Over 15 years of experience in Digital Marketing Measurement and another decade in Marketing ROI taught me that coming back to the basics is often essential to clarify what is at stake when it comes to measuring effectiveness. Indeed, to clearly capture the ins and outs of the measurement of digital marketing, it is essential to differentiate between the two concepts of Counting and Measuring.
Counting is what best describes the much-vaunted measurability of the Web. Back in the later 90’s, early 2000, the internet was presented from the outset as the supreme medium, where everything could be measured and therefore evaluated and whose effectiveness could really be ascertained. The celebrated “click” then seemed to be the best remedy against the need for evidence and measuring the impact of the first advertisers on the Web. “Advertise on my website and the number of clicks will show you how many people have been in direct contact with your brand.” An enticing prospect, since compared to the mass media that reach a huge audience but whose possible impact (following advertising exposure) is not directly measurable, the argument for advertising on the Internet is particularly persuasive. But before long, click-through rates quickly fell – for advertising that was novel initially is no longer so, and has even become intrusive as banners are transformed into pop-ups, and then into interstitials, to increasingly force exposure – and are today on average well below 0.5%.
And even if internet penetration is still growing and progressing, it is difficult to obtain an audience coverage as strong and instantaneous as that offered by television. Therefore, for websites and the profession in general, it was necessary to show as quickly as possible that on the Internet one could “measure more” and provide more indicators and metrics… And all of sudden the Internet had become “the most measurable of all the media”. In actual fact it is very easy to count everything, or almost everything (the number of visitors and visits, time spent, the number of impressions delivered by the campaign), but more difficult to measure an effect, especially when it is indirect. But despite this, very quickly the false truth that “on the Internet you can measure everything” entered into advertising agencies’ claims and promises of “results”, and the reputation of the Internet was assured, or almost so. Yet when one tries to demonstrate that “it works” and that it is “effective”, especially for campaigns that do not have specific online sales targets and which are therefore not directly measurable, it is much more difficult to measure the effects.
Since then, fifteen years have passed. Internet penetration and accessibility are high, media consumption is increasingly fragmented, and young people born in the era of the Internet, the famous Generation Y, cannot manage without it. The Internet, and more recently social networks, accompany them everywhere through their mobile phones (cf. “SoLoMo”: social-local-mobile). Digital media are becoming indispensable, and brands are beginning to take them on board and increase their online investment. But as I have said for years, this progression will continue to grow only on condition that measuring rather than simply counting becomes the rule for all web actors.
Measuring means first and foremost establishing clear marketing objectives, identifying the most appropriate metrics, assessing the achievement of these objectives (awareness, image, sales?), and setting up the most pertinent measurement system (and not just “counting” on the basis of the sometimes appropriate, sometimes too limited metrics from Web Analytics); measuring, evaluating and correcting in order to advance and increase the effectiveness of digital marketing. Measurement comes at a price, primarily that of discipline. But ROI is only stronger for it; and it allows a “balancing of the books” at the end of the campaign for the benefit of all stakeholders: brands, agencies, media and measurement providers. To this end, I believe it is useful to a few paragraphs to the key stakeholders in the measurement of effectiveness and, more generally, in digital marketing, because their profession, role and position in the « digital marketing » value chain keep up to date expectations and sometimes assumptions, which are often different from the notion of “effectiveness monitoring”.
Users of ROI measurement and their needs
There are generally four types of actors in the digital marketing value chain: the advertiser, the advertising or “digital” agency, the media agency, and the measurement company (usually a research company). A fifth participant may sometimes be inserted between these actors, usually at the request of the advertiser, adviser or consultant, who may recommend an approach or process suitable for the establishment of objectives and therefore of appropriate measures. We will simply highlight here the needs and roles of the Marketer and its Agency.
The marketer is naturally the party who has the greatest interest in monitoring effectiveness. Indeed, brands invest in digital media (and other media) in order to build and maintain their presence and brand equity, whatever the objective targeted, e.g. branding, esteem, the acquisition of new customers or developing the loyalty of existing customers. The brand must set clear marketing objectives to its agency. The agency will then be responsible for developing and executing a plan (the copy strategy) to achieve them. The measurement of effectiveness should be directly related to the monitoring and attainment of these objectives. Such monitoring is essential, and should allow:
– The return on investment to be evaluated;
– Lessons to be drawn so as to further optimize the impact of actions;
– Past and future investment to be justified.
The effectiveness monitoring stage would seem to be indispensable, but in fact this is far being from the case. Cumulative experience and studies show that the majority of companies have no process in place for managing and genuinely evaluating their marketing investments. For the most part, they do not incorporate metrics into the daily management of their marketing activities. Conversely, companies that are leaders in their markets have established a more documented and quantified approach to the impact of their marketing investment. Such companies benefit from a real competitive advantage . My own consulting experience, variously in Europe, the United States, and Asia confirms these conclusions. It is generally not so much digital marketing and its supposed measurability that dictates the advertiser’s monitoring process than the culture of the company itself. Typically, the more the company is accustomed to metrics for managing, the more it will seek to incorporate the measurement of the effectiveness of digital marketing. A good example of this is provided by Procter & Gamble (P&G), the largest global advertiser. Conversely, other companies less accustomed to measuring and managing their business by means of metrics have more difficulties, but they too have less and less choice.
Are effectiveness measurement and agency creativity compatible?
Within agencies, the question of effectiveness measurement is not new, nor is it confined to digital media. I remember my first years in the profession, in the early 1990s, at a time when international advertisers were beginning to intensify the globalization of their marketing practices; the standardization of advertising’s effectiveness measurement already animated many debates. More than twenty years later, the world’s leading advertisers have accepted the need to manage and measure the effectiveness of their advertising, particularly in the area of consumer goods. So what bearing does all this have on the Internet?
Paradoxically, as we have already discussed, digital marketing is often poorly evaluated, as the metrics are not necessarily always appropriate to the objectives and often not adequately assessed. Indeed, the rapid deployment and lower cost of digital marketing campaigns (compared to other media) too often lead to the effectiveness monitoring stage being neglected. This is sometimes considered too expensive (given the cost of the campaign itself). Yet if monitoring is omitted, it is difficult to judge the effects of the campsaign and therefore to justify the digital investment. In actual fact there is currently a fundamental trend in which the most prominent agencies are aiming to include more metrics in their service offering. An again, there is often a confusion between « Counting » and truly « Measuring ». Indeed, as audience reach is related the ability to target the right audience, counting is a more natural discipline than measuring (valuing the impact of the action on the targeted audience). Agencies have long to go, but the leaders that will emerge will make measurement a central point in their service offering to advertisers.
The Way Forward
All in one, I strongly believe that people, companies, and consultants, involved in some ways in the measurement of digital marketing ROI have a bright future in front of them, but only if they are able to truly embrace the broad spectrum of potential effects of Digital. To this end, measurement needs to be driven by a clear set of Objectives understood by all actors in the digital marketing value chain: the marketer, the advertising or “digital” agency, the media agency, and the measurement company. Then, only the right set of metrics may be selected and agreed by all stakeholders to measure not only short term and action driven initiatives (conversions, sales) but also the full effects of digital (in isolation or with other media) on the brand: from Awareness, Image, to Consideration and Engagement. The future of Digital is at this price. Even if the « Data becomes Bigger and Bigger », it is only its actual connection and use towards true measurement that will make it worth, so Marketers, let’s make sure that you really Measure rather than just Count!
 See the excellent book on the subject, Competing On Analytics: The New Science Of Winning, by Thomas H. Davenport and Jeanne G. Harris, 2009.