Getting dragged into conversations that question or challenge the impact of your marketing strategy is nothing new for digital marketers. We’ve all been there, done that. But when black swan disruptions, such as Covid-19 pandemic, wreak havoc on traditional marketing channels (looking at you, event marketing), the stakes to get performance marketing right reach new heights. No pressure!
Setting the right KPIs and tracking the right metrics can help you demonstrate marketing’s impact on a company’s financial performance. And replace gut-driven marketing conversations with meaningful, data-informed decisions. Wouldn’t that be nice, eh?
Hold tight. Here’s everything you need to know about measuring performance marketing results in unpredictable times.
Vanity vs. Value: tracking metrics that matter
There are tons of marketing metrics you could track. And not knowing which ones really matter is arguably the biggest pitfall marketers fall into.
Vanity metrics are typically defined as metrics that look good on the surface but have little to no substance. It all comes down to one thing: does it tell you what to do next? If you look at a metric and you’re not sure what to make of it or how to use it to make better-informed decisions, that’s a vanity metric. In other words, ditch it.
For instance, gaining 1000 new followers on Twitter may seem impressive, but that number quickly loses its impact if only 10 of those followers go on to convert. Of course, there’s nothing inherently wrong with keeping track of vanity metrics. They can help you determine the success of your messaging, targeting and channel performance. So, as long as you’re using vanity metrics to optimize your content for audience engagement or specific channels (rather than trying to tie the numbers to the ROI), you’re doing it all right.
However, if your goal is to measure marketing’s contribution to revenue, you’ll need to focus on actionable metrics. At their core, actionable metrics aim to answer three key business questions:
- How do you build or lose revenue?
- How do you gain or lose customers?
- What’s driving people to you? (features, benefits, problems)
- Actionable metrics are tracked against SMART KPIs — specific, measurable, achievable, realistic and time-related performance indicators. And we’ve written a practical how-to guide on how to set and measure meaningful marketing KPIs, in case you need a quick refresher.
Now, let’s look at what performance metrics marketers are tracking, and why.
How to measure marketing results with actionable metrics
When setting KPIs, start with your business goals. Targets that are not specific enough can lead to businesses missing opportunities and not looking at or capturing the right data. While you might end up tracking multiple metrics (it’s important to keep your finger on the marketing pulse!), only the most important ones should be used as KPIs.
Here are a few common KPIs for marketing and where they might be used:
Conversion rates. Conversion rate measures the percentage of customers who take a specific, desired action. It could be clicking through a paid ad, signing up for a newsletter or starting a free trial. You’ll probably have to track multiple conversions across your marketing funnels, so make sure you align this metric with your goals.
CAC (customer acquisition cost). The CAC is calculated by dividing all the costs spent on trying to acquire new customers by the number of new customers acquired in the period the money was spent. It is often used as a metric to determine marketing effectiveness.
CLTV (customer lifetime value). The CLTV is calculated by multiplying the average purchase value by average purchase frequency, then multiplying the result by the average amount of time a customer stays with your brand. Knowing your CLTV will help you determine how much you can spend on customer acquisition.
Your performance marketing tracking toolkit
Now, more than ever, businesses need to understand which marketing efforts are moving the needle. This means keeping a close eye on real-time results and adjusting budgets and tactics accordingly. Of course, that’s easier said than done — tracking multiple campaigns in real time can be incredibly complex.
To navigate the pandemic more confidently and keep the campaigns on track, marketers have to reexamine their marketing tech stack and start plugging the gaps.
There are a couple of media planning and tracking tools that can help you hit your targets without losing your mind in the process.
Google Analytics. It would be difficult to find a marketer who’s not aware of Google’s web analytics product. In fact, mastering Google Analytics may be one of the most important skills for a modern marketer. When leveraged correctly, Google Analytics is a powerful tool for tracking, comparing and reporting on marketing campaigns. Yet, with so much data available at a click, it can often come across as too complex or technical. To reap more value from your GA setup, try implementing these practices:
- Create micro and macro goals to track conversions on your site
- Add annotations to provide more context around key events or changes
- Set up proper campaign tracking with tagged links
- Set up Intelligence Event Notifications to get notified about unusual site activity
- Mediatool. As a cloud-based campaign management and optimisation tool, Mediatool provides marketers with a holistic view of all campaign metrics in real time, in one place. Plus, with Mediatool’s collaboration features, teams can report against KPIs, share ideas and act on data insights to run more impactful campaigns.
Has the pandemic forced you to rethink your approach to media and marketing planning? Book a live demo of Mediatool to see how you can leverage the agile marketing planning calendar and reporting and collaboration tools all in one platform. Bulletproof your campaigns while saving time and effort.