One of the questions we’ve heard most over the last 5 years is the challenge of return on investment. The old adage goes 50% of marketing is working, 50% isn’t, the only problem is we don’t know which 50% and unfortunately for some this has never been truer. In this article we’ll break this down and propose a simple approach we’ve been using successfully to plan in this ever changing world.
The key challenge is comparability of outputs, in the Digital world we have all the measures ever created, facebook for instance gives over 7 different video view through rate statistics from which to choose. Then TV struggles to give view through rates though at the same time TV doesn’t have the dreaded none human viewers… though have you ever considered the kettle might be a none human viewer?
The best approach we have seen to measuring performance is simplicity. At the end of the day great marketing is remembered and drives top of mind awareness of the brand, and eventual purchase.
At the Strategy Barn we have worked over the last 8 years to develop the simplest but most effective return on investment dashboards. These enable brands to look by channel at any point in time and understand how well their marketing is working. The key is the consistency of measures.
- Sales – is there a measureable way of determining a sales uplift from this channel or activity? If not what proxies can we use from other studies. If not what role is it playing, and how does that role eventually make money?
- Brand tracking – This has been and always will be our number 2 measure for performance. The reason being it gives consistency in our approach. Fundamentally when this activity was happening did a measureable change in top of mind awareness happen for the brand? Did it drive key equities that are researched and evidenced to show increases in sales?
- Quality metrics – This is where you start getting into channel specific data, so for instance on facebook it would be % of completed views for a video. This tells us how interesting our marketing is to our audience and gives us a clue as to whether to look at brand tracking. If the facebook video with 5 million views only has a 1% view through rate then it is very unlikely to have moved brand tracking. Any sales lift will be a correlation, not causation.
- Quantity of quality metrics – Bit of a tongue twister but essentially this is to say how many of a proven quality engagement have you had? For instance in our facebook example how many % views have you had?
- ROI proxies – This is the key element. For each channel there should be a reason you are doing it for. Using a proven study as a proxy is a good way of ensuring you are planning your media plans correctly.
So these are our key five, as you can see a simple approach which we’ve found works well to make decisions against. We’ve tried multiple routes but keeping it simple at a high level on an ongoing basis means you can make good decisions quickly.
If you are interested in understanding more about how we could help with creating a simple model for even the most complex marketing business then get in contact.