Study Shows Marketers Misguided by Ineffective Metrics

Study Shows Marketers Misguided by Ineffective Metrics

A new analysis from the DMA provides insight into how marketers measure marketing performance, indicating a strong emphasis on campaign data while improving elsewhere. 

According to a new Direct Marketing Association (DMA) survey, marketers are evaluating the least helpful effectiveness measures. Following a two-year drop, there has been a minor improvement in the measuring of marketing’s influence on broader business measures.

Based on a database of over 1,500 campaigns, the research categorizes ‘ meaningful KPIs’ into four types. These include response effects (short-term, performance-based marketing), brand effects (longer-term brand-building measures), business impacts (connected to overall business success), and campaign delivery effects.

While 92% of marketers claim to be able to differentiate between these impacts, the paper contends that they have been overly focused on campaign metrics that “tell us little about overall marketing effectiveness”.

According to DMA statistics, 39% of indicators used in reporting marketing performance in 2023 were “less meaningful” campaign delivery and “digital vanity metrics,” while 61% related to “meaningful” business, brand, and reaction effects.

This translates to 39% of marketing KPIs being used to assess performance, followed by reaction (30%), brand (21%), and business (10%).

The analysis shows a small rise in the measurement of business effects between 2020 (6%) and 2023 (10%), most likely as a result of the increased scrutiny that marketing budgets face. Brand efficacy measures have also grown marginally, from 15% in 2020 to 21% in 2023.

Best-Practice Measuring Methods and Approaches

Attribution modeling/MTA is the most used measuring approach among marketers, accounting for 36% of campaigns. This is closely followed by brand tracking (35%), econometrics (26%), and brand uplift studies (12%), with geo-testing (3%) and pre-testing (2%) receiving the least attention.

A hypothetical scenario for investing in best practice measuring methodologies depicts how spending on each metric should increase effectiveness. It is hypothesized that marketers who invest in multi-touch attribution see a 35% increase in response effects in year one, a 229% increase in brand effects in year two, and a 150% increase in business effects in year three. 

While diverting funding from measurement to spending on media is a temptation when budgets are under strain, the research warns that “it is a false economy”. Instead, it is advantageous to “sacrifice a bit of campaign reach for a lot of campaign certainty”. 

Effectively Measured Channels and Sectors

When determining which channels are most successfully assessed, ad mail comes out on top, with a score of 163 for the ‘chance of campaign to avoid utilizing campaign delivery measures’.

TV likewise over-indexed (108) on this parameter, although both cases might be ascribed to a decreased temptation to use so-called vanity metrics accessible in the digital sector. According to DMA statistics, social media (66), email (67), and digital (68) all had the lowest scores. 

When broken down by industry, the highest ratings for best practice measurement were DIY/home/trade (184), health and wellness (138), and charity (127), with the lowest scores going to hospitality (75), fashion and beauty (64) and entertainment (50).

With over two-thirds of marketers seeing a lack of uniform measurement frameworks as a major impediment to adequate effectiveness assessment, the survey emphasizes the need to develop a unified marketing measurement framework.

According to the DMA, they should eventually integrate KPIs with campaign objectives while also documenting benchmarks, targets, and performance, as well as significant learnings for future testing. These frameworks are also becoming increasingly significant in assisting marketers’ investment decisions and obtaining the cooperation of finance departments.

Source- Marketingweek

Leave a Reply

Your email address will not be published. Required fields are marked *