Are you measuring the wrong metrics in your marketing campaigns? Find out the four common mistakes marketers make, and why they are so dangerous.
There are two important parts of successful marketing. The first is planning and creating impactful marketing that will be seen by and appeal to the right people at the right time. And the second is accurately measuring your marketing so you can maximise your ROI going forward.
In this article we will look at the latter: measuring your marketing. And more specifically, we will look at four of the most common mistakes advertisers make when measuring their marketing.
So what are the mistakes that you need to avoid?
1) Not tracking and reviewing your results
The first mistake is simply NOT measuring your marketing ROI. It could be that you don’t have any tracking set up, that your ability to track is inadequate or limited, or that you are tracking your results but not reviewing them and using them to inform your strategy and budget allocation moving forward.
So what metrics should you be tracking and reviewing? This will partly depend on the goals of your marketing activity. For example, are you looking to grow your new customer rate? Or retarget existing buyers and grow your customer lifetime value?
Given this, it is important you are able to track results throughout your full customer lifecycle. If you are running digital advertising campaigns you will find this much easier when you work worth a single partner using their own technology.
Not only will this reduce the amount of data wastage that happens when you try to stitch together technology, but you’ll have far more transparency over your campaign.
Why? Because when you work with partners who are responsible for different parts of your marketing lifecycle, each one will want to claim credit for any results, leading to differing attribution results and confusion over which is correct.
When you work with a single partner through your lifecycle, like Crimtan, we have no vested interest in artificially weighting the results to any form of media or activity. Instead we can give you a more accurate and transparent report of your true results.
Which means you can plan future marketing activity based on the right data.
2) Tracking the wrong metrics
The second mistake is tracking the wrong metrics. As we have already mentioned, the data you collect and analyse needs to be related to your campaign goals.
Too often we see brands focused on vanity metrics, such as social media followers, page views or subscribers, without understanding how these help them get closer to their business aims, or give them useful data to base future campaigns on.
And yes, in the short term it can feel good to see your social media followers or page visits grow. But when you track the wrong metrics you risk spending your marketing budget on the wrong activities and stifling sales.
And in the longer term, this can trigger a vicious cycle where you are moving further away from your business goals, and have an ever decreasing marketing budget to turn things around, as sales have slumped.
This is why it is so important to be clear about the aims of your marketing and ensure you are tracking and analysing the exact metrics that matter.
3) Not understanding your CLV and CPA
Speaking of metrics that matter, too often advertisers are focused on the wrong metrics when measuring their marketing results, such as cost per click (CPC).
The problem with tracking only your CPC is that you only have part of the picture. Yes, an ad that delivers a good cost per click is sending traffic to your landing page. But how much of that traffic is actually converting?
It could be that you have an ad that performs well on CPC and sends more traffic to your landing page than any other ad. But few of the people who click through end up taking the real action you need, such as buying from you or registering interest.
Another ad, meanwhile, has a less impressive CPC, but a higher proportion of the people who click through end up taking the desired action. Overall, it costs you much less to acquire these customers, despite a higher CPC.
Based on CPC metrics, the first ad would be considered more successful, and more likely to be where you spend future marketing budget. However, when you look at cost per acquisition (CPA) the second ad is far more successful and is where you should really be weighing your ad budget.
It is also important to be aware of your customer lifetime value (CLV), the average total amount of money a customer will spend with you, when measuring the success of your marketing.
For example, let’s say you have campaigns delivering two different CPA:
- Ad campaign A has a CPA of £10
- Ad campaign B has a CPA of £15
Based on this, you would consider ad campaign A more successful. However, over time you realise that the two campaigns are bringing in different types of customer, with different CLV:
- The CLV of ad campaign A is £35
- The CLV of ad campaign B is £65
When you factor in CLV, campaign B is the more successful. This is why CPA alone doesn’t give you the full picture, and why you need to understand your CLV when tracking results.
4) Not measuring your incremental ROI
And finally, it’s common in marketing to measure the success of a campaign based on your ROI – usually, as we have already covered, this is your CPA or CPC. However, this metric is flawed and the resulting conclusion meaningless, because it doesn’t measure how many sales would have taken place anyway, without the advertising.
What you should really be measuring is your incremental ROI, as this calculates how much unique value your display ad campaign is genuinely delivering. In other words, results you only achieved because of the ads you ran.
To discover true incrementality you need to split test your campaign into two groups:
- One group who sees your ads
- A second group who doesn’t see your ads
By tracking your incremental ROI in this way, you can see how much additional revenue you have generated through your marketing.
We’ll help you measure the REAL results that matter
We’re the global experts in programmatic advertising with our own proprietary technology, including DSP, DMP and DCO. This gives us access to the data you need for accurate attribution when it comes to your digital marketing campaigns.
This is reflected in the results we deliver for our clients (you can read some of our case studies here).
If you’d like to understand more about how we can help you measure and improve campaign performance across your lifecycle, get in touch and we’ll be happy to help.