We’ve all heard the saying, what gets measured gets improved, and that’s especially important in marketing. Measurement is critical because effective marketing requires us to know what’s working and what’s not.
The good news is that today, we can track the performance of our marketing efforts in more granular detail than ever before. We can monitor email open and click-through rates. We can deploy bots to notify us anytime our brand is mentioned online. We can track every action a visitor takes while on our website. And we can even see where a visitor’s visual attention is focused within a particular web page.
This is awesome, but it’s also given CFOs a false sense of what’s possible. As a result, many believe that it’s easy to determine exactly where a sale came from, so they make the wrong financial decisions based on incomplete or incorrect interpretation of analytical marketing data.
Marketers today are blessed. We have access to more actionable data than at any time in history. But at the same time, it’s not perfect. In fact, it’s not even exact. There are two reasons for this. The first is that when it comes to the execution of that tracking, most marketers fall flat.
But the bigger reason is that they are even worse at analyzing the data they did track.
I’m not going to address the first reason today because it’s a relatively straightforward issue to fix. You simply need to hire the right person or agency to properly configure the various analytic components for your business.
Instead, I’m going to address the second reason because this is a mindset shift that will have a far more profound impact on your business. Here’s the problem—because we can track so much marketing data, many CFOs, marketers, executives and entrepreneurs believe they can directly correlate an action to a sale.
Sometimes you can. But it’s rarely that simple.
For example, you could track an order from your ecommerce store to an organic search that drove the buyer to your website. That seems pretty straightforward, right? But it’s highly likely that prior to that search, the buyer may have seen a few of your social media posts. Maybe they heard the founder on a podcast, which led to the search. Or maybe they saw an article about the product online.
Often, that last action gets the credit for the conversion. This is called Last Interaction Attribution, also known as “last-click” or “last-touch,” and it’s what most marketers track. But there could have been countless other touchpoints leading up to that last action that made it possible.
There are several other attribution models, but here’s the bad news—they are all flawed in different ways. So should we just throw up our hands and start guessing? Of course not. That would be irrational. The solution is relatively simple, but it’s going to take some work. But that’s true of anything worth doing, right?
The approach we take here is multifaceted. You’ll want to start by tracking the effectiveness of each component of your marketing efforts. Start small, at the campaign level, and work your way up to the channel level. And in doing this, you must remember there will not always be a 1-to-1 correlation.
For example, a client once said to me, “I know you’re publishing all this awesome content on our website, our organic traffic is increasing, people in our industry are talking about and linking to us, and more people are buying our services than ever, but I can’t track a customer to a specific blog post.”
It doesn’t work that way. Unfortunately, measuring online marketing performance is never that straightforward, and it never will be. Sure, a particular blog post might directly result in new customers, but you may not be able to definitively track that for a variety of reasons.
At the same time, that blog post could help your website to rank for a new term that then drives a ton of new traffic. Or it could get the attention of a journalist who then writes a story about your company resulting in a wave of positive publicity. Or it could be shared by others on social media which then creates increased brand awareness and trust.
All these things can lead to tons of new business—and there is often no way to attribute that new business directly to that blog post. So, while we need to track data at the campaign level, we also have to look at how each campaign plays into other aspects of our marketing efforts and our business as a whole.
Here’s a great example. Same client as in the previous one. During a meeting, he discussed wanting to eliminate several revenue streams because a couple of others were exponentially more profitable than the others.
What he initially failed to see was the marketing that drove the less profitable revenue streams was not only what enabled his company to thrive, it was also what created the other, more profitable revenue streams in the first place.
These marketing efforts did more than just produce revenue. They also helped the company’s business development team close sales more quickly and efficiently. But more importantly, they elevated him and his company to be recognized authorities in his industry, which led to numerous speaking, partnership and media opportunities. The resulting revenue growth was astounding.
But there was a significant lag between effort and results because of the nature and size of these opportunities. And to make matters more complicated, much of it could not accurately be attributed to a particular campaign. It was a combination of campaigns working in synergy.
These benefits—financial and otherwise—would have gone largely unnoticed when looking purely at analytical data. You have to look at the bigger picture, which often requires relying on experience and intuition on top of the data.
Had he made a decision based on what the data seemed to say, he would have decimated his company’s revenue and undercut its position in the industry, a mistake he may not have recovered from. This means that while KPIs like ROAS (return on ad spend), click-through rates and ranking all matter, the bigger picture is even more important.
We have to treat marketing as individual components as well as holistically as a larger system of components. The latter is where your biggest wins are often hidden.