The move shouldn’t come as a surprise to the industry. As the digital ecosystem has become more complex, both the crossover between sales and marketing, and the pressure on CMOs to demonstrate ROI, have grown. So for many businesses and brands, it makes sense for management of these closely related disciplines – and analysis of their business contribution – to be united.
Yet consolidating responsibility doesn’t make understanding the impact of media any easier. Many CMOs are still reliant on archaic metrics that don’t stand up to serious scrutiny or reflect the true importance of ad campaigns within wider business strategies.
To achieve better marketing and advertising accountability, advertisers must shift their focus from outdated proxy metrics to outcome-driven media evaluation.
Media and ad effectiveness is currently a salient issue for brands. After multiple brand safety and ad performance challenges, CMOs are more discerning about spend allocation. In 2017, for instance, P&G’s Marc Pritchard infamously pulled £200m from digital ad budgets, citing data that demonstrated the investment didn’t produce effective reach.
Today’s marketers are expected to multitask at even greater levels than before: distributing tighter budgets across a range of channels, while driving high returns and contributions to business success. Yet they often find doing so difficult because existing methods of evaluating media provide insufficient insight, leaving them unable to prove exactly how advertising helps build a brand and generate revenue. And the reason for this is that current approaches too often rely on simple proxy metrics, such as click-through rates (CTR).
In isolation, these metrics tell brands very little or can even be misleading. For instance, take a high-ticket item such as a sofa. Just because consumers choose to click on an ad promoting the sofa, it doesn’t automatically lead to a purchase; a click does not equal a sale.
Put simply, the media outcomes against which campaign success is evaluated must be directly aligned with overall business goals – whether that’s boosting brand awareness and perception, or driving sales and customer loyalty. Furthermore, metrics need to take the form of tangible KPIs that can be precisely tracked, such as cost per in-target reach, in-store footfall, cost per incremental site visitor, or straight up cost per sale.
Achieving this alignment with business objectives isn’t as challenging as it might sound. As well as more channels to juggle, rising digitalisation has also created vast behavioural, environmental, and contextual data sets that offer insight into consumer movement and responses. And thanks to advances in artificial intelligence, econometric, and attribution modelling this data can be harnessed and used to assess campaigns with custom metrics tailored specifically to a company’s marketing or business goals.
For an example of such data-fuelled activity, see this campaign for Ikea Indonesia. Ikea wanted to increase visitor numbers for its store outside the city centre, but was hampered by negative perceptions of the time and distance needed to reach the stores. So it decided to leverage geo-location data and real-time traffic conditions to deliver a campaign that targeted users within ads, and set outcomes-based goals: greater customer acquisition and increased footfall. The results speak for themselves; not only did the campaign drive a very high level of engagement, but people who saw the ad were 3x more likely to visit the Ikea store.
Today’s marketers have more to prove than ever and that pressure is even higher for those like McAlister who also steer the ship for sales. To illustrate the value of their efforts, they therefore need a new model that is outcome-driven, simple, and accountable. As long as media investment is guided by metrics that align with business goals, they should be able to stay on a course for real success – not the rocks.