The Tyranny Of Marketing Success Metrics
As a child, I remember loving going to the circus with my grandfather – I have the vivid memory of an act by two clowns at the circus. The scene starts with the spotlight on a red clown on his knees going through the sand as if looking for something. A white clown walks by and asks him:
“What are you looking for?”
Red clown: “I lost my coin.”
White clown: “Do you need help finding it?”
Red clown: “Yes, that’d be great!”
[White clown goes on his knees and searches through the sand.]
A minute into it the fruitless search, the white clown asks:
“Are you sure you lost your coin here?”
Red clown: “No, I lost it over there!” [pointing to the other side of the stage]
[White clown gets up:]
“Why are we looking for it here then?!??”
Red clown: “Because that’s where the light is of course!”
I’m regularly reminded of this scene in my day-to-day life as we are all drawn to use the path of least resistance to solve problems, even before considering whether the possibility of success is at the end of the path we’re walking.
When it comes to marketing measurement
We can often wear the clown’s red nose without realizing it. We track data because we CAN rather than because we SHOULD; we even cater our actions and strategy to outcomes that are easily measurable, rather than do something because it is the right thing to do.
The most notorious example is the acute focus many have on the “last mile” of the marketing funnel, focusing on measurable conversions and sales from a nurture program (email marketing) or ad placements. Why? Because the ROI is seemingly very straight forward: invested x, sold y.
Here is the catch though. As Brian Solis eloquently put it recently, “Customers aren’t following the customer journey you designed because they’re too busy hacking it.”
The journey of a modern customer is anything but predictable or linear; it involves multiple touch points. The idea that someone buys because they clicked on a banner is both simplistic and flawed. They also read a blog post, bookmarked your product after searching on Google, read reviews by influencers, talked to friends. So, was the banner ad the nudge your buyer needed? Maybe… Can you draw the conclusion that because you earned $2 on a $1 spent in banner ads, your ROI is 100%? Hell no!
The Pay-Per-Tweet Flaw
In regards to influencer marketing, the same applies. The success of Klout – reward-for-mention/pay-per-tweet “influencer” practices – in the early days of influencer marketing was driven by practitioners pressured to demonstrate ROI and work within frameworks that were well understood.
It turns out that “influencers” eager to get paid quick in hard cash or perks to say good things about a brand they don’t truly endorse, don’t impact the bottom line nearly as much as influencers who have built a relationship with brands and are being genuine in their endorsement. Who would have guessed, right?
So, why did so many brands go the path of “paid influence” programs? Because the outcome is easy to measure…
We’re only starting to comprehend the complexity of marketing success metrics. A lot of smart people are working on building the practice, including our friends at AltmanVilandrie. The biggest disservice we can do to solving this issue is to simplify it to the point of becoming blind to it.
Then, shall we just give up on measurements and accept that marketing performance is too hard to quantify? Absolutely not.
Here is what we can and should all do when it comes to measurements:
- Assess the complete performance of your marketing mix. Today’s multi-channel, complex, and self directed customer journey killed marketing swim-lanes that served well for many decades. In fact, a Harvard Business Review “data analysis of one campaign revealed that swim-lane measurement grossly underestimated the revenues attributable to social-media marketing and display advertising while overestimating PR and paid-search revenue.” Every marketing department should measure the performance of their marketing mix, keep tuning and changing it, introduce new elements, expand those that improve the results of the outcomes, and stop those that underperform.
- While you can’t always figure out how much money you generated vs. how much you spent, you can (and should) define key performance indicators (KPIs) for each element of the mix and each campaign. You will need to find proxy metrics that you can track as good approximations of your goals, and measure your relative performance. i.e. are we doing better than yesterday? Some of the most impactful marketing initiatives may not tie to a dollar amount.
Influencer marketing is complex. It touches on every aspect of marketing and beyond. When done properly, its impact on a brand’s performance can be massive. Unless you are like us, and every marketing $ is invested in influencer marketing (we like eating our own dog food), you won’t be able to carve out influencer marketing to give it a reliable ROI. However, you can set up proper KPIs for it, and measure how influencer marketing affects the cost and outcome of your marketing mix.
I believe in embracing the complexity of marketing success metrics instead of rejecting it; I believe in doing the right thing, rather than doing the easy thing, when it comes to the practice of influencer marketing. Marketing is in the midst of a fundamental transformation we want to help accelerate, not slow down.
Who’s joining us on this journey?