ABCs of Marketing Measurement

Artificial intelligence is used in marketing analytics to automate data analysis. Using AI in marketing measurement enables marketers to find opportunities for optimization faster and typically in a more cost-effective way. But be careful to not get trapped by generic AI that hides the method behind measurement.

Brand building is a way to actively grow a company's brand through top of the sales funnel marketing efforts to broader audiences. The measurement of brand building can be difficult but is imperative to understand how to drive long-term business growth.

To remain successful, Direct to Consumer (DTC) brands must make the transitions to broader-reach, CPG (Consumer Packaged Goods) style marketing. This requires a shift from a sole sales activation strategy to one that mixes activation with larger brand-building.

In measuring impact of advertising channel, it is critical to account for the dynamics of the relationship of media to response, including time to action and the risk of over-exposure. Decay and Saturation are two primary components of any Marketing Mix Model, helping isolate the quantitative shape of those relationships. Decay accounts for the long tail of conversion after exposure, while saturation helps understand if an audience has seen an advertisement enough times (or too much). For every brand, and every tactic, there is a unique shape of impact that needs to be identified to ensure the most accurate measurement.

It’s no surprise, but Experimentation is a critical tool for any marketer to test strategies, learn, and then apply those learnings. In today’s cookieless world, experimentation, in the form of incrementality testing, is playing an even more critical role in helping marketers understand the true attribution of some of their tactics. And while it provides accurate and easy-to-understand results, it can be limited in its application across the mix and challenging to do at scale. Experimentation and modeling are extremely complimentary when applied correctly, and gives holistic and validated measurement and optimization opportunity.

Funnel analytics are a critical component of marketing measurement that allows businesses to track and analyze the customer journey from initial awareness to final purchase, to identify points of friction and optimize conversion rates. With the right tools and data, marketers can use funnel analytics to make informed decisions, drive growth, and achieve their business goals.

To get the most out of any analysis, it is important to break out variables into the appropriate level of granularity. Granularity is the level at which media placements and KPIs are grouped together or broken apart. Too granular and the results may be fragmented, unreliable, or paralyzing. Too abstract and the analysis is too general to act upon. It is important to find the right level of granularity for each measurement solution to get the most out of measurement.

Hypothesis testing is a statistical methodology that helps to identify patterns and relationships between variables, and to assess the significance of these relationships. By formulating and testing hypotheses, marketers can gain a deeper understanding of their target audience, their interests and behaviors, and the effectiveness of various marketing strategies.

Incrementality and attribution are two different approaches to measuring the impact of marketing efforts, with some key differences between them. Attribution quantifies the impact of multiple marketing touchpoints within a conversion, while incrementality can go as far as measuring the outcomes that would not have occurred without the marketing touchpoint.

In today's data-driven marketing landscape, several job roles are crucial for measuring and optimizing marketing efforts. These roles involve leveraging data to uncover insights, optimize strategies, and drive business growth.

In the ever-evolving landscape of marketing, Key Performance Indicators (KPIs) are invaluable tools for measuring success and driving growth. From website traffic to customer acquisition cost, KPIs provide actionable insights that enable marketers to make data-driven decisions. KPIs play an important role in marketing mix modeling are essential to track for effective marketing campaigns.

Marketing mix modeling (MMM) is a powerful technique that enables businesses to analyze the impact of marketing activities on sales and revenue. Two of the leading techniques are linear and multiplicative modeling. There are some key differences between these methodologies, their applications in marketing, and their effectiveness in providing actionable insights for optimizing marketing strategies.

Macroeconomics plays a pivotal role in shaping market conditions and consumer behavior, making it an essential consideration for marketing professionals. Macroeconomics impacts marketing analytics as macroeconomic factors influence consumer spending patterns and market dynamics. By leveraging macroeconomic data in marketing analytics, businesses can gain valuable insights to optimize their strategies, adapt to changing market conditions, and drive growth in a dynamic economic landscape.

Marketing mix modeling (MMM) has evolved to embrace nested modeling, offering a more refined approach to understanding the complex interactions between marketing channels. Brand SEM (search engine marketing) is a common tactic best suited for nested modeling. By nesting Brand SEM as a sub-model, businesses can unlock valuable insights into demand capture vehicles' contribution and reallocate media budgets to optimize marketing strategies effectively. This advanced modeling technique enables marketers to make data-driven decisions, maximize ROI, and gain a competitive edge in the ever-changing marketing landscape.

In today's interconnected marketplace, understanding the omnichannel customer journey is critical for marketers seeking to optimize their strategies. Omnichannel analysis can understand both the online and offline impact of sales data across various channels, including DTC, Amazon, wholesale, and retail. By harnessing the power of omnichannel analysis, businesses can gain comprehensive insights into customer behavior, measure marketing performance across all touchpoints, and tailor their strategies to deliver a seamless and personalized customer experience.

Privacy by design (PbD) is an essential concept in today's data-driven marketing landscape, ensuring that privacy considerations are integrated into every aspect of marketing analytics. It is critical for marketers to understand and protect Personally Identifiable Information (PII), By implementing PbD principles, businesses can navigate the fine line between data-driven marketing insights and consumer privacy, fostering trust with their audience. Marketers concerned with PbD will find that marketing mix modeling (MMM) offers a privacy-conscious solution to optimize their strategies effectively while safeguarding sensitive data.

The quality of data is a critical aspect that significantly impacts the effectiveness of marketing analytics and marketing mix modeling (MMM). Data quality is critical for marketing analytics, as it influences the decision-making processes and the accuracy of insights derived from MMM. By ensuring data integrity, consistency, and reliability, marketers can unlock the full potential of their data-driven strategies, make informed decisions, and drive successful marketing campaigns.

In the ever-evolving landscape of digital marketing, understanding the intricate relationship between media reach, retargeting efforts, and customer retention is paramount for businesses aiming to foster long-term customer relationships. Marketers must understand the journey from acquiring new customers to nurturing existing and returning ones, facilitated by strategic consumer touchpoints, repeated digital advertising, and the eventual development of customer loyalty and repeat purchases.

Software as a Service (SaaS) solutions have emerged as indispensable tools for driving performance, optimizing campaigns, and extracting actionable insights. There are many considerations surrounding the adoption of SaaS solutions by marketing teams. Regardless of a brand’s maturity, it is important to consider accelerating growth through the adoption of new tools.

Consumers have become more aware of their data and are concerned with how marketers are leveraging that data and surveilling consumers. Additionally, black-box solutions have emerged to leverage this data and provide recommendations to marketers without the ability to "show the work." Modern marketers must understand and further the goals of data transparency, how it transforms data governance, and ensure accountability in a landscape where information fuels innovation.

As advertising landscapes expand to encompass both traditional linear and modern OTT platforms, the challenge of measuring performance and understanding the interplay between these realms becomes paramount. Unified measurement and identity offer a solution by providing insights into how OTT and linear TV compare in impressions, incremental reach, average frequency, and conversion rates. Unified measurement is a critical tool to help marketers reconcile across multiple channels, understand the overlap between OTT and linear advertising, and drive effectiveness via cross-platform strategies.

Validation helps maintain confidence that data and analysis are accurate and plays a pivotal role in marketing mix modeling. Validation can build confidence in optimizations from any analysis.

The maxim "What You See Is What You Get" (WYSIWYG) has found a transformative resonance in the world of data analysis, thanks to innovative Software as a Service (SaaS) techniques. It empowers non-programmers to wield the power of data analysis without the need for extensive coding or data science expertise. As SaaS platforms evolve to democratize insights, the WYSIWYG approach offers a bridge to informed decision-making and data-driven success.

Sometimes profitability is prioritized over brand growth. When a brand is looking to tighten budgets and maximize returns, Marginal Return on Investment (mROI) is a great way to optimize the media mix. Analyze each media vehicle and identify the marginal return on each incremental investment. While this will limit the media vehicle from reaching maximum potential, it will ensure that each media variable is optimized to the most profitable level. As businesses grapple with the decision to focus on overall profitability or pinpoint the best next dollar spend, a nuanced understanding of the tradeoffs involved becomes paramount. The pursuit of one objective often comes at the expense of the other, and when maximizing profitability, mROI helps identify the most profitable media mix.

To maximize growth, brands must look to maximize their Return on Investment (ROI) for efficient additional marketing channel investment opportunities. While this may sacrifice some profitability, incremental growth can is needed for most businesses to survive. Share of marketing growth tends to equal the share of marketplace, so the only way to increase market share comes from increasing the share of voice. Maximizing investment at the highest end of ROI is the most efficient way to accomplish this.

Zero coefficients signify that a factor or variable has no impact on an outcome. Much of marketing analytics is focused on understanding the impact of marketing on KPIs, like sales or brand metrics. How do we combat correlations and misinterpretations of data that make false assumptions of impact? We leverage zero coefficients. Good marketing analysis also considers the possibility that marketing had no impact. Once we can validate that the zero coefficient is false, and marketing had an impact, we can be confident in our findings.