If you missed the first post in this series, previously we looked at 4 principles for achieving business results in the ‘sea of big data.’ In this article, we’ll explore: Principle 1: Establish a KPI framework, with a focus on marketing measurement.
Marketing includes an increasingly complex set of communications across a wide range of social, digital and traditional channels. This data explosion makes it challenging to measure marketing and reach informed decisions, but it’s more important than ever in our near real-time marketing ecosystems.
Without a common language and objective measures, it’s easy to fall into a trap where every marketing effort looks like a winner. If your company assesses marketing across campaigns or regions – but doesn’t use consistent metrics it’s difficult to know how to deploy funds or even identify and apply best practices.
We’ve learned that in order to really have an impact and drive marketing returns you need to distill the complexity into an easily understandable framework. That framework should tie in directly to business results, focus marketers on a handful of key measures, and be convincingly articulated to the C-suite.
Where to Begin on a Measurement Framework?
For some companies, measurement and tracking is more straightforward. More complex, brand-oriented marketing organizations need greater investment to construct a successful measurement framework.
Three steps that have led to success are:
- Set clear objectives
- Establish long-term, higher order metrics (Tier 1)
- Identify 3-5 operational KPIs (Tier 2)
The central tenet of effective measurement is to start with clear objectives. This allows us to determine metrics that map against the specific goals. Using a simple marketing funnel can serve as a starting point for your goals. Once strategic goals are defined, develop a two-tiered system with higher order, and operational metrics. Interlocking a more sophisticated structure with operational metrics has many benefits outlined below.
Tier 1: Higher Order Marketing Measures
For a global brand, marketing measurement will rely on traditional (and still relevant) tools like brand tracking surveys and media mix regression models. These are powerful tools that can provide rich insights when soundly structured, but they cannot provide quick or immediate feedback. An established brand won’t get enough movement in its equity indices month by month, or even quarter to quarter, and the number of observation periods (e.g., weeks) needed for effective regression limit its real-time ability.
So annual targets for higher order Tier 1 metrics might include a composite brand equity score and an MROI (Marketing Return on Investment) value. These measures are important because they are clearly linked to business results and can be broadly understood across the company and compared across geographies. Additionally, they can provide information on established competitors and marketplace positioning.
Tier 2: How to tie Likes & Tweets to Business Results
Now let’s take a look at the Tier 2 operational metrics. A global marketer is reaching audiences through dozens of platforms and channels – each with its own set of measures: Likes, Tweets, Views, Shares, Follows, GRPs, and more. How can you value and compare these? How can you link them to Tier I metrics? Firstly, you need to catalogue and harmonize metrics across channels. This effort will allow you to identify and begin to prioritize how the metrics tie in to your marketing objectives. Next comes the tough part, linking these to Brand Equity and ROI.
Ideally, you have all your granular marketing data accessible, structured and stored in a common platform. If you do, you’ll be able to begin the ongoing process of multi-tiered models that incorporate brand results and comprehensive social & digital data streams into your MROI modeling. Even if you don’t yet have this infrastructure in place you can work towards the same result. Start by identifying the number one marketing priority – perhaps its ‘awareness.’ Now, your harmonized data will help identify a range of marketing impression metrics tied to awareness. Marketing leadership needs to hypothesize which of these will be most impactful – perhaps brand impressions shared by a social contact. Finally, you can establish the hypothesis metrics as the Tier 2 KPIs and test how they drive your Tier I metrics.
By identifying 3-5 operational KPIs for Marketers to focus on, you’ll generate learnings across the market-level ‘laboratories’. In our experience, marketers will strive aggressively to exceed their KPI targets and find ways to maximize their budget in this pursuit. You’re bound to learn about both best practices to disseminate across markets, and measurement loopholes that need to be closed!
Putting it All Together
To recap, you’ll want clear strategic objectives agreed across the team. This will allow you to define your Tier 1 higher order marketing measures and subsequently link in Tier 2 operational metrics.
A few additional tips should help your measurement framework succeed. First, accept that there’s no perfect methodology, but using one consistently will yield learnings from the trends. Second, use a centralized team to ensure global consistency and educate marketers & agency partners. Finally, make sure you’re investing appropriately in the data collection – without a near real-time marketing data platform the sea of data will be stormy!
THIS IS A RE-POST FROM MARK’S LINKEDIN SERIES. Stay tuned for more from Mark in the coming weeks.