How WW and Salesforce Approach Effectiveness Measurement
All marketing effectiveness metrics must “evolve to long-term value” and consider the “big picture,” said marketing executives at WW (formerly Weight Watchers) and Salesforce.
Their comments follow the release of a study by the Data and Marketing Association (DMA) suggesting a decline in marketing effectiveness since 2020 and a “puzzling” over-reliance on campaign delivery metrics instead of true metrics. mark and response.
“[Every measure] has to evolve based on the long-term value of those customers you’re attracting, how much you’re spending, how effective that channel is, and ultimately what that actually means,” said VP. president of WW’s growth and performance. Tony Miller, Chairman of the Marketing and DMA Awards Committee, speaking at the organization’s Making Measurement Meaningful event this week.
Miller added that marketing effectiveness isn’t “just a matter of a campaign’s return on investment” (ROI), although that is an “important” metric. Marketers should include brand and response metrics when determining the effectiveness of their work, he said.
At WW, the marketing team has followed a “very focused, short-term campaign strategy” over the past year, Miller said, to meet company-set goals on daily membership and weekly. Globally, the company currently views its membership volume as its “holy grail” measure.
However, Miller and his team tried to “stretch” that focus into a conversation about “volume and value,” bringing in long-term metrics and the need to invest in the “upper funnel” so that the performance activity works “harder”. and “more efficiently”.
The industry does not put enough emphasis on the metrics that matter. Only 59% relate to significant response, brand and company effects.
Ian Gibbs, DMA
WW has added new models to its Multi-Touch Attribution (MTA) and Marketing Mix Modeling (MMM), to “help us unlock the true long-term value of CAC [customer acquisition cost] and let’s really look at that by channel, so we know the threshold that we can spend,” Miller said.
“It opens up a big conversation for us globally… My role is to represent impact marketing to my executive committee, not just here in the UK, but in New York. So it’s very important that we can articulate that clearly.
Separately, Salesforce Product Marketing Director for EMEA, Jonathan Beeston, said it’s important to remember that each individual brand campaign is part of a “much bigger” marketing strategy.
“I think that’s the most important thing,” he said. “You have to define and understand how you measure how individual campaigns fit into that.”
Beeston added that with “more and more” CMOs now supporting the entire customer experience, from advertising to in-store experience to call centers, there is now a need to “changing our language” around metrics, so marketers can easily communicate with different stakeholders around the business.
It also requires opening up efficiency metrics and data to other departments and agencies within the company, he said.
“Marketers need to understand this. If you really want to understand how something affects your long-term customer relationships, retention, etc., it’s really essential that you do [the data] available and useful to people in your department, but also to all your agencies.
As the world changes “rapidly”, especially now as countries emerge from the pandemic and face new inflation challenges and a cost of living crisis, it is also important for marketers to test and are constantly re-evaluating their measurement practices, Beeston added.
“Even when we look to the next few months, the macroeconomic scenario changes significantly. Consumer behavior is changing, perhaps in ways we don’t want because of this. If you don’t fully test and re-evaluate what’s going on, what worked last year may not work this year.
If there was a “crisis” in marketing effectiveness, it is now over
Let go of vanity measures
DMA research, conducted in partnership with Salesforce, suggests that marketing effectiveness declined by 23% in 2021.
The organization analyzed information from more than 1,000 past entries for the DMA awards, dating back to 2017. Of those campaigns, half had a pure response objective, a quarter had a pure brand objective, and a quarter had a dual goal.
The average campaign generated 2.4 effects in 2021, compared to 3.1 effects in 2020.
An analysis of the role of response and brand effects reveals a marginal improvement in campaign brand effectiveness, from 0.5 to 0.6 brand effects. However, this increase was offset by the decrease in response efficiency over the same period, from 2.1 to 1.6 effects.
While research author Ian Gibbs, founder and measurement consultant at Data Stories Consulting, admits that this analysis does not take into account the magnitude of the effects, he said it nevertheless indicates a downward trend. marketing effectiveness.
This is likely due to a number of factors, including a shift towards short-term campaigns during the pandemic, Gibbs explained. The percentage of awards submissions that were short-term campaigns increased from 43% to 53% in 2020 and held steady in 2021.Marketing Week, ISBA and IPA Partner to Explore Marketing Effectiveness
Customer retention has also become a more important ambition than customer acquisition, according to the analysis. In 2020, 53% of campaigns had an acquisition objective. This figure has now fallen to 45%.
“Loyalty is important, but when it comes to driving response, you can’t sweat your existing customers,” Gibbs explained, citing research from the Ehrenberg-Bass Institute of Marketing Science, which found shown that customer acquisition is the best strategy to drive growth.
Indeed, acquisition campaigns were “marginally” more effective than pure loyalty campaigns in the DMA analysis.
Gibbs added that measuring advertising effectiveness is “more difficult than ever” because third-party cookies are being phased out, a current lack of cross-platform measurement in a “cross-platform world” and so much data hidden in walled gardens. . from Facebook and Google.
However, this is compounded by the “bewildering” number of metrics marketers use to measure the effectiveness of their work. DMA’s analysis found 170 metrics used in its award submissions.
“It’s a little eye-opening and certainly disconcerting,” Gibbs said. “How are we supposed to find a cohesive, cohesive way to talk about the 170 different ways we do [effectiveness measurement]. Of course, we have to accept that every industry is unique, every campaign is unique – that’s fine. But I think we can still find commonalities.
[Every measure] must scale based on the long-term value of the customers you attract, how much you spend, how effective that channel is, and ultimately what that actually means.
Tony Miller, WW
Of those 170 metrics, 41% relate to campaign delivery metrics, or “vanity metrics,” such as impressions, click-through rate, and engagement. This picture has remained stable between 2017 and 2021, indicating that “no significant progress” is being made in how the industry measures the impact of campaigns, the report says.
“There’s way too much focus on things that don’t really matter,” Gibbs said.
Breaking down the remaining 59%, 36% were response metrics, 17% were brand metrics, and 6% were business metrics. While the number of brand metrics increased by 13% for the years between 2017 and 2020, business metrics fell by 10%. According to Gibbs, this is a “problem” because business metrics are the ones that best fit the language of the boardroom.
He added: “The industry is not putting enough emphasis on the metrics that matter. Only 59% relate to meaningful response, brand and business effects. So we really need to shift our thinking back to those.
On the other hand, research conducted by econometrician and Magic Numbers founder Grace Kite earlier this year suggests, based on the ROI of ordinary unrewarded campaigns, that “currently, there is no of crisis” of efficiency.
The average return on investment over the past few years is £3.80 in revenue for every £1 spent on advertising. Return on investment has declined between 2005 and today, especially the year of the Brexit vote. But by 2019, ROI was back to at least its 2005 level.