Marketing by (the right) numbers

Marketing by (the right) numbers

Marketing has always been about numbers. Sadly, in the past, the quest was for figures to justify headcount and the expense of media campaigns. B2C marketers with big budgets might have been able to show that increased spending produced more sales, but it is always difficult to prove that the same couldn’t have been achieved with less. Or a different approach might have produced a better return. B2B marketers, meanwhile, have often been subservient to the sales team, who claim the credit for all revenue and see the marketing team as their back-up resource, creating content and organising the occasional event.

 

Thankfully, those dark ages are behind us. Most marketers don’t collect data to justify their job, they gather it to do their job. And it’s paying off. In the recent Econsultancy State of Digital Marketing report, commissioned by Marketo, almost half of company respondents in Australia and New Zealand said their marketing budget was up this year on last, and for a third it has increased by more than 30 percent. Not bad in an economy where business confidence has been a little shaky.

Much of the increase in marketing spend comes from further investment in earned media (social and content marketing) and owned media (managing your own digital properties). Meanwhile 14 percent of agencies indicated that their clients’ spend on paid media, such as advertising, was on the slide. The shift to digital, and the accountability it provides through measurability, is helping to drive this overall increase in marketing spend.

Misplaced priorities?
There’s a risk, though, that marketers could be investing in approaches that are easier to track, like digital, without being fully sure that they are the most effective. For example, in 2012, when the Econsultancy report was first compiled, 83 percent of marketers considered increased traffic to a website to be a meaningful measure of marketing effectiveness. Yet, as a standalone measure it is pretty useless, unless it is related to follow-through activities that will ultimately lead to sales.

Driving more traffic to a bad website, for example, could actually damage your brand and reduce sales. So, how can it be seen as a significant top line measure of marketing effectiveness? Thankfully, the proportion of marketers seeing it as such has dropped, but at 61 percent it’s still seen as a key measure by the majority of Australian and New Zealand marketers.

Measuring outcomes
Website visits, just like open and click rates, are activity based measures that contribute to outcomes. It’s the outcomes that marketers should really be caring about – new sales, churn, market share, lifetime value and brand equity. These are the kind of figures that would make their way into the exec team’s dashboard, alongside the other key metrics involved in running a business, such as P&L, gross margin and the status of key projects.

Yet marketers seem to be shying away from harder measures. The proportion seeing increased sales as a key metric has decreased, from 76 percent in the 2012 Econsultancy report, to 65 percent in 2015. Brand recognition as a measure has also fallen, from a high of 59 percent in 2013, to 38 percent in this year’s survey. Similarly, brand reputation, seen as important by 49 percent of respondents in 2012, was given by just 30 percent this time around. Yet brand equity is a key influence on the future propensity to drive sales.

It could be that the availability of so much new data is making marketers lose sight of what really counts. Most know how to track progress through a digital channel - measuring keywords, open rates, click-thrus, call to action responses – but, perhaps they are losing sight of those top line measures that the rest of the business cares about. For a B2B business, the number of marketing qualified leads is an important measure, plus the rate of conversions. They both directly equate to sales volumes and a reliable pipeline can help forecast future business.

Or perhaps it’s an indication that marketing is still seen as a subservient role in many companies, that has no influence on the strategic direction of a company. Australia and New Zealand are both small markets, and we do suffer the ‘branch office syndrome’, where local teams simply promote products shipped in from overseas. ‘Getting the word out there’ is the extent of marketing thinking, in which case, ‘getting more people to the website’ could be seen as mission accomplished.

Yet, technology extends the capability for marketers. The focus can shift to getting the word out, to the right people, who contribute the highest lifetime value, with the highest return on investment. Then, of course, nurturing the prospects throughout the sales journey, until they are ready to buy, and beyond that, to reduce the likelihood of churn and encourage increased spend on new or alternative products.

Times are changing
The Econsultancy report highlights how marketers see change happening. When asked which skills are important for a successful marketer in the digital age, 61 percent gave business strategy as their first choice. Almost a third put data and optimisation (quantitative analysis and segmentation) in second place.

Technology and process were two other options, but they ranked low in the order of responses. That’s actually good thing. It shows marketers understand that technology, though important, will always be the tool that helps achieve strategic goals. Marketers need to be business savvy first and foremost, then use automation and big data to implement their strategy. It’s up to the technology companies to ensure their solution is easy to use, so marketers can quickly reach their goals.

The only question is, how many marketers have a clear idea of what those goals are, and how many are focusing too much time attaching accountability to activity-based measures that tell you little when treated in isolation.

It’s a golden age for marketers. Digital capabilities provide a greater view of customer behaviour than ever before, making it possible to tailor messages based on the characteristics of individuals and how they are interacting with your business. It would be a shame to see some wasting the power of these tools without a carefully laid out plan and a thorough understanding of what they want to achieve.

Digital and demographics – a marriage made in heav...
The Inevitability of Ad-Blocking (And Things We Ca...

Related Posts

 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Thursday, 20 June 2019

Captcha Image