Unlocking Data and Metrics to Maximize Digital Advertising ROI
In a remarkably short time, digital marketing (and advertising) has grown from an emerging practice to a mandatory, vital way to connect with consumers. But in this new, data-driven world, companies struggle to organize around new ways to get the most value for their spend.
In the past decade, digital advertising growth has been nothing short of phenomenal. Last year, digital crossed a major milestone, accounting for half of all ad spending. But spend is only one measure of growth; value is quite another. In a related article, “Ad Vantage Points: 4 Digital Advertising Risks, and Ways to Safeguard Brand Reputation,” we addressed advertising issues that put brands at reputational risk. Ensuring ample rewards, however, from these digital-channel investments, requires new approaches to managing the ad spend and related internal alignment.
Here are a few common issues, along with our experience-based solutions:
Failure to close the sales-marketing loop.
An impressive martech stack and hip branding on social won’t guarantee that sales and marketing objectives are achieved. In this social media-driven age, businesses are often overly consumed with brief sentiment-shifts in small customer samples, only to lose sight of the bottom-line goal. An over-dependence on technology to catch important signals can create atrophy in a company’s closed-loop marketing process, limiting active data engagement and team collaboration. This calls for more symbiotic relations and productive interactions between sales and marketing teams.
Solution: Leverage both sales and marketing data to uncover meaningful insights.
Collaborative data analysis is the key that unlocks the dividing doors. Businesses that aren’t doing so already should begin conducting regular attribution assessments that aim to uncover important risks and opportunities related to cost-effectiveness, funnel influence and other attributes that support vital measures, such as return on ad spend and cost per lead. Sales and marketing systems should be connected to perform this across both owned and paid channels. Marketing can more effectively close the loop with the sales team’s insights through this attribution data, including where ads are placed and how they align with different stages of the sales funnel. It’s vital that organizations use a data management platform that unites all these components, allowing users to overlay ad data with the company’s own first-party data — that is, the reliable data that it’s gathered on its own customers.
Sales and marketing technology do not mesh well with the company’s data and systems.
A tech solution’s plumbing is more important than its user experience (UX) aesthetics — that cool new point solution won’t do much good if it can’t pull useful data from existing systems. Within the system, aligning company data with third-party data is always a challenge, as is ensuring that the martech stack talks seamlessly to the adtech stack. Improper integration can result in competing tactics, such as sending the same message repeatedly to the same consumer through multiple channels, which in turn can limit return on investment (ROI) and customer loyalty — especially if the recipient of these multiple messages is an existing customer.
Solution: Use data and systems to better understand customers and the customer experience.
To this end, data governance is more important than ever. In fact, in a recent Forrester Consulting study, data quality was the most frequently mentioned barrier to data modernization. When a business onboards new advertising and marketing technologies, thorough data integration is essential. Proper data and customer lists help ease the development of a media strategy (i.e., who, what, when, where and how) to run customer engagement programs. Companies can craft a stronger customer experience for their brand by continually optimizing the data, systems and business processes that affect a customer’s journey. To reduce the effort (and thus the costs) needed to find the needle in the haystack, businesses can:
Create affinity segments based on likes and dislikes
Identify in-market customers based on their visited sites and information needs
Identify potential customers based on shared interests
Remarket to customers who have actively sought out the brand
KPI measurements miss critical cues.
Companies that over-rely on clicks or conversions as key performance indicators (KPIs) simply are not adequately measuring campaign success, maximizing ROI, or ensuring that ads reach the right audiences at the right time. When all a company sees is a visitor click, it’s nearly impossible to understand if the visitor is part of the target audience, for example, or what actions they took before or after that click. Navigating the myriad KPIs to determine the right ones to measure can be difficult.
Solution: Capture KPIs that strategically align with maximum ROI.
Companies must align their KPIs with the funnel stage that they want to affect. This includes a multi-faceted approach to translating marketing objectives into simple, well-defined metrics. As noted above, merely looking at marketing-qualified leads as a metric, absent alignment with their conversion into sales, or simply studying sales-qualified leads without the benefit of attribution, will result in a uni-dimensional view of the entire marketing cycle. To create an ROI-based spend model, it’s critical to align these metrics across the sales funnel and customer journey.
The explosive growth of digital marketing and advertising has inevitably created new risk and uncertainty. However, by addressing these challenges, brands can identify new opportunities to connect with consumers before, during and after the moment of purchase. Organizations that sweat the details and seize these opportunities will turn their actions into higher results.