But despite the promise and the progress, many marketers still believe that measuring the value of their media spend across online, offline and mobile channels is complicated and challenging. Some marketers are so distrustful of their current measurement system that they fall back on price when making their media buying and optimization decisions. Others have bought into the myth that moving to more advanced measurement is too complex and disruptive to their organization’s workflow and structure, so have convinced themselves that their current methodologies are “good enough for now.”
In reality, the precision with which multichannel marketing performance can now be measured is unprecedented. As CEOs and CFOs continue to demand improved ROI accountability from marketers, adopting more advanced measurement techniques will become vital to optimize spending in 2014. Here are some compelling reasons why:
If you’re not measuring it, your competition is. Success is rapidly accelerating the adoption of advanced cross-channel measurement tools, driven in large part by the 15% to 35% average increases in media efficiency and ROI that brands are seeing as a result. In fact, the majority of Fortune 500 companies and many of the largest brands in insurance, financial services, banking and retail, among others, are taking advantage of the operational efficiencies and competitive advantages of advanced measurement. If you’re not quantifying the impact of every channel, campaign and tactic on your overall performance in order to improve planning and optimize spend, most likely your competition is.
The proliferation of social and mobile. Just like digital a decade or so ago, the proliferation of social media and mobile devices has forever changed the marketing landscape and how consumers find and connect with brands. For marketers, these marketing vehicles could appear to have solved the problem: huge reach and very precise targeting. But in practice, they raise a major conundrum. Even though these channels are highly measurable, marketers won’t be able to recognize their true value if they are using outdated measurement methodologies that prevent them from understanding the influence that social and mobile channels have on eventual conversions. Without a clear and accurate read on social and mobile's effectiveness, marketers will have an extremely hard time justifying the investment in these burgeoning channels.
Omni-channel is the new marketing mantra. Just as brands were getting accustomed to the concept of cross-channel marketing, along comes omni-channel, and a whole new set of challenges emerge. Omnichannel marketing isn’t about the number of channels on which you advertise, but instead how you can use each channel to create personalized, contextually relevant experiences for each individual who interacts with your brand. Advanced measurement tools play a foundational role in every omni-channel strategy, providing the ability not only to collect and manage massive amounts of marketing interaction data, but also to draw actionable insights from that data in order to deliver seamless, consistent experiences with your brand, at any time, and on whatever platform your customers and prospects use.
Competition for every single arbitrage dollar. Despite recognizing the inaccuracies, many marketers still feel comfortable justifying increases in spend based on rudimentary metrics like click-through rate, or on faulty measurement methodologies like last click. However, because these methods don’t account for the influence exerted between channels and tactics, marketers risk overspending in some areas, and/or under-spending in others. As Dan Ariely wrote in his book, “The Upside of Irrationality,” there are always arbitrage opportunities to benefit from the predictable irrationalities of average intelligence. Unless you measure before you cut, somebody may be eating your lunch -- without you knowing it.
2014 will bring more scrutiny of marketing budgets and more pressure for accountability than ever before. By adopting more advanced measurement tools, marketers can not only measure the impact of their marketing programs against the goals of their organization, but also justify their actions to their CEO and CFO.