Are you not taken seriously by your finance director? Dismissed as the "creative" who has lunches with agencies and left out of key strategic decisions? Ever feel like it’s hard to ever get the budget you need to do the job? Have fun made out of your black polo-neck/jacket combo?
Measuring your marketing could be the answer to your problems. OK, the first three: the black polo neck you should just keep for evenings at thought-provoking existentialist theatre in Islington.
Measuring your marketing allows you to calculate the impact that your marketing activity has on the profitability of the business your work for in the short-term, and in the long-term.
At its most complex, it involves hard-core econometric modelling everything that you and your competitors do.
However, everyone can measure their marketing in some shape or form, and build towards an objective where you have a very detailed understanding of your contribution to the success of the business. It’s better than going a bit Soho isn’t it?
Why measure your marketing?
- It drives the success of your company. If you know what works best, you can do more of it, and that will help you get a competitive edge
- It helps with the optimisation of marketing. If you can find variations in performance of certain campaigns e.g. between two banner ads, you can understand what is working with consumers. This will improve the ROI you generate for the company.
- It helps you win the respect of your peers and managers. By showing people the depth of you knowledge about marketing, they will trust your judgement more
- It can help you get more budget. If you can show that certain types of activity are profitable (search is a great example) then you can get easily campaign for more marketing budget
- How do you measure your marketing?
Simple ROI calculations
Ultimately, what you are trying to determine is the impact that your marketing has on profit. With a great deal of marketing activity (more than you think) this is very easy to calculate. With brand marketing, it is more complex.
A good way to start measuring is look at activities which are meant to drive sales in the short term, such as point of sale, online marketing and sales promotions. You can quite easily determine the profit by looking at your sales up-lift, cost of promotion and the marginal profit on each unit.
Is the gold standard of marketing measurement. Many media agencies, such as OMD Metrics offer this as part of their service. At it’s best modelling can provide an exact prediction of ROI for every part of your marketing mix.
However, they are expensive and time-consuming. A huge amount of data, including your sales, has to be disclosed. It will probably take at least a year of collecting detailed information before your model become useful. Unless you are spending significant (£3 million +) on advertising, it probably isn’t worth it.
Brand Equity Measurement
Investments in advertising will rarely pay back in the short-term. If you can’t afford or be bothered with an econometric model, you should at least be measuring your brand equity. Which part of your brand equity you think is important is up to you, but common measures are:
- Total awareness vs competitors
- Spontaneous awareness vs competitors
- Likelihood to try
- Net recommender
- Other measures specific to your sector
- You can then put all of the information you can gather into a marketing scorecard, a handy way of presenting it to your managers.