensive plan. But the plan is changing.
For much of the last decade, performance has been tracked at the channel level. Did we hit our impression targets? Did we shrink the costs per click? Did we improve our bounce rate?
This approach fails on two fronts:
1. It confuses engagement for impact
2. It doesn’t reflect the consumer journey
ROI can’t be tracked by a range of data points at the channel level. True full-funnel ROI starts by aligning on objectives, defining KPIs from the outset, mirroring the paths consumers take and understanding how everything works together to achieve an outcome.
From the first point of contact to refining the reach and frequency strategy and on through the point of purchase and beyond, you have to map not only the consumer actions but the impact along the way in order to see what’s genuinely working at every touchpoint.
For example, top of funnel and bottom of funnel KPIs can often appear to be at odds. Perhaps the keyword search volume is high, but it’s not translating to pageviews. This is too narrow of a view. Instead, look at the bigger, cross-platform picture. Is the lead volume up? How are those leads contributing to the pipeline? By zooming out to look at the bigger picture, a more consistent story should emerge.
Plotting your ROI journey must happen before anything else, because you can’t always retroactively measure outcomes. If you don’t plan to measure KPIs like Brand Lift and Sales from the beginning, you won’t be able to measure them at all. And even when you can do retroactive-looking metrics, it can be a prohibitively large effort for most teams.
Know and report the right metrics
When trying to determine what metrics reveal impact, I’ve found this question to be a helpful litmus test: Will the results be compelling to your CFO?
It’s not uncommon for marketers to stay focused on metrics like impressions, frequency, clicks and downloads. While valuable, they rarely translate for CFOs. Relevancy is what matters to Finance, and it’s up to marketers to draw the connecting line for them.
This doesn’t mean you need to stop tracking things like likes, clicks and listens; they’re a valuable gut check. But they shouldn’t be the foundation for strategic reporting.
This has been a particularly challenging season for the advertising industry. We’ve all had to contend with change coming from every possible direction. As paths to purchase continue to fork, impact continues to be a guiding light. As long as you know where to find it.
For more insights on how to sharpen your ROI strategy, download the Nielsen’s 2024 Annual Marketing Report.
