Successful measurement of marketing is not necessarily about picking a particular methodology, but about understanding the hierarchy of metrics and defining this for your business. This is according to an IPA-commissioned white paper on measurement strategy, created by Gain Theory and delivered at the cross-industry Eff Week conference today (9 October).
A cross section of senior marketing and insight professionals from 40 brands were interviewed, representing a UK advertising spend of more than £7bn. They were clear that not all metrics are created equal, and just because you can measure something, does not mean you should. Instead, they talk about a hierarchy of metrics, of which profitable growth tops the pyramid. However, there was a clear awareness among the interviewees that these metrics do not exist in isolation and while growth in profits might be the key metric, others are important because they ladder into, and contribute to, this ultimate KPI. The result of this means that profitable growth depends on another set of metrics, all of which need to be measured.
As exemplified in the report, growth in profits is key – and one route to achieve this is to increase market share; market share might be driven in turn by improvements in brands strength, which might then be driven by better marketing, for which marketing effectiveness might be improved by enhanced creative.
For successful measurement, it is therefore important to acknowledge three key lessons:
Coupled with raising awareness of the hierarchy of metrics, the paper outlines three additional pillars that drive successful Effectiveness Strategies:
Jon Webb, Managing Partner at Gain Theory, says: “To ensure that marketing is as effective as possible, its impact must be measured. Having the right Marketing Effectiveness strategy will help marketers create the right culture, make the right decisions, avoid wastage and maximise impact. In creating this paper, we hope to generate momentum and provide useful direction around the marketing effectiveness strategy conversation, to help marketing and insight professionals maximise the impact of marketing from an advertising and broader marketing point of view.”
Janet Hull OBE, Director of Marketing Strategy, IPA, says: “As part of our overall Eff Week findings, we have clear evidence of the need for, and benefits of, an effectiveness culture within organisations. Thanks to this White Paper, we also have a comprehensive check-list of how to embed a strategy to enable this.”
The White Paper ‘Measurement Strategy – getting to best-in-class effectiveness’ is available to download from the EffWorks website. You can also join the conversation on Twitter #EffWeek @EffWorks