What Are the Metrics That Matter?
by Beth Carlson
Posted on 02-07-2018
We’re bombarded by data these days. Say I want to book a table for an impromptu meal with friends. A visit to the restaurant’s website provides its address and hours, displays its menu and prices, and photographs of its signature dishes. They may cite the number of tables, brag about the variety of gin behind the bar, or offer chapter and verse about how the ingredients are sourced. With a bit more digging, I can unearth professional reviews—or visit a site such as Trip Advisor, and read customers’ descriptions of their dining experiences. But what if all I need on that particular night is someplace equidistant from all our offices, near public transport? The rest becomes noise.
Data also comes at advertisers fast and furiously, and businesses may struggle to determine which success metrics are the right ones to focus on when developing an effective, profitable digital marketing strategy. Traditional digital media metrics such as completion rates, clicks, and cost per action don’t always easily tie back to a brand’s bottom line. Nor do they necessarily give an actual measure of the ad’s effectiveness—how do you know that your ad actually caused that person to click?
To put that in perspective, between 2000 and 2009, the divorce rate in Maine and the state’s per capita consumption of margarine were directly correlated, but it’s safe to assume that one did not cause the other. The same goes for marketing—if someone sees your ad and then buys your product, correlated metrics assume that the ad influenced the purchase, but was that person planning to buy already?
This ambiguity makes it hard to allocate budgets appropriately, let alone create a winning strategy. You’ll also be required to link digital investment to your organisation’s overall business objectives (often to prove success to higher-ups, or ensure ample budgetary spend in the next fiscal year). Thus marketers have quite a struggle ahead of them.
They know it, too. At the 2017 Digiday Programmatic Marketing Summit, marketers discussed KPI overload and their frustration in trying to tie advertising metrics to business goals. A lack of quality data, and an increasingly complex marketplace were also cited as concerns. What’s the solution?
Understand Different Data Sets
It has always been challenging to link online marketing spend with offline behaviour, but thanks to the wealth of newly accessible data, those challenges are waning. The hurdle now is sifting through all those metrics to find the few that actually have an impact on your brand’s unique goals. Not all metrics are useful to all brands. There are dozens upon dozens of data points, and each comes with its own pros and cons. Some examples include:
- SKU and product-level metrics. Companies such as Nielsen, IRI and Kantar glean insights from panel data, loyalty card data or point-of-sale information in order to understand in-store purchasing behaviour. This is great for brands seeking insights into how particular product lines are performing across audiences and locations.
- Transaction-level data. Anonymized data on customer debit and credit card transactions is available from financial institutions. The main difference between transaction data and SKU data is transaction data cannot measure sales at the product level. This type of measurement makes sense for retail and dining categories. Due to privacy concerns, however, access to this data is largely limited in the UK and the EU.
- Location data. Location metrics leverage cellphone data to provide insights into where, when, and how customers move through the world. It’s ideal for measuring whether online marketing drove real world store traffic. The location data space is crowded, so it’s important to asses each provider and choose the right partner for your brand.
- Reach and frequency (R/F) data. It’s important not to forget about the measurement tool that has been around since the Mad Men era. Leveraging partners like Nielsen or Atlas to measure audience and exposure, in conjunction with action-based data, will help brands start to understand the effective R/F levels to drive business outcomes.
As the market demands more measurability, more solutions emerge daily. It’s important for brands to seek out objective partners when choosing a measurement solution, and understand that working within a walled garden doesn’t always paint a full picture. Independence is imperative for an unbiased view.
Determine What Matters for Your Brand
You’ll need to:
- Design experiments to reveal which media metrics can be tied directly to ROI—and which aren’t worth the effort.
- Ensure your experiments are analysing actual lift rather than correlated metrics, so you can be confident that you are identifying the metrics that actually make a difference.
- Invest in the right omnichannel software that gives you a holistic view of all your marketing efforts, including both online and offline sales.
- Find a good partner who’s well-versed in advanced media measurement, and the various data types and partners in the space. It’s a complex landscape to traverse, so make sure you enlist help if you need it.
Remember, it’s a crowded field. If you’re not sure which data to use, or whom to trust to provide it, rely on an experienced third-party such as Adobe Advertising Cloud to guide the way. Honing in on the right data—and finding the right partners to provide it—will play a big role in your marketing success.
Topics: Digital Transformation, attribution, data analytics, footfall, location data, media metrics, Metrics, Roi, UK, UK Exclusive, Digital EMEA