The proverb ‘out of sight, out of mind’ is so relevant in today’s digital era, especially for brands and companies which want to connect with its audience in every way possible besides providing products and services. For these companies, from any segment, digital marketing has become the synonym of marketing in general. One of the key reasons is that digital marketing allows advertisers to measure every dollar spent. Yet, interestingly it is the only medium which lacks a common currency of measurement. “Data and measurement tools provide marketers with the necessary insights to make data-driven decisions, map customer journeys, optimise campaigns in real-time, and ultimately achieve better results in the highly dynamic and competitive field of marketing,” Ramya Parashar, COO, MiQ, said.
As per a report by marketing research firm Statista, digital advertising spending worldwide amounted to $522.5 billion in 2021. It is projected that the spending will reach $836 billion by 2026.
Role of data and measurement tools
Companies today are global, aggressive in seeking opportunities, and highly competitive. Technological advancements have made these companies reach more customers than ever before. In this race, marketers are always looking to fill unmet needs. For marketers, data and tools help analyse demographic, psychographic, and behavioural parameters to understand its target audience better, whereas, measurement tools help assess the effectiveness of past campaigns in reaching and engaging with the intended audience. These measurement tools or metrics help track and measure the ROI of marketing campaigns, enabling businesses to evaluate the profitability of their marketing efforts. Measurement tools provide attribution models to understand how different touchpoints contribute to conversions.
“In the ever-evolving landscape of marketing, data is the new currency. Marketing numbers and metrics help marketers measure the effectiveness of their campaigns and build prescriptive analytics to support the future course of actions,” Joy Nandi, senior VP and global head- Intelligent Data Services, Denave, expressed.
However, one cannot ignore the fact that digital is also that medium which lacks a common currency. Therefore the lack of a ‘common currency’ for a universally accepted standard for measuring and reporting metrics has led to the rise of many platforms including platform data such as Meta and Google beside other firms such as Comscore and Gartner. It is important to understand that the data in the marketing and advertising space often comes from diverse sources, including social media, websites, mobile applications, and traditional media. Marketing experts believe that integrating and standardising fragmented data from these sources is a complex task.
To be sure many digital platforms operate as such as Amazon Ads, Meta, Google also operate as ‘walled gardens’, meaning it controls access to user data and insights. And the lack of transparency to the system makes it difficult for marketers to have a comprehensive view of the entire customer journey.“The common reason why this void exists is that the key performance indicators (KPIs) and metrics used by marketers are not the same for every organisation, and this diversity complicates the setting up of a standardised measurement currency across the industry,” Delphin Varghese, co-founder and chief business officer, AdCounty Media, said.
Not to mention, metrics differ from channel to channel and platform to platform. This means that the KPIs used to evaluate performance across email marketing will not be the same as those deployed to assess the effectiveness of social media campaigns.
First-party data and the future
As concerns about data privacy grow, marketers are increasingly shifting to using first-party data for measurement. First-party data is data that is collected directly from customers, such as through website forms, email signups, and purchase history. According to a survey by Deloitte, 61% of high-growth companies are shifting to a first-party data strategy. This shift is expected to improve the accuracy and reliability of measurement metrics, as first-party data is more accurate and reliable than third-party data.
“As first-party data becomes more prevalent, the accuracy and reliability of measurement metrics are expected to improve, leading to more informed decision-making and successful marketing strategies. However, the rise of first-party data also means that there will be more wall gardens. This means that marketers will have to shift through numerous dashboards to get a complete picture of their campaigns,” Nandi opines.
It is believed that vanity metrics, which do not contribute to key organisational goals, can create a misleading impression of success. The interpretation of metrics is equally critical. If marketers misinterpret the data or fail to provide context, reports may give a skewed perception of success. For example, an increase in website traffic may not necessarily lead to more conversions if the traffic is not targeted. “Marketing efforts should ultimately contribute to revenue generation. By not providing a clear link between marketing activities and revenue outcomes, their impact on organisational goals may be unclear. Additionally, focusing excessively on tactical metrics, such as social media likes or website visits, without tying them to strategic goals like customer acquisition or brand loyalty, can lead to reports that look good but lack substance” Nandi advises.
Interestingly, it is believed that marketing is an iterative process which requires constant optimisation as its efforts often intersect with sales, customer service, and other departments.
“Marketing reports that seem promising on paper may falter in achieving organisational goals when they lack a human-centric approach. Often, these reports focus solely on surface-level metrics without delving into the nuanced behaviours and preferences of real people. To bridge the gap, marketers must humanise the data by considering the qualitative aspects, ensuring strategies resonate authentically with the audience. Failure to embrace the human element can result in campaigns that, despite looking impressive on reports, struggle to genuinely connect and fulfil the deeper organisational objectives,” Varghese said.
Optimal ROI?
The truth is that the sole purpose of marketing is to drive maximum ROI. Given all the data from reports or anything else, ultimately, every organisation needs bang for its bucks. From brand value to engagement to conversions – the purpose is clear. The effectiveness of marketing metrics in driving maximum ROI can vary depending on specific goals, industry, and nature of a business. Several key metrics are commonly recognised as valuable indicators when used in conjunction with each other. These metrics can provide a comprehensive understanding of a marketing campaign’s impact. Now, the question is which is the most genuine tool to measure one’s campaign’s success?
An early 2023 survey asked chief marketing officers (CMOs) across the United States on the metrics they measured the most often. About 70% chose sales and revenues. Digital, web, and/or mobile performance followed with nearly 56% , while 43% of respondents mentioned content engagement, as per a Statista report.
“It is a challenge for every marketer to judge and choose the most effective tool to know if a campaign is successful or not. We look at click-through rates as an important checkpoint to see how a campaign we’ve put out is doing. While we started with a product-led communication, advertisements today are largely created from the perspective of content and initiatives, because the consumers want to hear the narrative and the story behind the brand to create trust before picking us up,” Gautam Bhasin, head of brand, Only Earth, said.
Marketers further opined that closing the loop in the purchase journey is important when the consumer is in the final stages of purchase. For young brands, effective advertising, and not push-based advertising gets better numbers.
At the end of the day, the marketing ecosystem involves numerous players, including advertisers, agencies, publishers, and technology providers. Coordinating efforts and aligning interests to establish a common currency requires collaboration and consensus. “Efforts are underway to address some of these challenges through industry organisations, standard-setting bodies, and collaborations, among stakeholders, aim to improve transparency, standardise measurement practices, and establish benchmarks,” Parashar concluded.