Guidebook to Marketing Analytics that Matter
Marketing is essential for businesses to thrive. From social media and content marketing to website personalization, customer engagement is vital for a healthy brand to develop and grow. Making strategic marketing decisions based on data-driven metrics will increase conversion, engagement, and lead generation.
Typically cultivated by a company’s chief marketing officer (CMO), compiling, managing, and measuring marketing efforts and performance to optimize effectiveness is key. Through gathered metrics and given formulas, CMOs become more efficient at employing tactics that work for a company and minimize wasted online marketing dollars.
To be vital in today’s industry, CMOs must adapt as the market fluctuates. The expectations of a marketer are evolving as platforms and media expand. Recently, a Deloitte report proposed five new expectations current CMOs must embody in order to become top-tier marketers:
1. Take on top-line growth
2. Own the customer experience
3. Dig into data-based insights
4. Operate in real-time
5. Master metrics that matter
Although most of the listed attributes require a keen understanding of quantifiable and data-driven concepts, the ability to master meaningful metrics is arguably most important. Without the metrics that matter, marketers are unable to grow the top line, influence the customer experience, or make the real-time decisions that often define a brand.
According to HBR, customer acquisition represents 36.6% of how companies are using marketing analytics.
What and How to Measure
Metrics that matter to core brand-building are differentiated in fundamental groups that gather and assess particular data points. These analytics provide the critical information that allows marketers to understand how well – and in what ways – their marketing plan is working. These groups include:
Top-level metrics: Return on marketing objectives (ROMO) and return on investment (ROI).
Funnel effectiveness metrics: Awareness, engagement, engagement rates, outcomes & conversion rates.
Funnel efficiency metrics: Cost per impression, cost per engagement and cost per outcome.
Paid, owned and earned media metrics and comparison ratios.
Each group contains formulas to gather metrics specific to a company’s goals, means, and overall effectiveness.
Brand value is determined by calculating return on marketing objectives via costs and returns over time. ROMO varies based on business and is usually expressed in units of time.
[return – cost] / [cost]
Return on marketing investments requires the marketer to define what constitutes a return, and then stack-rank programs and channels to determine the best tactic moving forward.
Funnel Effectiveness Metrics
The first stage of the buyer’s journey, awareness calculates the number of people reached by a brand or message. They are tracked by program, campaign, product, customer type, etc.
[sum of total engagements (weighted or not)]
Considered a middle-of-the-funnel metric, engagement tracks whether the company’s target audience is taking action and in what way. This simple sum can be measured in likes, clicks, opens, saves, etc.
[engagement] / [impressions]
Engagement rates quantify the success of impressions to actionable engagements. The metric provides means to measure a campaign’s effectiveness.
[lead volume, customers acquired, sales revenue]
The final stage of the funnel metrics, outcomes help establish a baseline for future company sales goals while quantifying driven business results.
[outcomes] / [impressions]
[outcomes] / [engagement]
These metrics reveal how well a marketing campaign is moving customers from brand awareness or engagement to defined outcomes. Conversion rates can help diagnose campaign issues by isolating funnel components.
Funnel Efficiency Metrics
Cost per Impression
[spend] / [impression]
CPM is necessary to determine both ROI and channel-mix decisions. It determines how costly channels are for generating brand awareness.
Cost per Engagement
[spend] / [engagement]
This metric assesses how cost effective a campaign is while producing engagement.
Cost per Outcome
[spend] / [outcome volume]
Foundational to channel-mix decisions, cost per outcome determines the overall cost per lead; it is essentially a glimpse at general profitability.
Paid, Owned and Earned Media Metrics
The owned and earned media metric group requires additional insight. The paid media includes media businesses must buy to use, such as online banners, text ads, and radio and television spots; the data is usually measured in volume of impressions. Owned media is defined as content consumed on sites and communities already purchased and owned by the company. This is measured in visits or page views. Lastly, earned media is defined as free media received by word-of-mouth consumers on properties such as Facebook, Twitter, and Pinterest. These metrics are measured in likes, retweets, pins, etc.
Paid-to-Owned Media Ratio
[owned media impressions] / [paid media impressions]
Paid-to-Owned showcases how effective paid media is at acquiring owned impressions. It’s an essential metric for evaluating marketing campaigns for products that customers greatly consider before buying.
Paid-to-Earned Media Ratio
[earned media impressions] / [paid media impressions]
This metric measures the effectiveness of paid media generated from word-of-mouth or free impressions. It can be used as a baseline for creative teams or future development.
Owned-to-Earned Media Ratio
[earned media impressions] / [owned media impressions]
The owned-to-earned ratio evaluates buzz for products and programs on owned properties. They compare effectiveness of campaigns against each other.
The Upward Advantage
To create marketing solutions while identifying key metrics tailored to your business, Upward Commerce proudly offers an innovative team of experts from the tech, retail, and branding industries. Our unique boutique consultancy capitalizes on marketing analytics that matter by providing strategic and hands-on guidance for a more efficient marketing, technology, merchandising, and operations strategy.
Gathering marketing metrics is fundamental when defining a business based on customer engagement, budget allocation, and organizational skills. Upward Commerce assists eCommerce companies by driving digital growth based on gathered metrics. In today’s omnichannel online industry, Upward Commerce is dedicated to helping clients acquire, convert, and retain more customers than ever before.