Measuring the impact of marketing campaigns and proving marketing ROI is challenging. Businesses, on average, spend 11.2% of revenue on marketing, and if you’re unable to or don’t measure the impact, you’re wasting resources.
The big question that you need to answer is: How successful your marketing campaigns have been?
There isn’t any straightforward technique to measure marketing performance. Marketing experts have different opinions on how exactly to measure marketing effectiveness.
Volume PR asked 26 different marketing experts to share their best advice on how to measure the marketing effectiveness of marketing campaigns. Some suggested to track marketing metrics, others rated customer acquisition cost as the most crucial metric, a few recommended tracking ROI, and so on.
There isn’t a single best answer.
And this makes measuring marketing performance and its effectiveness an overwhelming task.
The following step-by-step guide will help you track marketing performance, its impact, and the marketing effectiveness of your campaigns.
Before moving to the actual steps, it’s important to make a few things clear up front – to ensure we are on the same page.
What is Marketing Performance?
These are the same variables that represent overlapping underlying construct. Yes, these three might be different in some aspects but all these three variables measure some kind of marketing success.
The terms marketing efficiency, marketing effectiveness, marketing productivity, and marketing performance are used interchangeably in marketing literature. However, these are different but related constructs.
Marketing performance is a broad term that is defined as:
A multidimensional process that includes the three dimensions of effectiveness, efficiency and adaptability; the effectiveness and efficiency of an organization’s marketing activities with regard to market-related goals, such as revenues, growth, and market share.
In simple words, marketing performance defines the relationship between marketing activities (aka campaigns) and business performance.
Marketing Performance ≠ Marketing Metrics
Marketing metrics are indicators that help measure marketing performance. Marketing performance is not the same as marketing metrics.
Marketing metrics are performance indicators that are used to track progress. Metrics are the means to measure performance.
One positive or negative metric doesn’t explain the complete marketing performance of your business. All the campaigns and metrics together reveal the true picture which helps measure overall marketing performance.
Marketing Performance ≠ Marketing ROI
Marketing ROI is one of the most essential marketing metrics. But ROI is not the same as marketing performance.
ROI reveals the return on marketing spend and a positive return means you have earned more than what you have spent on marketing. This makes sense.
But if you’re only measuring ROI and using it determine marketing performance, you’re making a big mistake.
Marketing today is about UX and micro-interactions. Your target audience and customers interact with your brand through several channels online and offline. Not measuring these interactions is a lethal mistake.
This has been discussed in detail by Daniel Kehrer here.
In a nutshell, ROI is just a metric and should be considered as such. Don’t confuse it with marketing performance or marketing impact.
Steps to Measuring Marketing Performance
Now that the stage is set, let’s move ahead and discuss the actual steps to measure marketing performance.
Step #1: Identify Marketing Campaigns
The easiest approach to measuring marketing performance is to measure the performance of individual campaigns and then compare them.
At any given time, you could be running multiple campaigns such as Facebook ad campaigns, SEO campaigns, guest blogging campaigns, retargeting campaigns, and several email marketing campaigns.
Ideally, you need to track the performance of each campaign individually to measure its progress and take necessary steps for improvement.
Let’s list all the marketing campaigns. Identify all of them.
Even the ones that aren’t costing you any money or ones that aren’t essentially marketing campaigns. For instance, you could be sending recently published blog posts to your subscribers every week. This doesn’t cost you any additional money or resources because it’s completely automated.
No matter how many blog posts you publish, your list will receive the email.
Do you need to measure the performance of this blog update email campaign?
Of course, you do.
You need information on how many subscribers open, click, and read blogs posts. What percentage of subscribers engage with blog posts?
What if people who visit a blog post via your weekly email campaign are the only ones who leave a comment on the most recent blog post?
You’d never know it without measuring its performance.
Everything that you’re doing to interact, engage, and connect with your audience and/or customers across all touchpoints need to be measured.
So identify all such marketing campaigns that you’re running.
Step #2: Identify the Right Metrics
This is the most critical part of the process.
Marketing campaigns are different. You cannot measure the success of all the campaigns with one or maybe two metrics. In fact, you need to identify the most suitable metric for each campaign.
If you’re running a display ad campaign, you'll be interested in metrics like conversion rate, CPC, and ROI. For social media posts, you need to measure engagement, likes, and shares. Similarly, SEO campaigns are best measured with backlinks, referring traffic, and SERP movement.
Your job is to identify the most appropriate metric(s) for each marketing campaign. And this is where things get a bit tricky.
There is no rule to ensure if a metric is right or wrong. There isn’t an alarm system that will warn you if you’re using an inappropriate metric.
So you’re the judge here.
The best technique to identify and track the most appropriate metric is to choose metrics that are relevant to the campaign’s objectives. Here is an example:
Metrics should be derived from the campaign objective. The metric should help you determine if the campaign achieved its objectives.
That’s how you measure success, right?
So if your campaign’s objective is to generate leads, track number of leads generated and conversions.
There are several marketing metrics that you can choose from. Here is a list of 70+ marketing metrics to help you choose the most appropriate metrics for your campaigns.
Step #3: Select an Attribution Model
In the words of Google, the attribution model is the rule that defines and determines how conversions and sales are assigned to different touchpoints.
A person interacts with your brand across several touchpoints before finally making a purchase. A visitor doesn’t convert right away on the first visit.
According to Retargeter, only 2% of visitors convert immediately after they visit your website for the first time. Remaining 98% leave your website.
These 98% of visitors will visit your website multiple times, follow you on social networking sites, and will interact with your business multiple times before they will finally convert.
Attribution model helps you streamline this process by clearly determining how to assign credit of such a conversion to different touchpoints. In the absence of an attribution model, you won’t be able to identify what actually made a visitor convert.
Crediting conversions and sales to the right channel is essential because it will let you measure the performance of each campaign appropriately.
There are different attribution models that you can choose from. Again there aren’t any right or wrong attribution models. You need to choose a model that goes best with your marketing strategy.
Here are the major pros and cons of different models and which one to choose for your business.
What you need to do is stick with a single attribution model (first touch or last touch). This will keep things simple. As much as 45% of businesses use a single attribution model. It is simple yet effective.
Attribution modeling can be handled with an appropriate tool. You can use Google Analytics which is free but not one of the easiest for attribution modeling.
There are other better tools that you can use to incorporate attribution models across all touchpoints. These include:
If you’re already using Google Analytics, there are default attribution models already set based on your funnel. Read this post to find out what’s your default attribution model is.
Step #4: Track Marketing Impact
Now is the time to practically track and measure marketing impact. Analyze each campaign individually based on the identified metric(s) and credit conversions and sales based on the attribution model.
Use all the tracking and analytic tools available. For instance, you have Google analytics to measure the impact of SEO campaigns, social media analytics (like Facebook and Twitter analytics) to measure performance on social networking sites, and third-party tracking tools that you’re using will reveal more details.
The idea is to track the impact of campaigns individually. Analyze each campaign based on its objectives and metric. Figure out if the campaign was successful or unsuccessful.
Finally, measure the impact of each campaign. This can be done by assigning a numeric value to the campaign based on its success and how much it contributed to achieving the overall marketing goal.
The impact is a variable that you need to quantify. Assign impact value between 1 and 10 to each campaign (where the highest value represents a high impact on marketing strategy).
The impact needs to be relevant to the overall marketing strategy of your business. You need to ask yourself: Does this campaign (despite all its success and massive ROI) helped us achieve our big marketing goal?
The more it helped achieve your overall marketing goal, the higher impact score it should have.
Step #5: Tweak and Repeat
The final stage in measuring marketing performance is identifying the best campaigns with the highest impact on marketing strategy.
These campaigns need to be further improved. Continue them to achieve more success.
The campaigns that weren’t successful needs special attention. The first thing you need to do is pause all such campaigns so as to stop them from consuming more budget.
Second, tweak them to improve performance.
The rule is simple: Do more of what works and less of what doesn’t.
Campaigns that did exceptionally well, increase their budget, replicate, and refine. That’s how you'll be able to outperform your competitors.
Here are some best practices to measure marketing performance that will save you a lot of resources.
Invest in Right Tools
You cannot track the impact of your marketing efforts without tools. You need them, and you need them badly.
Tools don’t just help in tracking and measuring but they provide you with actionable insights and heaps of data. You can use data for decision-making and conversion optimization.
For instance, your tracking tool might report that CTA buttons having black color converts at a 50% higher rate than other CTA buttons. Imagine if you aren’t using a tool to track CTA buttons and their colors, you'll have to do it manually and it might take ages.
Don’t hesitate to invest in marketing, tracking, analytics, and other tools.
Measure Campaign Performance in Real-Time
Don’t let campaigns consume the entire budget. Monitor performance in real-time so as to take necessary actions on time.
It’s useless to track performance after the campaign is finished. You cannot do anything now. If it performed well, consider yourself lucky. If it failed miserably, there isn’t anything you can do now.
Assign campaigns to different marketing teams so they can measure performance on a daily basis. This will save you a lot of resources.
You cannot measure marketing performance if you aren’t doing an awesome job at tracking. You need to track every touchpoint, every interaction, every click, every single visitor, and more.
That’s how you'll be able to measure true marketing performance.
Again, you need sophisticated tracking tools to do this which don’t come for free. Consider using one of these tracking tools:
Measuring marketing performance is challenging and this is the reason why a lot of marketers don’t do it at all. Some 39% of marketers say that proving ROI of their marketing activities is their biggest challenge.
No matter how challenging, you cannot move ahead without measuring marketing performance and understanding what works and what doesn’t.
Measuring marketing performance should be your top priority and it should be a continuous process. Don’t wait. Start now.