I’m not a handy guy, but I know how to use a tape measure. If I use the tape measure to figure out the height of my fence, I can determine the value of my house, right? Well, no, of course not. Yet when it comes to measuring the effectiveness of marketing, we often make these kinds of leaps. We look at some arbitrary measurement – like page views or downloads – and try to link it to a return on investment. In the latest episode of Marketing Makers – the series for those who make marketing work, I delve into the sometimes-mystifying process of measuring the return on investment for marketing – and, more specifically, the content that feeds the marketing machine. I walk you through the art and science of putting together all those arbitrary numbers to tell a story about helping business performance.
Why is marketing measurement so hard?
The Management of Marketing Costs, written in 1948 by James Culliton, introduced many ideas of the marketing mix, which I talked about in the first episode of Marketing Makers. I love this book, in part, because of Culliton’s introduction. In the foreword, he writes:
Set a goal. The goal represents the investment value achieved by a shared purpose. It will be something like “Drive $10,000 in new revenue this year.”
List your key performance indicators. The agreed-on aggregate measurements are the standard for assessing progress. Depending on your goal, these might be average conversion rates, number of leads, quality of leads, revenue per new customer, or another measurement. Decide how often to review the KPIs to see if you need to course-correct. It might be monthly, weekly, or daily depending on the timing you set for achieving the goal.
Agree on metrics. Metrics are more granular measurements of things that may help you achieve or optimize any of your KPIs. Think of these as the “what-needs-to-be-true” numbers to optimize your KPIs.
Do you need more traffic to reach your goal? Do you need more conversions from existing traffic? Almost certainly. Do you need better content? Do you need to test the creative? Do you need to try different paid media? Do you need to spend less money on PR? List out all the things that you will track. This approach gives you a very organized and discrete set of measurements to help you measure progress toward your specific goal. Then, you can assemble a measurement pyramid for each goal of your marketing or content team. The pyramid below shows four goals – two campaign goals (a 10% increase in qualified leads and a 20% increase in lead form fills in a year) and two contribution goals (a 10% increase in addressable reach and a 10% decrease in content costs.) The KPIs that show progress to those goals are subscribers, A-level subscribers, lead-form fills, conversion rates by campaign, engagement rates of subscribers vs. general traffic. The metrics to watch because they affect the KPIs are likes/followers, sharing, traffic, time on site, cost of content production by platform, cost of traffic, and SEO rankings.
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What’s next? Measuring intent
What can we expect for marketing measurement in the future? One thing that won't change is the need to understand what matters for your business so you can focus on measuring and refining based on what you find. Lately CEO Kate Bradley Chernis explains how her team measures what matters in this segment of the episode.
So, what is changing? For one thing, artificial intelligence will be used more and more to process the mountains of data generated by digital content consumption. In most cases, this measurement is used to understand who is entering our spheres of influence – and the intent they have while there. The idea of intent data is to identify who should be targeted with specific campaigns and when. For example, many companies use a website visit as a trigger to retarget the visitor with ads. Technology exists to track what visitors do on the website and target only those people who took an action you defined as showing purchase intent. Intent data goes into decisions about showing specific visitors a different ad or no ad at all based on the actions they took or didn’t take.
There will be many artificial intelligence and algorithmic ways to measure marketing in the years ahead. Remember, though, you don’t have to measure everything just because you can. Set the standards for measuring success and make sure to get agreement to measure progress toward something important. Don’t fall into the trap of making things matter because they’re measurable. Make them measurable because they matter.
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Cover image by Joseph Kalinowski/Content Marketing Institute
