Now that you know why OmniChannel Digital Advertising will propel your organization forward, and you know how to use it, we’re going to focus this part of the blog series on measuring its success.
“Too often we measure everything and understand nothing.”
– Jack Welsh
This is at the heart of many organization’s challenge with achieving results in digital advertising. They are keeping count of so many things that they get lost in what is important. Many agencies use these metrics to hide the reality of their campaign results.
This blog seeks to demystify how to measure success and help you create a successful advertising environment.
As described in detail in a previous blog , success in advertising reduces to two metrics: Result Rate (RR) and Cost Per Result (CPR). Everything else is ancillary.
It’s not that those other metrics (Impressions, page views, engagement, etc) are not relevant; they are. But they are only relevant in context to RR and the CPR. We judge them only to determine how they are affecting our RR and CPR.
Defining RR and CPR
To calculate the Result Rate or the Cost Per Result, we have to first define the “Result” itself.
Result – The “intended action” or physical step you want a user to take. For example, having a user filling out a form on your website.
Most organizations we work with loosely define the result they expect. Don’t fall into that trap.
Be a great marketer – be firm on what you want. Regardless of whether it’s as easy to track as the sale of a product, or as complex as measuring how many letters constituents sent to their lawmaker about a law you oppose, technology can help you measure.
Result Rate – the rate at which a targeted user is taking the intended action as predefined by the marketing professional. If the form fill is the intended action, Result Rate provides visibility on the frequency that forms are being filled out, in relation to how often people see the form.
Notice that Result Rate is dependent on your ability to measure the intended action and the step preceding it. In our example, you’d measure the number of form fills in relation to the number of users that visited the webpage that contains the form.
The formula would look like this: (Form Fills/Landing Page Views) x 100 = Result Rate as a percentage.
Cost Per Result – the total digital advertising costs it takes to generate the intended action. This can be simple: It took us X dollars in Facebook advertising to generate Y number of email sign ups. It can be complex: It took us X dollars in Facebook advertising to remarket the right audience. The remarketing cost us Z, which lead to a result of Y.
The formula should look like this: (Total Cost of Advertising Specific to intended Result/Total Results) = Cost per Result as a dollar value.
Outside of our eCommerce clients, most of our clients have varying needs. Some of them want more members, others want to influence public policy, while some want visibility on a key message to drive behavior somewhere else in their marketing process.
There is no one size fits all, so “industry averages” are somewhat meaningless. Many agencies use “Industry Averages” to set a low bar. No need to do any of that.
If you have historic data on your previous advertising campaigns, start by organizing them as described above. Figure out how many times the Result you wanted actually occurred. Find an easily identifiable preceding step that you have data on. And gather the total advertising spend you incurred to achieve those results. Between those three data points, you have a baseline. Your baseline becomes your starting point for achieving great success in OmniChannel digital advertising.
Your baseline will look different than other organizations.
Other organizations may be more sophisticated than you. Their messaging may be better, they may be spending more on awareness, etc. Don’t judge yourself against what they are doing. Focus on judging your successes against your baseline.
We seldom work with clients that have the exact same required result. We also seldomly work with clients that have the same baselines for Result Rate and Cost Per Result. Often, we start our engagements with developing their baseline by looking at their historic data.
Successful OmniChannel digital advertising steadily reduces your Cost Per Result.
The cost per result should steadily decrease because the instances of digital advertising you are performing to achieve that result should steadily be optimized.
Also, the rate at which you are achieving those results (the Result Rate) should also be going up. This happens because you are reducing poor performers (ads, targeting, platforms) and focusing your advertising dollars on the most successful ads.
Once you’ve generated a substantive amount of data around the Result Rate and your Cost Per Result, you can now start predicting the future of your advertising spend. That first time you can statistically show your boss how the next few months of results will be is a game changer moment.
Technology Required to Measure Success
There are a myriad of technology tools that help you measure success. Given the explosion in digital advertising, the list of technology products continues to grow. We’ve provided some guidelines and tools that can help you wade through the products and make an informed decision.
Free verses Paid tools
We’re often asked whether the advertising platform tools and Google Analytics are enough to measure, and track success.
The simple answer is no.
To correctly measure success, track its progress, and identify areas for improvement, you need a data management tool. These tools allow you see data from multiple angles, organize them, perform calculations on them, and store historical data so it can help inform your future decisions. You can attempt this work in Microsoft Excel, but you’ll have to manually update the data every day and that is a ton of work.
Getting your measurements in place and picking your technology to organize/report on your data allows your experts to shine. These are the areas you need expertise in.
Platform Experts – each advertising platform works slightly differently. As discussed in our previous blog, the platforms organize into 3 major segments (Search, Social, Display). You’ll need expertise in the placement of your ads so you are precisely targeting your audiences. Not doing so will directly affect your Cost Per Result and your Result Rate. You also may generate “bad data” or results that are not relevant to you or your organization (i.e. having the wrong person fill in your form).
Data/Statistics Experts – as the advertising campaigns produce data, you need experts (data scientists) to review the resulting data and identify changes that will help make the campaigns perform better. This is the heart of what creates great digital advertising results. Experts pivot the data on key data points to find reasons why the Results you seek are (or are not) happening. They can then look across the OmniChannel approach to identify enhancements to the current structure of the campaigns.
If you’re serious about changing the trajectory of your organization, develop an effective OmniChannel Digital Advertising Strategy.
Before you launch the accompanying digital advertising campaigns, make sure you can effectively measure each step and relate them back to your goal.
Measuring the success of your OmniChannel Digital Advertising effort requires specialized tools and expertise. When your organize brings these elements together, you can visualize your success, your weaknesses, and begin predicting what your future results will look like. That pivotal moment when you can see the effect of your future advertising spend is transformational.
We do this work for our clients every day.
We’ve transformed organizations, bringing them to the forefront of make policy changes, we’ve dramatically increased revenues for organizations, and we’ve helped marketing team generate engaged leads by using a powerful OmniChannel approach. Contact us to learn how.