As of late, uncertainty seems to be the only variable we can count on as COVID-19 reshapes expectations, norms and spending patterns. As we all make adjustments in our personal and professional lives, businesses likewise must adapt in order to survive. In a time when the terms “uncertain times” and “new normal” have become deeply embedded in our vocabulary, it has never been more pressing for businesses to understand how consumer behavior, econometric factors, and marketing spend collide to influence business value. The ability to predict, invest wisely, measure, and optimize is of utmost criticality for marketing executives.
In this article, we will explore the evolution of marketing measurement, the impacts of COVID-19, and our structured methodology for businesses to carve a path forward and make data-driven decisions to optimize marketing return on investment (mROI).
Where We Are… and How We Got Here
While COVID-19 is certainly an accelerating force, the state of marketing measurement and advanced analytics has long been shifting with the proliferation of the marketing technology landscape and resulting wealth of data. Further compounding the impact of this growth are data siloes, the speed of data unification, and availability. Simplified, broad-sweeping insights are no longer enough to compete in today’s landscape and stay ahead of rapidly changing consumer trends.
In addition, marketers feel increasing pressure and accountability to quantify marketing value and deliver incrementality. With the shift of perception of marketing as an expense to marketing as a contributor to revenue, CMOs must evolve their marketing analytics capabilities to be able to answer questions such as:
- What is the incremental lift associated with an integrated marketing program?
- How do econometric factors impact and/or amplify strategic and integrated marketing efforts?
- Where can I put my “next best marketing dollar” to increase mROI?
As questions such as these are swirling, we now add the COVID-19 variable and long-term implications that come with it. We at Credera anticipate permanent shifts in the ways customers live, shop, and work. With these cosmic shifts, it is becoming abundantly clear that the old ways of measuring marketing performance simply will not adapt in our new normal.
So Where Do We Go From Here?
Though the path forward is never clearly marked, for many companies the first step may be defining a clear mROI strategy and developing advanced analytics capabilities in order to inform marketing efforts and power the orchestration and activation of marketing.
The spectrum of marketing analytics capabilities among organizations is vast, and the chasm between sophisticated marketing organizations and those that are just starting up can seem daunting. But wherever your organization falls, there are attainable next steps to march toward analytics maturity and reliable measurement of mROI.
At Credera, we’ve developed a proven methodology to help companies embark on the journey toward sophisticated advanced analytics and integrated mROI programs. We hope that walking through this framework will empower your organization to take the next step toward analytics maturity.
Figure 1. Credera’s mROI Methodology
Assess: Start with Alignment & Understanding
For organizations just beginning their measurement journey, it’s critical to invest in a thoughtful mROI strategy for building foundational capabilities. To do so, start with aligning on business priorities. Ask yourself and your executive team:
- How do we currently define success as a marketing organization, and is that the right way to do so?
- What are the people, process, data, and & technology requirements needed for success?
- What current baseline metrics can we use to measure against future efforts?
Once you have aligned on your measurement North Star, turn inward to assess the current state of your data. Investing in your data is critical, as the outputs of your analysis efforts are dependent on the quality of data ingested into the models. We recommend what we call a “data health check” to identify any gaps early on and ensure standardization across data sources before crafting your data models. In addition, ensure that your data sources – whether owned, managed by third-parties, or behind walled gardens – can be unified and piped into your models to account for channel variations.
In these early innings, you may also need to determine whether your organization wants to invest in building custom mROI capabilities or buy a packaged SaaS solution. Both approaches have pros and cons. Building from scratch offers precision and customization to your organization’s specific needs, but requires the resources and cost associated with developing and maintaining a homegrown solution. Conversely, buying an out-of-the-box solution may initially save time and money, but may also limit your organization’s ability to measure the granular dimensions you seek to analyze. There’s often not a cut-and-dry answer to this question, so it’s important to engage your IT team and partners early in the process to make the most informed decision that meets your organization’s long-term objectives.
Model: Build & Execute Your Experimentation Framework
Now that you’ve aligned on your measurement objectives and cleansed and unified your data, you’re ready to begin building out your model, or experimentation framework. When crafting an experimentation framework, consider the multiple dimensions, both controllable and uncontrollable, that contribute to your marketing investments. For example, in the time of COVID-19, you may want to be hyper-specific about location to understand the impact that store re-openings may have on mROI. Likewise, as customer behaviors rapidly shift, you may want to understand the impact of marketing efforts in micro-moments along the customer journey to identify the most impactful areas of optimization.
Begin by asking questions. Insight is driven by curiosity. Create hypotheses and then query your data for the critical insights you need to advance your marketing organization, and ensure that your analytics capabilities enable you to plan various scenarios and forecast outcomes.
Figure 2. Credera’s mROI Experimentation Framework
As you outline the “what-ifs,” follow your experimentation framework through to measurable outcomes. We outline four simple steps to put experimentation into practice:
- Ideate – Conduct collaborative ideation sessions to review experiment results and generate new ideas and hypotheses
- Score & Prioritize – Quantitatively score and rank ideas using Multi-Criteria Decision Analysis (MCDA) over key attributes (e.g., potential benefit, risks, constraints, scalability, measurability)
- Design & Execute – Design, schedule, and execute experiments, creating control & test groups and ensuring sample size and power requirements
- Measure & Learn – Utilize advanced testing methodologies such as multivariate testing (MVT), A/B testing, and causal impact to maximize insights
Throughout the process, consider how insights can also add value in adjacent business operations such as driving transparency in agency performance, optimizing inventory planning in merchandising, or forecasting business performance in corporate strategy. Cross-team collaboration will ensure that the insights that you extract are well-leveraged to create value throughout the organization.
Following an experimentation framework and continuing to evolve your analytics capabilities will position your organization to not only react to shifting landscapes and customer behavior, but to proactively optimize and to scale investments with confidence.
Operationalize: Facilitate Organizational Transformation
Development of an mROI solution is not just an initiative; it requires a cultural shift. It is not simply about technology and capability maturity, but rather a matter of organizational transformation. To truly drive sustainable change, consider the people and process factors listed below, and develop a transformation plan to support long-term success and iterative optimizations of your mROI solution.
Figure 3. Credera’s Organizational Transformation Checklist
Take the First Step Toward Marketing ROI Measurement
As we navigate these unprecedented times when so little seems within our control, we hope this article has been a helpful resource to chart a path forward for taking control of your marketing measurement and investing with confidence to increase mROI and realize your business objectives. No matter where you are in your mROI solution maturity, there is always a first step forward – whether it’s aligning on business objectives, advancing already well-established analytics capabilities, or driving organizational transformation.
If you’re interested in learning more about Credera’s approach to mROI and marketing measurement, please feel free to reach out to us at firstname.lastname@example.org.