Commentary

Advanced Measurement: Not Just For Enterprise Brands Anymore

Historically, most marketers have assumed that only companies with significant marketing budgets could afford moving to an advanced measurement approach without taking a hit to their bottom line.  But that’s not necessarily the case if companies are considering the bigger picture.

Let’s look at two examples of how firms with very different business models and marketing budgets are both using advanced measurement to improve their bottom line.                                        

Large B2C Company

The first example is a B2C brand with a significant total marketing budget of $100 million per year.  The company’s goal is to drive sales of its products, which cost the consumer $250 to purchase. The company is using an advanced platform that measures performance at a granular level across all of its channels to learn which marketing strategies are most effective at driving conversions. 

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By putting the platform’s optimization recommendations into market, the company is able to produce its projected revenues while using just 75% of its $100 million marketing budget for the year.  The remaining 25% -- $25 million in savings generated from media optimization -- easily justifies the cost and resources to implement an advanced measurement platform.

Small B2B Company

But what about a B2B company that allocates $3 million per year to its marketing budget?  This company charges $35,000 per year to its customers.  A 25% ROI on a $3 million budget is not as substantial as it was in the previous example to justify the cost of an advanced measurement platform. 

However, rather than only focusing on optimizing its marketing budget, this company also uses the platform to evaluate marketing’s impact on revenue.  Using a cross-channel measurement approach and putting optimization recommendations into market, even a 10% lift in conversions would result in $20 million in incremental revenue, making it clear that the investment in advanced measurement pays off.

ROI Isn’t Always About Cost Savings

Using advanced measurement isn’t just about finding ways to save marketing dollars.  In fact, focusing only on the potential savings of advanced measurement could potentially mean missing out on its real value. When used to inform a closed-loop marketing strategy, the insights produced can help to improve your company’s bottom line.

The rapid expansion of advertising technology has enabled more and more small- and mid-sized companies to buy media at scale to reach their target audiences.  However, it’s critical that these companies identify a single currency for measuring marketing effectiveness across all of their ad-tech platforms and media channels. 

This is especially important as media buying becomes increasingly fragmented across new technologies and tactics.  Smaller companies that can’t afford upfront TV buys can now buy digital video advertising.  And any size company can compete for paid search clicks through Google AdWords.

Identifying a single currency to measure and optimize across all platforms and channels will be the difference between maximizing every dollar from your marketing budget and blindly spending in each channel without any insight into how one impacts the other.

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