Proving the value of marketing has taken centre stage
Marketers are increasingly accountable to their boards for their spend, and to justify it they need to be able to prove its short- and long-term effects.
In its new report, Forrester has revealed that proving the value of marketing to the C-suite is one of the biggest challenges marketers face into 2022: 71% of B2C executives indicated that demonstrating the value of marketing to the CEO, CFO and the board will be very – or extremely – challenging during the year ahead.
This isn’t a surprise. Increasing complexity and questions surrounding the amount and value of marketing spend existed pre-Covid, and consumer behaviour isn’t getting less complex any time soon. The last 18 months have also ripped up the rule book for many marketers already struggling to attribute value across the funnel.
We’ve seen existing channels evolve, new channels emerge, and consumer responses differ as context and external circumstances have changed. Online performance has plateaued as budgets have reduced, and with that a simultaneous inflation in digital media costs has occurred. Cookie tracking and data policies are impacting the ability to truly understand and link marketing efforts to sales across the customer journey.
But, however challenging, with the C-suite looking for a more complete picture of how marketing is helping to drive business growth, it’s critical that marketers understand how to link all efforts to real business impact to continue to secure investment – and direct it to best effect.
The long and the short of it
Forrester’s report emerges alongside the ongoing debate on balancing the role of short-term direct response activity and long-term brand-building. Increasingly, the tendency to use short-term online metrics as primary performance measures will have implications for long-term brand success, as Mark Ritson’s recent article warns, with brand building techniques historically more intangible to measure and challenging to link to conversion.
“If you look for returns from your marketing on a 12 month or shorter time scale, you will inevitably undervalue long-term brand building and move too much of your marketing investment into shorter-term tactical fare. This will result in superior ROI initially, but two very different stories will emerge over the next five years.”
Anyone involved in the complex world of multichannel campaign development and evaluation must have a clear understanding of how these effects and ROI differ. To be truly successful in modern marketing measurement and in refocusing mindsets on a holistic view of the funnel, there are three key considerations:
1. It’s imperative to treat brand and performance activities as one unified force for success
Gone are the days where siloed techniques produce success for brands. New trends and channels require different objectives. A full view of multiple channel insights is needed to enable smarter connections that demonstrate clear business impact. McKinsey talks about this as being the inevitable move to ‘full-funnel’ marketing – combining the powers of brand-building and performance-marketing channels using unified measurement, teams and metrics all aiming towards the same goals.
Each channel plays a different role across the customer journey, but all are interdependent to create an experience that encourages prospects to convert from consideration. Brand-building activity is essential to fill the top of the funnel and create new audiences, whilst performance marketing harvests that demand. Each can work alone but they have a more powerful and longer-term impact when used together.
Ecommerce retailer Furniture And Choice has adapted its strategy through advanced measurement and insight, combined with experiment-and-learn tactics, to ensure both brand and performance become more collaborative and codependent, enabling the brand to make more informed marketing investment decisions. We have seen that customers exposed to awareness-driving social activity touchpoints who went on to click a PPC ad were 25% more likely to convert.
Unifying brand and performance teams has provided impactful learnings – brand colleagues can add compelling stories to performance-oriented content and performance colleagues can help provide more specific targeting insights to brand engagement, to create a joined-up experience. Maintaining this synergy will continue to form a key part of Furniture And Choice’s future strategy to tap into key new audiences as the industry recovers from Covid.
2. Understand how touchpoints interrelate through the funnel to understand overall impact
Employing a unified approach to linking activity across the funnel is critical to demonstrate a 360-degree view of marketing effectiveness. If each stage can be tied to business results or more tangible metrics, a more immediate view can be gained on how to boost performance, beyond an understanding of brand equity earned through metrics such as lift studies and brand-tracking.
For example, when implementing brand-building activity, is a relationship with brand search observed? How can messaging be joined up, and does this result in a lower cost per click and increased digital conversions as a result?
Figuring out what relative influence touchpoints have on each other shows what to invest in and provides confidence that the investment will pay off. In this example, identifying how softer KPIs such as reach from a TV ad can link to actions more easily tied to business value, such as search and web visits, enables investment to be adjusted accordingly.
It’s also important not to shy away from employing test-and-learn techniques, traditionally used in performance marketing at the end of the funnel, in upper-funnel channels. Rapidly testing creative and content to optimise is highly effective. Regional testing, for example, can help understand and isolate increases in search and visits to understand the impact of launching new channels.
3. Stop looking back and start looking forward
If the pandemic has taught us anything, it’s that the past no longer looks like the future. Fundamental to the considerations here, it’s key that marketers understand how data science can be elevated within their businesses, prioritising the employment of new techniques, and adopting methodologies which help to predict the best future mix of messaging, channels and actions.
In Retail Week’s recent league table of Covid winners, Studio Retail ranked in the top five, following only digital-native businesses such as Ocado, AO.com, Farfetch and Boohoo, with sales jumping 39% in its half-year to 25 September. As part of a wider initiative at Studio to help unify the brand’s data sources, Jaywing‘s combined econometrics and attribution modelling is helping it to obtain a full view of performance and set longer-term budgets while making short-term, in-channel optimisations.
One example of this is working to move the reliance on print media by demonstrating the optimum number of direct mail touchpoints individuals should receive in one journey, after which no incremental value is gained and the investment becomes profit-diluting.
Smart marketers are running more controlled experiment-and-learn initiatives to prove what portion of performance spend truly drives incremental business outcomes, versus spend that is wasted. Data is the glue that bonds brand development and performance enhancement at a granular level across every marketing touchpoint, ensuring everyone is working from the same source. Put simply, the more astute marketers become with data, the more effective and valuable marketing becomes.
Accurate use of data and a more scientific approach to measurement and targeting, alongside an overall shift in organisational mindset, now needs to be central to marketers’ strategies. It’s critically important that the right measurement approach is chosen to support this, so that the impact of these strategies shows demonstrable business growth. Implementing measures to optimise activity, eliminate unprofitable investment and understand customers is no longer a choice but an unavoidable obligation for the future of business success – in 2021 and beyond.
Hanna Wade is marketing effectiveness director at Jaywing.
