It’s a rare brand that has all its marketing channels managed under one roof. Far more typical is the model where some channels are managed in-house, and others are managed by one or more ad agencies. Perhaps digital and traditional channels are at separate agencies, or brand marketing and direct-response marketing are similarly split. Or maybe different lines of business, business units, or geographic divisions engage with different sets of agency partners.
The result can be a measurement nightmare, made increasingly so by the number of channels and sources of performance data, as well as the infrastructure that may or may not be in place to normalize that data to a common set of apples-to-apples success metrics. All too often the following scenario plays itself out, resulting in extremely misinformed conclusions and misinformed media optimization decisions.
The brand engages with three different agencies: one for search, one for display and one for affiliate. Over a given time period, each of these channels reports having been responsible for 200 conversions based on a “last click” measurement methodology. When this total of 600 conversions is compared to the brand’s internal CRM system, it’s found that it comes up 25 conversions short of the 625 figure recorded by the CRM system over the same period. So the missing 25 conversions are chalked up to “brand equity” – or conversions that were produced without the aid of any marketing initiative. The brand and its agencies go on to make their future media-buying decisions based on this information.
However, had the right centralized measurement technology and infrastructure been in place, it would have been found that 150 of the 625 were created by brand equity, 75 were produced by affiliates, 300 were produced by display and 100 were produced by search. So not only were the conversion figures that were based on last click just plain wrong, but they contained significant duplication (counting 600 conversions among them, when only 475 were produced). Obviously, brand strategists would make very different media-buying decisions – as well as assessments of the respective agencies’ performance –based on this more accurate set of metrics.
So What’s the Solution?
The solution is centralization of the measurement function. Whether it’s within the brand organization itself, within the brand’s agency of record, or via a contractor/consultant, there needs to be a single source of truth for holistic ecosystem measurement – preferably one without any “skin in the game” for the success of any channels it directly manages. This centralized resource would be responsible for implementing a measurement technology and putting a data collection/integration infrastructure in place, so that data coming from multiple agencies would be normalized to a common set of success metrics, de-duped and measured by fractionally attributed metrics, rather than last-click metrics.
Innovation is Happening, But Challenges Do Exist
Frankly, although agencies have been innovating and getting better at managing technology on behalf of their clients, they typically have difficulty attracting and retaining technology talent. As I discussed in my last column, some serious technology innovation, execution and scale are required to do the measurements right. Agencies also typically work on a model where they have to bill their clients against full-time employees dedicated to their account – which is tough to justify if the person’s role is measurement infrastructure. There’s also the real or imagined “fox guarding the hen house” concern over an agency responsible for some of your channels being the one that delivers the success metrics that it and your other agencies have produced.
Consider the options: in-house, contractor/consultant or a trusted centralized agency partner – but move toward centralization and integration of the marketing measurement function with all due haste. Those who don’t are already at a competitive disadvantage to those who are getting there.
by Anto Chittilappilly
Anto Chittilappilly is Co-Founder, President & CTO of Visual IQ, a cross-channel marketing intelligence software company that provides attribution management insights and recommendations needed to successfully optimize campaigns and deliver maximum ROI for organizations’ entire marketing mix.
Courtesy of MediaPost