question of the week
What metrics work for measuring effectiveness today?
Not sure which metrics to measure effectiveness with? We speak to a number of industry experts to find out their approaches
24 October 2022
Which metrics are best for measuring effectiveness? How quantifiable are CTRs and engagement time and can a campaign's brilliance be boiled down to numbers?
The IPA's biannual Effectiveness Awards took place earlier this month - in light of this, we question whether ongoing tracking is enough of a metric and whether companies are measuring too much or too little. What marketing effectiveness capabilities do you invest in and are they working? And why did you decide to use that particular measure? Is measurement consistent and in-built into your strategy plan or is it something you return to on an ad-hoc basis?
We spoke to a number of industry insiders to find out how they viewed effectiveness and what metrics they implemented to measure success.
Peter Markey, chief marketing officer, Boots
The start point for me is to be clear what is it that I want my marketing activity to achieve. Measurement I believe needs to be a mix of a number of elements, business metrics (Revenue, Profit), brand metrics (Affinity and Perceptions) and campaign metrics (ROAS, Engagement). Only focusing on one or other does not create a rounded view of performance / effectiveness. Equally becoming too short term focused and only looking at metrics for short term performance risks missing the longer term effects, leading to a drive towards short-termism and performance only activity. What we have seen at Boots is a balanced approach to measuring effectiveness both long and short term as well as across a range of metrics means you get a rounded view. Key is to understand how these metrics interact and how you can look to drive your overall goals by driving each part.
Simon Wilden, measurement partner, Goodstuff
The effectiveness zeitgeist seems to be dominated by one topic – leading indicators. The effectiveness movement has done a great job of convincing the agency and client community what works in the long-term. We know we need to be building emotional connections, distinctiveness and committing to long-running campaigns and strategies – but in such a quantified world as ours, people are impatient, insecure and want to see something moving quickly to reassure they’re on the right track.
Short term, dynamic metrics that have a proven relationship with more stable, valuable, long-term success metrics seems to be the holy grail.
Econometric modelling, done well, with all the right data and organisational buy-in does a great job of proving the value of advertising and marketing spend, but it’s depth and validity are a product of a methodology that limits the frequency of feedback. Most clients can’t wait six months or more for their next model to understand if the new campaign is working. We look for leading indicators in a fairly consistent set of areas; digital performance, social media or ‘share of’ more dynamic tracking measures like ad awareness, buzz or product perception scores.
Identifying, quantifying and tracking these relationships requires good agency analysts, working closely with agency and client planning teams, powered by shared access to key data in one place, making data integration and visualisation a key component of success.
Steve Richards, head of Data Strategy & Consulting, Wunderman Thompson UK
The most important metrics in effectiveness are 5 and 10, representing the 5% total marketing spend that should be devoted to measuring campaigns and the 10 per cent of your time and attention that should be invested in setting up and reviewing campaign effectiveness.
Each client needs to find the right metrics for their business goals, but once the investment (in terms of time and money) is agreed, there are four key approaches that need to be considered:
Benchmarking - Understand where you are now and how far you need to go to reach your goals.
Planning – Rigorous plans based on both historical results and forecasted performance, at a range of spend levels
Tests – Build tests into everything you do. Make campaigns smart enough that you can learn, and learn quickly, when something is in market
Reviews – Spend time on PCAs and annual econometrics reviews and take on board the learnings when returning to the next planning phase
Thomas Gwin, data strategy director, BBH London
At BBH, we want to celebrate the difference that the work makes for our clients and their customers. But we don’t believe in a silver bullet approach to effectiveness. And we certainly don’t have a tried and tested list of metrics that we deploy indiscriminately across campaigns.
The starting point for us is to set objectives considering commercial, brand, behaviour and media, and only then to identify which KPIs will allow us to prove effectiveness across those layers.
This approach requires an effectiveness culture, which forces us to develop measurement frameworks in advance of the campaigns we develop.
CTRs and engagement time naturally feature as measurement criteria alongside a very long list of metrics - including those more focused on longer-term communication effects on brand equity and the bottom line.
Where possible, we innovate and invest in new forms of measurement. For instance, we recently developed - together with Mediacom’s business science unit - a new concept called ‘Brandstock’. This helped us demonstrate for our 2022 IPA silver winning Tesco entry that a stronger brand has a direct financial value to the business.
In short, we are always looking for numbers, new and old, to demonstrate the value of creativity.
Kevin Fitzgibbon, director, Business Science, MediaCom UK
It is so important to align measurement metrics closely with a brand’s business objectives when measuring effectiveness. These metrics need to support the business’ unique KPIs, campaign objectives, and ultimately, the desired outcomes that will deliver on these.
There is a wealth of metric data available to us as marketeers. From media delivery data like reach, CTR, and dwell time, to softer metrics such as awareness and purchase intent. Brands need to focus on outcome-based metrics, and media’s contribution to driving these. Ultimately, those brands that focus on driving business outcomes such as sales/profit, upgrades and churn, and optimise towards these will outperform their competition.
However, click through rates, awareness levels, and dwell time can only tell us so much about the overall story of media performance. We need to take into account the consumer action that followed. This will provide clarity, centring in on the most meaningful data, and help us see the wood for the trees.
Long-term, a considered and consistent measurement framework is key to delivering consistent business success, and what is appropriate will vary – depending on where the brand sits in terms of their own measurement maturity. Brands at the beginning of their measurement journey will likely focus on different metrics compared to those brands with a well-established measurement agenda.
Matt Holt, chief strategy officer, Digitas UK
I doff my hat to all the winners of the IPA Effectiveness awards. They are notoriously hard to win – requiring (correctly) that the successful entries prove a strong link between advertising activity and commercial outcomes.
In an industry that's become obsessed with digital metrics this is no small feat. I have experienced the danger of falling into the "metrics trap". Just because we can measure something doesn’t mean we should.
We need to measure what matters and be driven by outcomes and impact for clients, rather than basing a relationship on outputs and inputs. Sure, engagement metrics are worth measuring as a means to an end, but not as the end itself, which is the commercial outcome - the impact on revenues, costs and profitability.
But is it sufficient to be solely focused on commercial impact? Is the term "effectiveness" broad enough and fit for purpose today and the conversations we need to have? At Digitas we talk about the future of effectiveness being about total effectiveness, widening the effectiveness lens beyond solely commercial impact to include societal (impact of products and services on communities), sustainable (the environment) and equitable (DE&I) too.
We need a new equation for effectiveness and therefore a new way to measure it – a dashboard that is geared towards measuring and achieving "total effectiveness", which brings together commercial, societal, sustainable and equitable impact into one place. This is a way to future proof effectiveness approaches for clients. A practical way of looking at the world that helps us to act outwardly rather than obsess inwardly.