Complete Guide on How to Marketing Measurement

Despite becoming increasingly digital and data-driven, marketers still struggle more than their counterparts in other corporate functions to communicate the business impact of their work consistently. Marketing measurement tactics should be used regularly to track performance and gauge whether goals are being met.

There is clarity to be gained in defining a framework that introduces the concept of marketing measurement levels. The tools and outputs of each level are different, and they add value at different stages in the marketing funnel. Said another way, they answer different questions for marketers. It is important to match your question to the appropriate level of measurement, or you will get incomplete or even misleading results.

Article contents:

• What is marketing measurement?
• Why is marketing measurement important?
• Common challenges
• Four levels of marketing measurement
• The Risk of Channel-Specific Marketing Measurements

 

What is Marketing Measurement?

In the digital age, there are many ways to market and advertise products, services, and brands. You’re likely using several channels, like content marketing, social media, advertising, and public relations, as part of your marketing plan.

Marketing measurement quantifies the impact or effectiveness of overall marketing efforts over a specified period. Marketing teams and professionals can measure the performance of plans, channels, campaigns, and platforms. Using metrics, marketing teams can track, record, and analyze data to ensure they hit key performance indicators (KPIs).

Why Is Marketing Measurement Important?

Marketing measurement is critical for success. Without it, you will not be able to execute a marketing plan or campaign. Without key metrics, marketing teams will not be able to measure performance. Here are a few reasons why marketing measurement is so important:

Informed decision-making

Measuring marketing effectiveness provides marketers with the ability to make informed decisions. By looking at and analyzing data, marketers can make decisions based on the performance of campaigns or channels.

ROI

Measuring marketing can determine which channel, campaign, or platform yields the best marketing return on investment (MROI). Marketers should be tracking marketing return on investment and reporting on it to show success.

Budget allocation

In terms of dollars, Marketers can justify how to allocate their marketing budget. By measuring your marketing efforts, you can better prove the budget spent on marketing to your CFOs or finance teams.

Future marketing planning

Tracking and measuring data from past campaigns and plans can help marketers develop future plans. Marketing metrics evaluate past performance to help create an informed marketing plan to move forward with.

Provide Business Value

Measuring marketing effectiveness proves the value in terms of business impact. Marketers should use metrics to illustrate the impact on business revenue to better communicate with C-level figures and executives. This can be particularly useful when presenting marketing reports to your CEO or board members.

Common Challenges with Marketing Measurement

While marketers constantly rely on data and analytics to get effective results, there are some challenges that professionals can run into. Here are some common challenges that marketers may experience when measuring performance.

Data Attribution

Any effective marketing plan involves several channels working together to reach your goals. Multi-channel marketing adds a level of complexity to measuring your marketing efforts. Marketers can use several attribution models to measure multi-channel marketing efforts and get comprehensive insights. Choosing a multi-channel attribution model can help align how success is determined across multiple channels.

Misleading Data

When deciding which marketing metrics are key for tracking and measuring impact, it’s important to focus on KPIs that accurately reflect the success. By not choosing unimportant or irrelevant metrics, you risk measuring misleading results for your business.

Marketing Goals

Marketers’ most common issue is that their goals aren’t strong enough or not aligned with business goals. In either case, marketing measurement is worthless. A lack of clearly defined goals can affect marketing measurement. Consider using SMART goals (specific, measurable, achievable, realistic, and timely) to set clear marketing goals for your organization.

 

4 Levels of Marketing Measurement

The levels of marketing performance measurement are:

1. Plan
2. Campaign
3. Channel
4. Tactic

Here, the term “campaign” means a thematic campaign encompassing multiple channels, like a product launch, a thought leadership campaign, or a funnel nurturing campaign.

These levels are useful for answering different types of questions. In general, as you move down the levels toward tactical performance measurement, the more specialized and narrow the performance metrics will be (for example, CTR, white-paper download count, intra-channel content optimization, and even CPC).

As you move closer toward measuring marketing plans, the more strategic and business-oriented (for example, less specific to marketing alone) the results tend to be, and the easier it is to communicate performance to non-marketing colleagues.

Marketing Measurement Chart

Example questions for each level are shown in the table below to illustrate which types of questions are best answered by which levels of marketing measurement. The best answer to different questions (the rows in the table) lies at different levels of measurement (the columns in the table). The best measurement level for the question is shown in green.

 

Marketing Measurement Questions	Plan	Campaign	Channel	Tactic	Example Metric
Did we achieve our strategic marketing goals?					% of goal achievement
Did we generate a compelling plan ROI?					return on investment
Did we generate marketing metrics efficiently?					cost per outcome
Did we select the right target audience?					MQL, bookings, revenue
Did we select the right message for our target audience?					outcome by segment
What are our least / most effective campaigns?					outcome by message
Which campaigns deliver the best return?					return on investment
Do we have the right marketing mix?					metric achievement, ROI
Do we have optimal performance within a single channel?					metric achievement, CPO
Do we have the right sub-channel mix?					metric achievement, CPO
Which email sequence generated the highest CTR?					count of clicks
Which white paper generated the most downloads?					count of downloads

Yellow signifies a qualified benefit or an incomplete benefit from trying to answer the question at a suboptimal level.

For example, if we try to measure whether we have identified the best message for our audience using the channel as the measurement level, we can only really answer the question for a given channel. It’s true that the expression of a message and audience is shaped by the channel, but the correctness of the overall audience and message selection must be measured at the campaign level and then tuned for delivery over each channel that will be utilized to deliver the campaign.

Example: Imagine a credit card marketing campaign whose goal is to encourage people who travel a lot to switch from their current card to the new ACME card. The campaign message broadcast over the TV channel (“ACME card gives you double points for hotel bookings, and you can convert the points to air miles”) is different to the message for the direct mail channel (“Congratulations Mrs. Nguyen, you’ve been pre-approved for an ACME card. Fill in the application form and get 6 months 0% interest on any balance transferred”). These are different messaging elements of a broader campaign messaging strategy. If we only measure at the channel level, or we measure channel-first (versus campaign-first) we are going to only see a part of the picture. If we measure at the campaign level, we can draw the threads from disparate channels together into a more informative, complete measurement of performance.

Red signifies a specific risk in trying to answer the question with measurements from this level.

You will likely harm your marketing insight overall if you try to answer the question by measuring at this level.

Example: A credit union is trying to increase the proportion of its members who take out a car loan with them. They implement a campaign over billboards, print ads, local radio ads, and digital. A channel-first measurement approach will attempt to work out the independent contributions of each channel. But how do you measure how much billboards contributed versus print ads versus digital? And how to tell whether someone who clicks the Facebook ad has already heard a radio ad and seen the billboard too? It’s possible to spend a lot of effort gaining an incomplete view focused on just one channel vs measuring results in aggregate at the campaign level and asking the question, “Did more people sign up to auto-loans after we executed the campaign?” That is the first-order question.

You may notice that measuring channel-first is suboptimal for several common and important questions shown above. As a practical matter, marketers need to understand what is best-measured channel-first because there is a channel-first structure in many organizations that can inadvertently lead to trying to answer too many – or the wrong kind of – questions with channel-level measurement of marketing.

The Risk of Channel-Specific Marketing Measurements 

While channel-oriented marketing measurement is extremely common, there are certain risks or dangers to be aware of.

Specialization of marketing channels

Consider a few marketing channels: TV, Radio, Print, Billboard, Digital Advertising, Social Media, and Events. The tools, skills, consultant networks, platforms, reports, and so on needed to orchestrate and run these campaigns are quite different.

It is not surprising, therefore, that individuals tend to become experts in executing campaigns over a subset of the channels. Events managers rarely also run digital campaigns, and vice versa.

Marketing teams are structured by channels

The reality of this specialization leads to teams being structured around channel expertise. Since budget allocations follow the marketing team structure, many teams allocate budgets by specific channel.

Furthermore, there are specialized, channel-specific tools, reports, and data for measuring marketing performance within a channel that cannot possibly encompass everything that went into a campaign. For example, ad platforms report ROI based entirely on ad spend and don’t capture the other costs that go into creating the ads that are ultimately published on the platform.

Channel-focused reporting

In a channel-oriented team structure, individual performance is likely to be managed by the marketing channel’s performance. Team members naturally become focused on the performance of their channel. They want to dedicate funds to that channel and prioritize reporting on how that channel is performing.

While there are many good things to measure in a channel, unless the campaign is entirely run through one channel, those measurements do not typically tell the company whether its marketing campaigns are successful or not.

Such an orientation can lead to a channel-level approach to marketing measurement. This causes marketers to ask channel-specific questions like “which channels are performing best/worst” rather than a global approach to marketing. Instead, they should ask questions like “Is this campaign achieving its target metrics and ROI” and “Are we achieving our key goals?”

Conclusion: Marketing Performance Measurement

The levels of marketing measurement covered in this blog add value at different phases of the marketing life cycle and for different individuals in the team. It’s important for marketers to bear the macro-measurement questions in mind (Is our marketing working? Are we generating a compelling marketing ROI? Which campaigns worked best?) and to organize their marketing teams and technologies to answer them.

Even if you have a channel-oriented organization structure and budget allocation, it is advisable to take a campaign-oriented approach to your marketing measurement, as this will expose on a campaign-by-campaign basis how channels perform and enable you to measure marketing ROI across all your marketing efforts.

At Planful, we encourage marketers to start with their goals, defined in terms of objective – preferably financial – marketing metrics. Then, build campaigns to achieve those goals, defining your desired outcomes in terms of objective metrics, achieved through messaging to a specific audience, delivered over the most effective set of channels you can define. What matters most is how your campaign performs in the achievement of those goals, given your budget.

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Dan Faulkner is co-author of The Next CMO: a guide to operational marketing excellence, and the CTO of Planful, where he is responsible for the technical strategy and delivery of the world’s first AI-powered marketing performance management platform. Dan has 25 years of high-tech experience, spanning research and development, product management, strategy, and general management. He has deep international experience, having led businesses in Europe, Asia, North America, and South America, delivering complex AI solutions at scale to numerous industries. Dan holds a Bachelor’s degree in Linguistics, and Masters degrees in Speech & Language Processing, and Marketing. He has completed studies in Strategy Implementation at Wharton.