By Lana Busignani, EVP, Global Analytics at Nielsen
Driving action may still be the ultimate aim for marketing campaigns, but the specific goals marketers must achieve keep shifting. Before COVID-19, many already faced increasing pressure to go beyond simply demonstrating reach for target audiences, instead of needing to provide more tangible results as the availability of advanced ROI measurement platforms and tools grew.
Now, standards for quantifiable outcomes are even higher. Despite positive expectations of the coming recovery — including growth for global ad spend in 2021 — the industry remains volatile and marketing investment is under close scrutiny. To effectively validate and enhance ROI, marketers must assess real actions rather than relying purely on basic metrics, such as click-through rates (CTRs). Achieving this will mean ensuring analysis produces robust and reliable insight by standardization, holistic and adding agility to their measurement approach.
The importance of standardisation
Cross-industry inconsistency has a major part to play in current measurement problems. With different organisations and departments using diverse metrics to evaluate performance, returns are wildly unequal and not comparable. As well as creating discord about what counts as the successful realisation of objectives, this variability makes it hard to effectively scale operations across media channels, campaigns, and the globe.
What’s required to address this issue is standardisation. By developing measurement built around standard metrics, marketers can guard against the challenges fuelled by differing perspectives and establish one shared language for ROI assessment that all can understand. For instance, implementing normalised metrics for campaign essentials such as brands, pricing, promotions and media channels will create a meaningful basis for comparison that helps resolve coverage gaps and inform accurate benchmarking. Such comparative insight is especially valuable for companies covering multiple regions given that the average ROI for every $1 spent varies significantly in each market around the world; with Nielsen data showing return rates range from $1.24 in North America to $0.81 in Europe.
Additionally, consistent measurement produces data that paves the way for a more unified marketing strategy; enabling alignment between teams, and with external advertisers and agencies. With all relevant parties ‘speaking the same data language’, this allows for the institutionalisation of tools that facilitate real-time, and highly valuable, business decisions. In a broader sense, our analysis reveals that brands working with standardised datasets can boost the effectiveness of multi-media spend by 70% more than those using varied data.
A holistic view of ROI
The crucial need for holistic oversight of marketing effectiveness isn’t new, but the difficulty in obtaining it continues to cost marketers, and their companies, dearly. Nielsen research has illustrated that failing to investigate all outcome drivers for a campaign can lead to an 80% higher median error rate with forecasting, which in turn leads to roughly 50% over-inflation of reported incremental outcomes and almost 70% ROI misattribution.
The reasons behind this ongoing challenge aren’t solely limited to the ever-growing complexity of tracking convoluted customer journeys. Another key cause is lack of access to the comprehensive information marketers need to trace the impact of various channels, tactics and techniques on final campaign outcomes and the business. In short, marketers are struggling with the incomplete data legacy of internal silos.
Overcoming barriers is therefore vital to enable better visibility and results. Long-standing divisions between outcome measurement and planning need to be removed; with smart technology harnessed to create a constant flow of data that can guide the planning cycle from start to finish. Marketers must also gain a fuller picture of overall performance by expanding measurement to include both upper-funnel awareness and bottom-line ROI metrics. The core advantage is that a balanced mix of metrics, such as reach and frequency, will allow them to secure greater long-term success.
Finally, it will be critical not to overlook the variable impact of marketing tactics by sector. Nielsen evaluation has also discovered that different influences can have a wide-ranging effect. For instance, short-term creative elements such as duration and copy quality are more influential in retail and tech, while long-term structural aspects such as brand size and equity have a greater impact in the auto industry. No matter what their focus, this means accounting for every possible performance factor is paramount to monitor and maximise ROI.
Remaining agile to optimise campaigns
Among the numerous lessons 2020 has taught marketers, the value of staying agile and connected to audiences is perhaps the most important. The organisations that have not only invested in advertising throughout the crisis but also continually adapted to the changing global situation and shifting customer needs are those seeing the greatest rewards. From here on, this nimbleness will be an integral part of the new marketing normal.
Using post-campaign evaluation to guide marketing decisions will no longer be sufficient to keep efforts relevant, resonant, and on track for optimal returns. Instead, marketers will need to harness current data about how activities are performing for in-the-moment adjustment and institutionalize the use of this measurement in internal tools to capture all available opportunities. Tapping real-time insights to decide what their next steps should be — from reallocating budgets to fine-tuning creative and recalibrating strategy — will allow marketers to remain versatile as new challenges arise and, crucially, persistently bolster ROI.
In a still fragile business environment, zero-based budgets are set to stick for some time, regardless of the budding recovery. For marketers, this will make efficient measurement essential to justify and increase investment, particularly as organisations look to streamline operations and cut costs. By designing well-integrated, holistic, and flexible measurement models that assess results from every angle, they can generate ongoing uplift in ROI, as well as quantifiable proof of the results their initiatives produce.