Just because your marketing metrics work doesn’t mean they’re ideal. All too often marketers overlook metrics that could deliver greater customer engagement and increase ROI. The reasons? Many marketers get hooked on metrics that are easy to use, or they simply follow the established “that’s how we’ve always done it here” protocols.
Well, it’s time for a change.
That doesn’t mean you have to blow up what you’re doing and start from scratch. It does mean, however, that you need to get comfortable taking some calculated risks and try new metrics, such as cost per acquisition (CPA). We call them enhanced metrics because they guide marketers farther and faster along the path to true customer engagement and better ROI.
Here are five steps you can take to uncover and use the enhanced metrics that are right for your marketing organization.
1) Have the courage to think differently about metrics. Just because it’s easy, doesn’t mean it’s good. Many marketers have been trained to look at metrics that are easy to track, but often don’t really matter. For example, some marketers are so accustomed to looking at CPM and impressions, they often don’t consider harder-to-measure but more impactful metrics KPIs such as engagement.
2) Understand your company’s overall business goals. Your marketing goals need to align with and support those goals. For instance, if one of your company’s objectives is to increase sales by 15 percent, your branding campaign, while important, may not help achieve that on its own. Instead, you may need to craft a multichannel campaign that layers branding, behavioral targeting, and retargeting to drive consumers quickly through the funnel to a purchase.
3) Get specific when defining your target audience(s). Do you really want to target “moviegoers” for your Indy film? Not all moviegoers will be interested in your film, so you could be wasting marketing dollars despite a low CPM. The trick is to balance specificity with scale. Instead of targeting all moviegoers, use attitudinal attributes to model lookalikes based on the audiences of similar films to find the people mostly likely to see your movie. Contacting those consumers will increase your CPM, but the more targeted audience will deliver better overall results.
Conversion and engagement aren’t about the amount of interest (I like going to movies), but the intensity of that interest (I love Indy films about issues that are important to me). Think of it in a different way: Why target people with noses during allergy season instead of targeting allergy sufferers?
4) Be patient. Run campaigns longer. Don’t expect the results you get on the first day to be indicative of what’s possible if you give your campaigns more time to work. Often marketers stop running a campaign as soon as they see higher than expected CPMs instead of letting the campaign play out to the point where they can measure engagement. Patience can be hard to come by when you’re pressured to get things out and execute every day. It takes a savvy marketer to have both the patience and the acumen to wait to see engagement and, ultimately, business results.
Use benchmarking to determine how long to wait to get to engagement, because running a campaign for too long can deliver diminishing returns.
5) Compare apples to apples, not oranges. Testing is a marketer’s best friend. It will help you determine what matters and what doesn’t. It will help you create the benchmarks you need to have the patience to run campaigns longer. It also will help you find the metrics that are right for your marketing organization.
Consider as an example the approach some direct-to-consumer (DTC) companies are taking with their digital advertising. They’re moving to performance advertising, which means shifting from proxies and impressions (e.g., CPM and CPC) to towards specific business outcomes such as new customer acquisition. (e.g. CPA). According to LUMA Partners, these DTC companies now consider advertising as a profit center, including it as a cost of goods sold on their income statements.
When you target specific audiences versus general ones, you greatly increase the likelihood that you’ll reach and convert higher-value customers. And when you use metrics such as CPA or eCPA (effective CPA) as an optimization metric, you’ll greatly increase your ability to track and improve your ROI. Metrics such as CPM may be what you’re used to, and they may be easy, but it’s unlikely that your campaigns will reach their full potential if that’s all you track.
P&G cut more than $200 million in “largely ineffective” digital advertising with no impact to its growth. You may not be ready to be as bold as P&G, but you can start making big improvements to your marketing performance by making small changes. Adjust your targeting to more specific audiences. Begin testing engagement metrics such as CPA. Set benchmarks and have patience. And watch your ROI start to increase as a result of reaching more engaged consumers at the moments they’re most likely to take action.