Return on Investment (ROI), or the way in which we measure actual dollar value of a marketing investment, has undergone some dramatic changes in recent years and it’s not always a straightforward concept.
Good marketing, and the work that goes into building strong brands, can involve many moving parts and often these areas of design, creativity and branding aren’t as quantifiable as some of the more recent digital and performance marketing activities we have become accustomed to.
Unfortunately, there’s no simple equation where we can demonstrate with any certainty that to invest a sum of money in the short-term, will guarantee an immediate dollar return.
Marketing isn’t static, we’re constantly evolving our thinking to develop new answers to marketing challenges and come up with unique solutions to grow, nurture and differentiate brands. It’s this kind of Design Thinking and Brand Building that helps create long-term, authentic and valuable brands.
While our marketing adapts and we continue to create new ways in which to cut through the noise, we also need to shift the ways in which we measure our performance and the expectations we have around short and long-term results.
Out with the old….
Once upon a time TV, radio and print media were the primary vehicles for reaching our audience and advertising our brands. We used somewhat of a one-size-fits-all approach to create advertisements with mass appeal and hope that these would engage a large enough group to translate into actual sales.
We took a stab at measuring the success of such campaigns using reach, frequency, and even some qualitative surveys and real-person focus group studies to understand audience sentiment.
It wasn’t an exact science but we had some level of understanding whether our campaigns were a success or not. Sure, there were lots of reasons and motivations behind why people would purchase a product, but there were only a few channels in which an audience could engage with to receive marketing messages and be exposed to brands.
It was a relatively simple landscape in comparison to today, where the focus of our campaign success or failure was reliant on understanding performance across a select few channels.
In with the new!
Then along came digital. With it, a tech-savvy millennial generation of approximately 2 billion people or 27% of the total global population, who grew up in the digital world and represented a shift away from TV & print, to online.
This group now entering their adulthood, also happen to be one of the world’s most important audiences in terms of consumer spending. With some 90% of millennials consulting online product reviews prior to making a purchase, we can see why capturing some of their online attention is so important.
As more and more consumer eyeballs moved online, so too did marketing budgets and investment. Digital activity was seen as a saviour of sorts. The abundant analytics now available to marketers could track the effectiveness of each and every advertisement providing accurate, quantifiable results back to the business. We had the potential in many instances to track the customer journey like never before, from the very first point of exposure, through the marketing funnel, right to the resulting sale. Marketers could now show in their P&L’s the dollar for dollar return that each and every brand message was achieving in sales or conversions.
Understandably marketers became more and more accountable for every single dollar spent. Business’s too came to expect that every activity, no matter how small or large, showed a justifiable return.
This is how marketing as a practice started to became slightly obsessive about Performance Marketing, with the less quantifiable Brand Building and storytelling elements of marketing becoming lower priority.
We talk more about the different marketing concepts, including Performance Marketing here. Essentially, it’s a form of paid online advertising designed to achieve specific, measurable results such as clicks or conversions. Marketers can then track and monitor real time campaign performance, making it easy to adjust and optimise campaigns, hence the term Performance Marketing.
But it’s complicated….
As the digital landscape evolves, the ways in which our audiences consume content has changed as have the ways in which they shop online. With the myriad of options and choices in how to consume content and the platforms from which we access it, consumers are bombarded with millions of messages every minute of the day. Brands are having to battle it out for even the smallest piece of attention and chance to earn a place in a consumer’s consideration set. For context, in just 1 single minute of the day online, a mere 60 seconds, there will be 4.2 million google searches 510k comments made on Facebook, and 4.1k sponsored Instagram posts.
With so much distraction and brand noise, the consumer purchase journey has also become harder than ever to track. When we look at all the ways a customer is exposed to a message and how they engage, think and feel about a brand, it’s anything but straightforward.
In fact, Google recently conducted a study of over 46,000 shoppers, with 73% of them using multiple channels to shop every purchase they made, the conclusion made was that the way ‘modern customers purchases are converted is a complex journey with multiple touchpoints along the way’, they’re resulting conclusion was ‘it’s complicated…!’
If I can’t measure it why do it?
While Digital e.g.: Performance Marketing became king, unfortunately the Branding that underpinned and connected these online touchpoints, for many businesses has taken a bit of a back seat.
What many overlook in their marketing activity, is the more qualitative area of Brand Building that sets up a business for long term success. Strong brands have greater longevity, customer loyalty, retention, recognition and business success. A brand with strong equity needs be carefully planned, thought out, and considered. A strong brand will understand who you are, how you are different from competitors and how to develop an emotional connection with your consumers. Successful brands need to stand out from the pack, being visually unique, with its own language and design cues. Most importantly, successful brands need to be connected across all touchpoints and telling the same story whether it be on TV, in print, on social media, through paid advertising or SEO.
A brand can hold a special place in a consumer’s heart, it can make them think and feel a certain way. People are motivated to purchase or engage with particular brands they value and feel connected to.
While most businesses can accept that some form of brand building needs to happen, they can also accept that marketing, particularly digital, has evolved and become a dynamic, ever-changing space to navigate. But for some reason, the thinking around measurement and ROI hasn’t yet shifted to match this changing consumer and marketing environment.
Many businesses want to know, if I can’t see the financial results why would I do it? And fair enough. No one wants to see their hard-earned dollars wasted. With so many touchpoints and so many aspects of brand building, how do you know if your marketing is actually working? How can we quantify a person’s thoughts, feelings, and behaviours about your brand? How can we quantify what is essentially a qualitative service?
The best brands think creatively to design strategies that make them stand out and become valuable to their consumers. We can also extend this creative thinking from the brand building and strategy, to the measurement and understanding of ROI.
We can move beyond the sole focus on ‘execution oriented’ metrics of performance marketing, and adopt more creative and wholistic approach to measuring ROI. This might look different for each brand who each face unique challenges, therefore needing bespoke tools of measurement to reflect these differences.
For example, an effective way to measure an advertising campaign for a new product might consider – sales or uptake, customer feedback and satisfaction levels. But another measure of success for a different brand striving for innovation could be the number of new concepts created or initiated within their business.
Alternatively, culture around a project e.g.: collaboration and team upskilling, might be the focus of your business.
Analysis and measurement also need to move and flex in line with the evolution of a project or brand. It’s recommended that you begin with a tool kit of measurement systems that you then tweak as your projects and processes evolve.
An example of this might be a new business launching into market. The focus might initially be on generating Brand Attention and creating interest in your brand or offer. You might initially measure these early brand attention stages by page likes, media impressions or click throughs to your website.
As your brand matured, you would shift focus from simple page likes, to look closely at how followers are engaging with content. Which imagery and language do they prefer? Are there positive/negative comments/thoughts/feelings? Are we receiving feedback or about certain messages? Are we receiving feedback at all?
We must consider what it is that each individual business or project is working towards. There isn’t a one size fits all solution to marketing a brand, so why would we measure every campaign in the same way? Some businesses may value innovation or prototyping in their marketing, while others might be focused on new projects that take a company in a new direction or set them up for expansion into new areas. New businesses might be using Design Thinking to really learn and understand their customer and business challenges. Then, spending the time to design a sound strategy to reach their audiences and build a brand that emotionally connects with them. This path to designing an ideal brand and business might be a slow burn with results taking some time to become clear. While immediate digital performance metrics might be available, the audience sentiment and the relationship building that is the core of strong brands takes a longer time to build.
To stand out from the sea of brands and messages that consumers are bombarded with at every turn, successful marketing today needs to b creative in both our thinking and execution, but also the way in which we measure our performance. As we adopt a more wholistic approach to marketing and think about building connected brands of the future, we need to also re-think the way we measure this creativity. Business and marketers need an armoury of measurement tools. No one method or one tool will do the job anymore and we need to understand that strong brands aren’t built overnight, you’ve got to be in it for the long-game.