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What is causing the decline in the effectiveness of marketing measures and how can companies improve their models? Ian Gibbs of Data Stories Consulting and DMA reveals all.

If we don’t have true visibility into the effectiveness of marketing campaigns, the logical conclusion can only be that we are simply flying blind with our marketing spend, with no real idea of ​​what works and what doesn’t. does not work.

This leaves the impact of marketing to something akin to a game of roulette with no real scientific basis on which to gauge the drivers and inhibitors of campaign success. If you’re only measuring “vanity metrics,” then that’s what your marketing efforts are still meant to be: mere vanity projects that have no real impact on your brand or business.

Now in its second year, the Data & Marketing Association’s (DMA) Intelligent Marketing Database contains half a decade of effectiveness data, covering more than 1,000 campaigns from a range of industries and media channels. . Basically, the data bank is designed to answer two fundamental questions: A) How successful are marketers’ efforts in driving campaign impact? B) How successful are marketers in measuring effectiveness of their marketing efforts?

The industry needs to address two fundamental challenges posed by the two issues, namely:

  1. Marketers are still distorting their measurement plans by relying too heavily on campaign delivery metrics (such as reach and impressions) and vanity metrics (such as clicks and open rates) in evaluation post-campaign rather than true impact measures related to response, brand and commercial effects. 41% of the metrics used by marketers relate to campaign delivery metrics.
  2. Marketing effectiveness is in decline. After an initial increase in effectiveness at the start of the 2020 pandemic phase, the number of effects generated per campaign decreased by 23% in 2021. This picture holds true even when less meaningful campaign delivery metrics were excluded of analytics – that is, when focusing on measures of short-term response, brand building, or overall business effectiveness.

Declining marketing effectiveness
While there are various explanations for the decline in efficiency seen in 2021, a handful of driving factors can be identified.

Although the number of brand effects per campaign (e.g. brand awareness or brand consideration) increased slightly year over year, this was offset by a sharp drop in effectiveness response – i.e. brands’ ability to drive short-term sales, acquisitions, sign-ups, and the various types of metrics typically associated with “performance” marketing. The effectiveness of the response actually improved in 2020 as advertisers did more with less and did what they could to support their businesses in the face of the challenges of the first phase of the pandemic. A year later, however, it has not been possible to maintain this type of performance in the short term.

Before the pandemic, 44% of campaigns ran short-term (meaning up to three months). This number jumped to 53% in 2020 as businesses focused on short-term survival and remained so in 2021. Short-term campaigns accrue less impact than their mid- to long-term counterparts and, without longer term activity, overall efficiency decreased in 2021.

In 2021, the 45% of campaigns that had a pure customer acquisition objective was an all-time high in five years of data store effectiveness data. While customer retention is an essential tool in the marketing mix, a balanced approach to retention and acquisition is critical to long-term business growth, with acquisition campaigns seeing more impact overall. than loyalty campaigns only.

The last driver of efficiency decline is more difficult to prove, but it is worth discussing. As an industry, if we’re not getting the metrics right, are we optimizing future campaigns as effectively as possible? In the spirit of test and learn, campaign evaluation shouldn’t just be a tick box exercise. Along with standard media planning elements, performance marketing goals and, frankly, the unquantifiable experience of marketers, campaign evaluation should be a necessary part of future campaign plans rather than just justification. past expenses. While we believe in the mantra that “the more you measure, the bigger you grow”, poor campaign measurement can only have a long-term negative impact on overall marketing effectiveness.

Speak the language of the meeting room
Currently accounting for 41% of all effectiveness metrics used, marketers should avoid using simple campaign delivery metrics and vanity metrics when evaluating campaign success. Some of these metrics are useful in the planning phase of the campaign and are sometimes useful when optimizing between different digital creative elements. However, as true measures of campaign success, they mean little.

Instead, marketers should evaluate campaigns based on stated campaign goals, which may seem obvious, but for many it’s easier said than done. Response goals, such as sales, registrations, acquisitions, and leads, currently make up 36% of all metrics identified in the data store. Brand objectives such as awareness, consideration, and purchase intent make up 17% of metrics, and business metrics such as earnings growth, shareholder value, and market share make up 6% of metrics. Going forward, 100% of metrics should be focused on these three main metric groups.

In particular, the number of trade measures reported in 2021 has decreased. Sales metrics transcend the day-to-day language of the marketing team. They speak the language of the board and bridge the gap between CMO and CEO. At a time when consumer budgets are tight, it’s harder to get a campaign response. Marketing budgets are under more pressure than ever, so it will be vital for marketers to master the language of business metrics if they want to unlock more budget.

You are what you measure, so be sure to measure your business success, not vanity.

Ian Gibbs is Founder of Data Stories Consulting and Data Specialist for the Data & Marketing Association