Are you struggling to impress the board with the results of your marketing and PR campaigns? Would you like to align your marketing KPIs to business metrics?
In our on-demand webinar, ‘The Good, The Bad, and The Ugly of Marketing Measurement,’ we share how you can impress the board, and explore 5 metrics that will get you promoted and 3 that should get you fired.
We cover:
- Meaningless marketing metrics
- The difference between attribution and incrementality
- The importance of the customer journey
- Why you should care about prospects that are in market
Register to view our webinar on demand by clicking here, and why not get in touch to let us know if our insights helped you.
Napier Webinar: ‘‘The Good, The Bad, and The Ugly of Marketing Measurement’ Transcript
Speakers:Â Mike Maynard
Good afternoon, or good morning, everyone, depending on where you are. And welcome to the next Napier webinar, where we’re going to be talking about the good, the bad, and the ugly of marketing measurement. It’s going to be about 20 minutes. And we’re going to run through some of the metrics that we think should get you fired if you use them. And also, talk about some of the metrics we think should be getting you promoted. Obviously, it’s not always easy to get the right metrics. So one of the things I would say, before we start is that it’s very easy to sit back and go, yes, but getting this data is difficult. For sure, it’s difficult, but it’s definitely worth it. If you’re listening, and you have questions, please do feel free to plug questions into the chat. If you put a question in the chat, whilst we’re going along, we’ll make sure we answer it at the end, we’ll try and get to as many of those questions as possible.
Okay, so let’s crack on and find out about the good, the bad, and the ugly of marketing measurement. So I’m for those who’ve seen the film. You know, clearly, they care about marketing measurement. In the good, the bad, the ugly. As you can see, blondie felt six was the perfect number. And the reason is, is that Blondie had six bullets in his gun chamber. So one useful approach to measurement. Another one, perhaps, you know, it’s a bit more useful is Mark Twain, Mark Twain said, if the metrics you’re looking at aren’t useful in optimising your strategy, stop looking at them. And I think that’s a really great place to start, is when you’re looking at metrics and looking to decide what you want to measure, and what you want to be using to drive your campaign.
Those metrics should be things that really inform your strategy. So high level, so are they making a difference to your business or not? And I think that’s one of the challenges that people have with metrics, is they sit there, and they’re looking at this, you know, a huge number of metrics. And they’re kind of thinking, you know, people must think I’m insane, because what you’re doing is you’re looking at labour metrics and labour numbers, but none of them really mean anything. So the goal of this webinar is to really focus on what are meaningful metrics. So in terms of the agenda, today, we’re gonna start off with the metrics we think are less important. We’re going to talk about things like attribution, and incrementality, which I think are two really important concepts that often get missed when people are measuring marketing campaigns, and often for good reason.
So we’ll explain why. We’ll talk about the customer journey and prospects that are in market and non market. We’ll talk a little bit about how you measure things that are apparently unmeasurable. And then we’ll get down to the three metrics, we think that should get you fired, the five metrics that will get you promoted, will summarise them. And obviously, hopefully, you’ll all have some questions that we can cover at the end, to dig a bit deeper into the topic. So one of the bits of research I found from another agency was actually the importance of measurable impact on the bottom line. So CEOs want marketing to have a measurable impact on the bottom line. And I think that’s important because a lot of marketers shy away from metrics that relate directly to revenue. And this will be a theme as we go through, trying to find metrics that are business metrics, rather than marketing or vanity metrics are really important. So let’s have a look at some of those meaningless marketing metrics.
So, you know, like some follows, they can be easy to obtain valueless if not a relevant contact. A little while ago, several years ago, in the UK, the Lake District Tourism Organisation was very pleased to have grown its number of people who liked their page on Facebook. As it turned out, 100% of the growth was people who lived in Bangladesh. And whilst some of those people may be coming to the Lake District, and maybe planning a holiday there, it seems unlikely they obviously bought clicks or rather their agency bought clicks. So likes and follows can be absolutely meaningless. pageviews absolutely meaningless.
You get bot traffic, you get people who come on to the page and bounce off. None of that necessarily indicates people who are engaged with your business. impressions. I mean, impressions are one thing, impressions in front of the right audience or another. So, quoting impressions is always a very difficult thing to do. open rates, open rates become less and less reliable, as a measure of whether or not an email successful. Previously, it was certainly the case that some people had auto preview. So even if they paid no attention to the email, the email reader would download the images and register and open. Now we have the technology from companies like Apple, that will actually send an open to every single email you receive, to hide which emails you’re opening which emails you’re not. So open rates are not very meaningless. And in fact, even clicks are not very meaningless. So you get a lot of bot clicks. So particularly malware bots, checking for malware, when you send emails, you get a lot of accidental clicks, you can target the wrong audience. It never ceases to amaze me how many people will click on a Google search that is totally and utterly irrelevant to them. And we see companies bidding on terms that we know are generating searches that are completely unrelated to what that company is doing. And yet those searches still generate clicks.
So measuring clicks is really a bad idea. And then lastly, contacts. And contacts are okay, if they’re actually people who are going to buy. And we’re talking a little bit about the value of contacts and why. Sometimes contacts are much more valuable. If you actually jump straight to the three worst metrics, we we tried to do some research on this, in our opinion, the three worst metrics are email opens, impressions and clicks. They’re all very easy metrics to, to measure, they all feel like they’re vaguely relevant. But as raw numbers, if you look at them, they give you very little detail about how well your campaigns running how well you’re targeting people, and things like that, I did actually ask on LinkedIn, to vote the winner. And the price went to impressions. So the LinkedIn audience and this may have changed because the poll was still running when I put these slides together. But the LinkedIn audience very strongly felt impressions was the least useful metrics.
So it’s one thing we need to look at. Having said that, I do know that a lot of boards want to know how far marketing campaigns reach how many people they reach. So I know people are still using impressions. And sometimes still, they have to, but certainly these very simplistic metrics, whilst they’re easy to measure, and you get all of that data. You know, I think trying to obsess over these very simplistic numbers, is a way to make people think that you know, you’ve gone insane on just getting the numbers. What we really care about is incrementality. And let me explain this, because I think this is a really important concept.
At the moment, if you look at most of the marketing technology products that are around, whether that be at one end Google ads, or other ends, you know, systems for analysing marketing performance, that are designed for enterprises, and you know, costing 10s, or even hundreds of 1000s of dollars, they all look at attribution. And attribution is kind of a very simplistic concept. So what it does is it basically says that somebody who was touched by marketing activity, actually, you know, gets attributed an element of a sale or an action, maybe that’s a generation of illegal whatever. So it could be someone clicks a Google ad, and then perhaps, you know, week later they buy from your website. If you offer online sales, you can attribute an element of that sale to that Google ad. And there’s lots of different ways to do it. There are lots of models. So you know, very simple one, the last thing you recognise someone doing could get all the credit, the first thing you recognise someone interacting with, you get all the credit. So you know, if the Google ad is the first thing, you might give it all the credit if you’ve got first touch attribution. But if the person you know, interacts with, say, a display ad or something in between the Google ad and buying, and you’re using first touch Google ad gets nothing. So it’s very arbitrary. There’s models.
And basically, and this is obviously one of my favourite phrases. Being an engineer. It’s looking for correlation, not causation. So it’s basically looking to see whether someone has been touched by marketing and then bought. There are lots of ways where you can generate a lot of attributed sales that make campaigns look good, that have virtually no real impact on the business. One example of that is is running Google ads around your brand or if you’ve got a particular brand for your online shop around that, if people are searching for your online shop, and you’re running Google ads that target that keyword, your Google ads will be above your organic result, there may be nothing else in between. So nothing is going to stop this person getting to the shop.
But because the Google ad is above the organic result, someone who is going to buy because they’re searching for your shop, will click on your ad and suddenly say, that’s all down to my ad. In fact, the ad did absolutely nothing to increase the sales. So what you’ve seen is attribution and no incrementality incrementality is linking marketing activity to an increase in sales or conversions. It’s very difficult to measure. And it’s really achieved by testing. So quite typically, you’ll have a group of people that you’re testing, you’re running a marketing campaign to a group of people you aren’t. And you see if the group of people that are seeing the marketing campaign, ultimately, you know, either by more, download more data sheets, or whatever.
So quite often, particularly in America, which is a much larger market than Europe, you’ll see people running ads in city A but not city B. If the sales in city a grow quite clearly the ads have had an impact. But testing can be very challenging, because what you need is you need to separate cohorts. So whether that’s two separate cities, or whether it’s different approaches, the you know, a fundamentally seeing the same situation, so they’re not seeing anything else that might drive them to either increase or decrease sales. So, you know, large metros in America work very well. But it’s very hard, for example, in Europe to run it, because if you run ads in the UK, and not in Germany, there’s probably a lot of other factors that are determining the growth of sales in the UK in Germany, not just your ads, so it could mask the impact of the ads.
So measuring incrementality would be a whole another website, sorry, a whole another webinar. But certainly, it’s something I think that you should bear in mind, it’s all about measuring how much you impact the business, rather than trying to claim that we touch this person on the way to, to making a purchase or on the way to downloading a datasheet. And therefore it’s all down to us. Because although sometimes that can be correct that your campaign impacted it, you really have no idea whether the campaign had a positive impact or not. I think one of the things that’s also very important is to understand the customer journey. And when you’re measuring, you want to achieve different things. If you’ve got people who are right at the start of the customer journey, they’ve realised that they need a new widget, they’re looking for widget vendors, they’re looking to understand those vendors offering offerings. So having someone come to your website, maybe download some information, you know, perhaps look at a product brochure, if you’ve got digital product brochures, all of that is really important at the start of that customer journey. At the end of the customer journey, you know, if you’re looking to, for example, get on a prototype board, you’ve got to sell those prototype or deliver those prototype quantities.
And actually, downloads don’t make any sense. So understanding where all your prospects are in terms of the customer journey, are really, really important. And actually, what you really want to do is you really want to get people to move along that journey. And the one thing I can say is that with this journey, clicking on a Google search ad is not going to take someone from the position where they realise they’re going to research vendors to buying volume. And this is a great example of where you know, attribution can be completely wrong, quite clearly where someone’s making involved decision, they’ve got an evaluation stage, they’re in the research stage, quickly, they’re not going to enter production and buy by volume straightaway, it’s going to there’s going to be a period of time a process to do this. But if that person happens to click on a Google ad, because they’re researching and then perhaps buy something else, they’ll immediately get attributed as being driven from, you know, this research stage through to the purchasing stage. By that Google, it’s quite clearly meaningless. It’s correlation.
But the Google I did not cause that production, it was unrelated. So what you really have to do is think about driving people through the process, moving them from step to step. And that process with a lot of our clients and a lot of our clients in b2b involves, you know, design processes, product selection, and therefore it can take months so it’s not an immediate thing. One of the things we do need to look at as well is when we’re marketing is whether we can actually drive a sale. So we looked at that customer journey, and quite often, people at the start of the customer journey, they’re not ready to talk this very friendly and rather charming looking salesperson. They’re still researching, in this case, what car to buy, rather than actually, you know being in the process of being prepared to put money down. So you’ve really got to decide what you’re doing. And you know, if you don’t drive as an example, it’s no good the salesman talking to you because you’re not going to buy a car because you don’t drive.
Apologize as well AI generated images you’ve probably seen and some very interesting texts, AI still struggles with text and images. So there are people who come by and people who can’t. And this is something called being in market. So let’s look at a simple model of most people’s markets. So typically, when we talk about marketing, we talk about the available market. So the total available market, so if we’re selling widgets, there’s a total market for widgets. And that might have a value of, let’s say, a billion dollars. But the widgets we make don’t actually meet everybody’s needs. So we might make, you know, high performance, high end more expensive widgets, or we might make the low cost, but low functionality widget. And so within that total available market, there’s what’s called a serviceable available market, the market you can actually sell to. And that’s really, really important to look at, because that’s the market size that really matters to you. And that matters to you over a period of time. So one example I would give would be, for example, one of our clients who sell baggage handling systems. So these systems go into airports, they move your bags from when you check in to the plane, and then also bring your bags back when the plane lands. And the market for that, you know, is potentially pretty big, there’s a lot of airports, the systems are quite expensive.
But the reality is, is that very few airports are actually in the process of buying a baggage handling system. And the reason for that is you’ve got to build a terminal to be able to put the baggage handling system in. So within that you’ve got a small percentage of the market that is in market the classic number that everybody quotes. And it’s absolutely a rule of thumb, it’s not an accurate number, don’t don’t take put too much faith in it is that, you know, in the average b2b market, around 5% of your audience will be in market and ready to purchase. And 95% will not actually be in that stage of evaluating and purchasing products. So when you run your advertising, and in this case, your advertising might hit that whole market for widgets, you’ve only got a very small percentage of the market going to hit because it’s 5% there in market and not all of those people in market are actually in your serviceable market.
So you might only be hitting say 3% of the people who see your ads could be in a position to buy. So it’s very hard to drive immediate sales. Of course, you know, in three months, or maybe three years in the baggage handling context. There’ll be bigger, there’ll be more people in market. And so what you need to do is think about how you address the people who are not in market. If you’re measuring, measuring people who are in market, there could be very, very valuable. They’re the people you can potentially convert. But determining who they are can also be very challenging. So it has an impact both for campaign strategy, and also for measurement. So we want to try and measure people who are in market, but we know that’s very hard. The other thing to do is measure some of the things we try and achieve with our marketing. So PR particularly tries to achieve you know reputation. But you also might want a simple question of you know, how valuable is a billboard or how valuable is a story that I’ve got promoted? Well, the reality is it’s very hard but we know it’s got value. Some of the people here based in the UK will recognise Jared Ratner.
Jared Ratner famously ran a jewellers called retinas and decided to give a speech and he gave a speech about three times talking about how they managed to sell jewellery so cheap and his message was the reason we sell jewellery That’s so cheap, is it’s crap. And literally, those were his words. And he even compared earrings to prod and sandwiches and said that prawn sandwiches might last longer. He presented the presentation in small business environments. It went down really well everybody loved it. And then he went to the Institute of directors where the national news media also go And within months Ratner’s had actually gone bankrupt, closed down, because he destroyed the reputation overnight, so impossible to measure reputation. But important to understand that it really has an impact.
And equally in terms of measuring anything of these intangibles, really the only thing you can do is testing. And so what do you want to do, again, is look for that testing for incrementality. So if you’re building a reputation, and you invest money in one country or one city building that reputation, then perhaps you can compare the performance in other cities. But it does get very difficult. And it gets particularly difficult in b2b, where we have a lot of media that is either national or global, very little, that’s local. So one of the things you do have to do is think very carefully about building campaigns, you can get some information from digital campaigns that are hyper targeted towards local areas. And that’s something that’s worth doing. But then many of us have got very, very small markets in terms of number of customers. And so the variation between market is quite difficult to account for. So how do we measure the the unmeasurable? Well, the answer is sometimes we can’t, sometimes I think we just have to look at are we generally moving the needle forward? Are we genuinely growing sales? And if so, let’s look at what we feel is working, what’s not, let’s bring that in and out of the mix. And then let’s try and work out what is actually making the difference. So it’s about testing rather than about a magic bullet to measure the unmeasurable. So, let’s have a look. Three metrics to get you fired. We’ve mentioned these impressions, cost per click, and website page traffic. So lots of different metrics that can get you fired, let’s look at the metrics we think should get you promoted. Oh, sorry, one thing I was gonna say was another bad metric is allocating arbitrary monetary values. I mean, Google and Google Ads love you to do this. So you’ve got a conversion, which is, for example, a PDF download, and Google wants you to act to allocate a value to it. Well, how valuable is a PDF download, it’s completely meaningless.
So I think that’s one thing we need to be very careful of it is, and it’s true possible to measure the average ratio of PDF downloads to sales, the average value of sales, and then you can arguably attribute and this is not incrementality. It’s attribution. attribute all the value of your sales if you want to PDFs and give a value for PDF downloads, but it is still fairly meaningless, it doesn’t mean that increasing those downloads is going to necessarily increase sales. So another bad metric is these arbitrary monetary values that people allocate. And as I say, you know, some of the systems want you to allocate, because they’re trying to sell you ads, they’re trying to make you feel like you’re getting something valuable.
Okay, now, let’s have a look at the metrics we think should get you promoted. These I think are more important. So we’ve talked about incrementality, the ultimate metric, I think, is how much you’re increasing revenue, or how much you’re increasing return on investment. We know it’s key, we also know it’s very difficult to do. But aiming towards that perfect metric, I think, is really the key thing to do. I think customer acquisition cost is a much underrated metric in a lot of industries. So in software as a service, customer acquisition cost is widely used. It’s a very widely used metric, as well as customer lifetime value. And they use that to calculate, you know, how many ads to run, how much to spend, and whether the customer acquisition cost is less than the customer lifetime value. That’s relatively easy in SAS, and that actually, the incremental cost of taking a customer is generally fairly small. So it’s a very easy calculation. It’s much less common in a lot of more engineering environments. And customer acquisition costs can be very important.
So one example I would give is if you’re in a semiconductor environment, and you’re selling for example, FPGAs. Once you get locked into a particular suppliers, FPGA, you tend to reuse them, you’ve got inherent knowledge of how to use them, you’ve got a code base, you can reuse, you’ve got development tools, so customers become very valuable, their lifetime value is quite high, because they don’t just buy the products for first design. They keep designing with your product, so we definitely recommend using customer acquisition cost. Another metric that is really important and very much underrated is the change in time to convert Shouldn’t measuring the time it takes for someone to go from evaluating a product to, you know, maybe meeting with a salesperson, if that’s your conversion in buying prototype quantities or even buying production quantities, speed matters, it really is important. And good campaigns will generally reduce that time to conversion. So generally speaking, campaigns that increase ROI, an incremental level will also decrease the time to conversion speed up the conversion funnel. return on marketing investments, if you can measure that, that’s great, it’s one of the most difficult things to measure because you really need to measure incrementality. So that incremental revenue, and it’s about the amount of money you grow, versus the amount of money you invest, not the amount of revenue that’s actually attributed to your campaign. And lastly, qualified leads now, we’ve gotten to some easier metrics here. And certainly getting qualified leads is a much better way of measuring things than simply trying to see who touched the customer last before they paid. So qualified leads is generally a very good metric. The important thing to say about qualified leads is they are only good, if you’ve got a very clear definition of what a qualified lead is into you share that definition with sales, prior to during and after your campaign.
So you make sure that you have this consistent focus on what you consider valuable and what you consider not valuable. Of course, qualified leads is not a financial metric. So that is one thing to mention is that you can’t attribute financial value to particular qualified leads. Again, you really need to measure that incrementality in terms of how many new customers you generate, and how much additional sales you can drive. And then the last one, and it’s not really a metric, which is why it’s our bonus metric, is the customer journey model. And one of the things that’s really effective in terms of metrics, is understanding how you move people through the customer journey. So for example, you got a target audience, you want to make more people aware of your product, if you can run a PR campaign, that increases awareness of your product, that’s a very positive thing, it’s a very measurable thing, you know, people are being moved along, you might then want to have a LinkedIn campaign to drive people to the website.
So people are aware of your product getting into research. Once they’re researching your website, you can have a white paper off a pop up. So this is moving people into evaluation that download the white paper, they’ll read the white paper, but also that’s giving you an opportunity to drive sales leads. Once you’ve got the contacts, you know, you might then also email them through your marketing systems to try and drive a sales meeting. And there’s lots of ways you can measure these activities. So you know, one example is is you know, looking for engaged visitors for research. White Paper downloads is another great one, the number of sales meetings is another good metric, and the number of people trialling products.
So if you, you know, for example, are in the semiconductor sector, and you offer demonstration that or evaluation boards, or alternatively, you know, if you’re more into infrastructure, offering demonstration equipment, all of that is ways to measure the impact on the customer journey. And ultimately, what you’re aiming to do is to try and measure revenue and profits. And if you can keep moving people down this stage, or the stage of this customer journey, you’ll ultimately grow revenue and profits. And as I mentioned, the one thing you don’t want to do is try and take people from an unaware of your product straight through to purchase, that’s completely unrealistic. It’s not going to happen. And it really is a result of people using simple attribution models. So I can skip these, because I’ve talked about all of those.
So what are the key takeaways? Well, lots of people who aren’t vanity metrics, these really simple, you know, impressions, clicks, pageviews. They’re very simple, they’re actually quite easy to gain and manipulate. And it’s a terrible idea. So give up the vanity metrics and use business metrics would always be our recommendation. And business metrics typically have this advantage that they’ve got a monetary value. So metrics of monetary values generally are better. Of course, they’re not better if your metric of monetary value has an artificial monetary value. So they need to be real money. Perhaps the most important thing is to think incrementality Am I increasing sales? Or am I just advertising to the people who would buy anyway I And the only way to do that is through testing. So Test, test and test. Really important to do that. So thank you very much for listening to the webinar. Hopefully, we’ve given you some interesting ideas and things to think about. If you enjoyed this, or alternatively, you didn’t want to have a webinar on something, that’s a different topic.
Our next webinar is going to be on the 10th of July, four o’clock UK ATM, San Francisco, 11 o’clock in the East Coast of America, five o’clock on in Europe, or most of Europe. And we’re going to talk about segmentation. And we will talk about nine ways to segment audiences. And so you can get really, really good targeting. So please do attend that there’s a QR code there. If you want to take the QR code and register now. And we’d love to see you on the webinar. If you do have questions, or comments, please put them in the chat now. And what I’ll do is I’ll go and open up the chat and see if I can respond to any of your questions.
Okay, so we have one question so far, obviously, please do feel free to add one. If you do, do have something you’d like to ask. But we’ve got a great question here. So do we have any tips for building a reporting dashboard for multi channel campaigns that use and display marketing measurement effectively? I think it’s a great question. And lots of people like to rush into building dashboards that they feel are going to work that give them lots of lots of information, you see lots of lots of data, all this data spread about. And generally speaking, the problem with these dashboards, is they usually gravitate to the simpler metrics together, and the metrics that are going to apply it across a range of different channels. So if you’re running, for example, some paid ads and a trade magazine, you’re running some social media organic campaign.
And, you know, perhaps you’re doing some search, you can measure clicks, you can measure impressions. And these easy to measure things work really well. So they tend to come into the dashboard, you get the number of clicks, and you’ll suddenly find that, you know, your cost per click in search is way lower, perhaps than your cost per click for a trade publication doesn’t necessarily tell you anything, because you’re trying to do different things with those different approaches, search is approaching, you know, the group of people are in market, who are actively looking for a product today, typically, whereas trade media is generally looking for people who perhaps are, you know, earlier in that customer journey at the research stage, and potentially could be more valuable, you know, if someone’s looking to buy today, and we’re running a competitive search campaign, you know, against our competitors brands, there is a real risk that we’re going to struggle to convert those people, because they’ve already decided they’ve already picked the competitor.
Whereas if we can get them earlier in the customer journey, we’re much more likely to convert them. So I think the answer is to try not to think about the dashboard as the first thing. But to try and think about how you can measure the impact on sales growth, or you know, whether if it’s Leeds or some other business metric, and try and look at the contribution of each of your channels to growing that cell, then that could be through, you know, perhaps having a customer journey model and building a dashboard around the journey model.
So what are we doing at the start to bring people in? Who perhaps got low awareness or, you know, get them to start evaluating us? All the way through to how do we close that sale? How do we get people to actually trial the product and then buy it? So I think, you know, my recommendation would be think about the process of purchasing, rather than necessarily just rushing and trying to get a dashboard with lots of numbers. I don’t have any other questions. So thank you all very much for listening to this. I hope you’ll join us on the webinar, where we talk about segmentation.
And if anyone does have a question that they’d like to ask or don’t want to ask, you know, during the webinar, obviously, my email is on the slide. So you’re very welcome to just email me directly. And also, if you’ve got any suggestions for topics that you’d like us to cover in the webinar, or indeed feedback on this one. We’d love to hear it. Thank you very much for listening to the webinar. Have a great rest of your day. And look forward to seeing you when we talk about segmentation.
