I read an article in last week’s issue of Marketing Week which I found myself passionately agreeing with.
Jerome Fontaine of Fournaise Marketing Group suggested that judging by the results of their study into 500 marketing strategies and campaigns in the first half of 2015 and the way in which they are measured, over three quarters of marketers are “living in la-la land.”
The study found that 77% of marketers consider awareness as critical for proving marketing effetiveness, with 71% ‘proving’ effectiveness through engagement. In reality, as Fournaise points out, awareness and engagement are “nothing without conversion.”
The report goes on to state that the most alarming finding was that many marketers are focusing exclusively on Key Performance Indicators (KPIs) such as website traffic, video views and open rates rather than sales, and that too many marketers are concerned with creating marketing campaigns that ‘stand out’ through creativity, media placement or innovative digital activity.
In my view, all of these aspirations and measures are important, but I agree with the report that the most critical measure is sales – if marketing isn’t increasing sales and profit then it is simply not doing its job.
There are two common problems when you come to measure marketing effetiveness. Firstly, there can be a long time lag between the campaign and the sales, and secondly it can be hard to isolate the impact of a single piece of marketing activity when there is so much else going on in the marketplace at the same time.
This is, in my view why KPIs are valuable – they give us an early indication of whether the activity is having an impact amongst our target audience. If our marketing model suggests that we need to generate more web traffic in order to boost sales, then an activity that doesn’t increase traffic is unlikely to deliver more sales.
However (and this I think is the crux of the matter), the opposite is not necessarily true – an activity that triggers an increase in a KPI may not generate extra sales. KPIs are only indicators, based on our model and the assumptions within it. We must track all the way through to sales and use this not only to prove effectiveness, but also to improve our model which in turn will allow us to be more confident that a good KPI performance will result in sales and profit growth.
As Marketers, we must get out of la-la land, and take ownership of the business result.
Chris