Marketing budgets now account for 12 percent of an organization’s revenues, marking the third straight year of overall budget increases, according to the Gartner 2016-2017 CMO Spend Survey. Digital is a leading force, and 65 percent of marketers in the survey said they would be increasing their spend in digital advertising.
While increased budgets don’t ring true for every enterprise marketer, there is a sense of urgency around the action Gartner proposes for organizations that are making digital a priority:
Action: Refine your use of attribution and marketing mix modeling to measure the impact of marketing and media efforts. Work with publishers and agency partners to continuously test new ad formats and ensure your digital advertising investments conform to the same standards of measurement and accountability as other marketing investments.
It’s easier said than done, but here are five areas you should be looking at to ramp up your digital media measurement for better business outcomes.
1. Define what value means to you
Before you dive into any analysis, modeling or optimization to try to improve the value of your marketing efforts, you need to define exactly what that value is. Spending the time to create a formal measurement framework will help you define the specific objectives your organization is striving for — and the key performance indicators (KPIs) that will expose success or failure.
And we’re not talking about just pulling a bunch of metrics out of your current reports: I can guarantee you that there’s no annual board meeting where the success of the company is resting on your bounce rate. What we mean by a measurement framework is that we define our business goals in the context of different user segments and different stages of a complex, multi-device, multi-touch path to purchase.
For example, what are the organizational objectives for a user who would be classified as a “loyal customer” in the “retention” stage of the customer journey? What exactly do we want them to do across specific channels, and even device-level experiences?
Once we’ve obtained this specificity across our key segments, we can then identify the five, ten or maybe a dozen different KPIs that collectively tell us if we’ve done a good job with that specific goal or if we need to focus on improvement.
This becomes our basis for measuring real, tangible value, and upon this framework, we can begin to improve.
2. Testing, personalization & optimization
Whether you’ve already invested in the latest solutions or are looking to test the waters first, there’s a range of ways to start optimizing your digital efforts quickly and with minimal resources.
Testing and optimization are low-hanging fruits that too few organizations are making use of. Our “State of Digital Marketing Analytics in the Top 1000 Online Retailers” (PDF) report shows that just 37 percent are leveraging testing and optimization tools, leaving a significant opportunity to create and refine customer-driven online experiences on the table.
The marketplace for testing, personalization and optimization tools is full of options, so there’s no lack of technology available to help marketers run experiments, personalize and optimize at scale.
Joining the list of leading tools like Adobe’s Target, Optimizely, Monetate, Maxymiser and more, Google recently launched Optimize 360, along with a free standard version of Optimize, which is likely to help drive better adoption of these critical functions.
Whichever tool or methodology you choose, building a robust testing, personalization and optimization practice into your digital strategy can help you achieve better results, attain greater ROI and save valuable resources by continuously identifying and improving upon the highest-value marketing activities.
3. Digital attribution
In the digital space, attribution is crucial to understanding the impact your digital media investment is having across all the channels you leverage.
There’s a path toward evolving sophistication here, and most organizations start out with the core reports of web or app analytics tools. They’ll tag their campaigns, track their conversions, and then look to see if a click on those ads resulted in that conversion. This is known as a “last touch” model, and while it’s certainly better than not tracking performance at all, it leaves out the impact of every single touch point before the click that resulted in the conversion.
To see the full value of upper- and mid-funnel activities, marketers will quickly move into other rules-based models, like first touch, linear, time decay and more. And looking at the data through the lenses of these models can help marketers better understand which channels are working at which points along that path to purchase.
The next step is leveraging massive amounts of data and the power of data science techniques to model and predict the actual lift each of your channels is providing. This data-driven approach can provide a much more accurate valuation of your campaigns. A host of digital attribution vendors and tools can help you model optimal spend allocations across all of these different channels to maximize your return.
4. Econometric modeling
While the digital realm is lucky enough to use actual cookies, user IDs, device graphs and more to map actual digital interactions all the way to conversion actions, the offline world is a little tougher.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.
About The Author