What Are Marketing Metrics?
The term “marketing metrics” refers to the practice of measuring a company’s progress over time, through monitoring and recording data. Although the actual form these metrics take will depend on the platforms being used, what they all have in common is the goal of tracking successes and failures. It can be said that a company’s marketing endeavors are only as productive as its ability to properly measure them. A thorough understanding of marketing analytics is a crucial factor in making optimum use of marketing dollars. As well as providing information regarding sales, revenue, and lead generation, such data can also impart insights into consumers’ wants and needs, current patterns and trends, and regional preferences. By analyzing this data, companies can create advertising based on which campaigns have yielded positive results in the past, veering away from those with poor showings, in order to optimize the likelihood of success in the future.
There are a number of methods that can be employed in the field of marketing analytics, including media mix models, which examine data over extended periods of time, multi-touch attribution, which gathers data spanning the buyer’s journey, and unified marketing measurement, which can be used to integrate other models into a comprehensive metric of engagement. As well as the obvious benefits of tracking the effective use of digital channels and social media platforms, the strategic employment of analytic data allows companies to make informed decisions about branding, product development, and other aspects that will allow their products to stand out in an over-saturated marketplace. Although it may be tempting to focus on the numbers, a company needs to remain connected to the human element of its business, as well. As observed by marketing strategist, Mark Robinson, “Creating an environment that revolves solely around metrics creates stress, lower engagement and lower productivity. In essence, if meeting benchmarks is the only thing that the firm seems concerned about, then the business will suffer.” (https://www.cio.com).
Why Do Metrics Fail?
In this day and age, metrics have become indispensable to the progression and smooth functioning of any company, providing means to gather an unprecedented quantity of data in order to discover trends, adapt to the needs of its consumer base, and determine the success or failure of its advertising campaigns. Metrics, however, no matter how detailed they may be, are not capable of telling a company’s story in a wholistic manner. Simply stated, metrics often fail to be reliable indicators of what is transpiring on the marketing scene. This is especially evident when it comes to social media campaigns. Analytics having to do with numbers of social shares and numbers of followers can be especially misleading, since they do not pinpoint the truly cogent facts. Going beyond the metrics, determining who is sharing what content on which platforms is what ultimately matters. And numbers do not necessarily indicate influence; a profusion of followers rarely translates to an equivalent degree of true engagement. Similar concerns apply to site-traffic and time-on-site statistics, as well. By confusing correlation with causation, it becomes all too easy for companies to jump to conclusions, interpreting analytics in ways that reflect what they want to see, rather than what the reality actually is.
It can be difficult to avoid the pull of “vanity metrics,” also referred to as “engagement metrics,” not only on social media, but also in other areas of content marketing and digital advertising. As content manager, Daniel Hochuli, warns, “As far as the numbers go, vanity metrics look great on paper, But the sheen on these numbers fades when you use them to explain important business outcomes like ROI or customer lifetime value (CLTV); they become hollow digits that contribute little substance to proving your marketing is making money.” (https://contentmarketinginstitute.com).
(Courtesy of BrianBalfour.com)
Positive numbers are seductive. When companies place too great an emphasis on them, however, they run the risk of losing sight of the bigger picture. Metrics can prove to be dangerous when entire systems are developed around analytically derived data. Brian Balfour calls this the “Wheel of Meaningless Growth.” This is why it is crucial to begin measurement methods with specific goals in mind, at all times maintaining an awareness of their limitations and of the possibility of forming misleading conclusions based on their results.
Sidestepping the Pitfalls
With such a great number of analytic methods available, it can be a difficult task for companies to choose which ones to employ. A useful rule-of-thumb is to concentrate on measuring what matters the most, by identifying primary goals, and limiting marketing metrics to the ones that are most relevant to those goals. When companies track the wrong numbers, important opportunities might be overlooked. This is why the practice of focusing on a limited number of key metrics outweighs taking on quantities of less important ones. In this effort, it is also helpful to focus on forward-oriented planning strategies, rather than relying on what has yielded high numbers in the past. Concentrating on key performance indicators (KPIs), to determine if goals are being met, is a good way to accomplish this.
In general, companies need to be sure that the analysts they hire are up to the job of prioritizing the metrics to be employed, and that they are capable of interpreting the data skillfully. As marketing analysts, Carl Mela and Christine Moorman, explain, “The gap between the promise and the reality of analytics points to a disconnect that needs resolution. Companies need to better align their date strategy and data analyst talent to realize the potential that analytics can bring to marketing managers. In the absence of talent, even great data can lie fallow and prevent a firm from harnessing the full potential of the data.” (https://hbr.org).
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OTIS KOPP
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