This is the reality we live in: the dollars once attributed to traditional marketing are increasingly going towards digital marketing. The shift towards digital gives us nice things in terms of measuring performance, and tells us more about the ROI of our actions than ever before. But do these actions have a real impact? Are we really generating more revenue?
No one is arguing against better insight, but there are risks when you take it to the extreme. The best way to kill your brand is to evaluate whether every dollar invested has a direct impact on the financial returns of your company.
Digital advertising has been sold as “measurable” for many years, with the goal of stealing parts of the market away from traditional media. The issue with this is that we’ve created a precedent. Online branding activities have been progressively set aside in favour of activities with a measurable ROI. Even worse, for many companies, return on investment is calculated on a last click basis in Google Analytics. Over time, we’ve prioritized measurable, promotional acquisition strategies over activities with an (not always measurable) effect on brand perception.
Out goes the CMO, in comes the CFO!
At the beginning of 2010, we noticed a structural change within many large companies. They were seeking out marketing hires with an accounting approach to marketing. A dollar spent needs to bring in five, and it needs to happen this week! We’ve ended up, in the majority of cases, with a client who sits in front of their analytics platform anxiously hitting F5 in the hopes of seeing revenue stream in within days, even hours of launching a campaign. We also get the impression that a dollar spent online needs transforming into an online sale, not even a sale in stores.
So, why should you be weary of the bottom line?
1. So that not everything is measured in terms of ROI or direct revenue
Initiatives work as a team, the parts form a whole. You simply cannot only analyze last click conversions; if you do, you lose the rest. There are so many important points of contact with the user before they decide to convert!
Our digital media and marketing analytics specialists do an excellent job of evaluating these interrelations and confirming exactly how many dollars will be lost, indirectly, if you remove top funnel initiatives or investments from the equation. These might include influencer marketing, media placements to promote brand awareness or efforts to feed your company blog. An excellent article was recently published on Adviso about ways of measuring brand awareness.
What’s more, some things simply cannot be measured. That said, if you do want to try to measure everything, take a look at different metrics. What is your attribution model? You can evaluate media performance in first click, view through or assisted conversion. Other brand data is equally important, particularly:
- Engagement rate
- Reach
- Traffic
- Searches for your brand during and following a campaign
The importance of qualitative data is also significant. There are several methods of collecting this, for example:
- Survey your clients about how they heard about you (brand lift study).
- Listen to online conversations about your brand
- Hire a research firm and conduct an annual brand awareness survey
Finally, comparing yourself to your various competitors in benchmark mode can be a useful way of situating yourself. Where do you stand in the market, and what does your growth look like compared to the major players in your industry? What is your share of voice online? What is your share of earned media?
2. So you don’t have to redistribute all your dollars to low funnel performance tactics
Sometimes we receive a large amount of budget from traditional media that had previously been invested in brand awareness. This is not a problem. The problem is when companies expect that all these dollars will be invested and translated into pure performance, as though brands no longer needed to maintain public awareness, their “share of heart.” Doubling your media performance budget won’t result in doubling conversions and revenue. Companies are starting to have a hyper-linear impression of investment versus generated revenue, and it’s killing brands!
Public awareness of a brand is extremely important for its longevity and should not be taken for granted. It is work that needs to be carried out daily, especially in a changing world where everything moves fast, where new competitors are carving out a place for themselves, and the rules of the game are constantly changing. Digital investments won’t be the deciding factor when it comes to awareness of your brand. On the contrary, consumers’ hearts are won with human tactics, with an inspirational tone that reflects the values of your brand and that can be communicated visually and creatively.
Do you sincerely believe that brands like Red Bull calculate their ROI after executing a stunt like sending Felix Baumgartner into the stratosphere? We could even go so far as to ask you when was the last time Red Bull talked about their product. The same thing goes for Coca-Cola and the millions of dollars they spent on their ultra-inspirational Super Bowl ad in 2017.
3. So you’re not only betting on initiatives with short-term value
Having an excellent performance or a high ROI for certain short-term initiatives looks good (for example, through SEM or remarketing). While this is all very relevant data to analyze, we need to recognize that it’s all part of a larger whole, of a global marketing ecosystem that feeds this type of performance. We are wrong to think that these initiatives are all you need to continue to see good results.
Short-term thinking slowly kills your brand: be strategic! What can you do now that will contribute to your performance in six months, two years, five years? It’s essential to have a good balance of owned, earned and paid, or short-, medium- and long-term. When we come off too promotional, we hurt our brand perception and are essentially telling consumers that all they have to do is wait to get a better price for our products.
The time has come to refocus our efforts around the user. Advertisers have data, a lot of data, maybe even too much data. So much that they don’t know where to start. We believe that it’s important to listen to the signs your clients are sending you. Segmenting your messages is becoming more and more essential: an adapted, targeted message means better returns. Listen to your clients, and they will tell you what they expect from your brand.
More so, low funnel initiatives are limited by a certain volume. This is because they’re aimed at people who are already aware of your brand (for example, a remarketing campaign), who are already in-market, or are looking for products or services connected to your industry (for example, an SEM campaign). It’s important to continue to seek out incremental growth, even if it costs more—that’s to be expected. We need to think further ahead, see the bigger picture. How much will these new customers bring in? What’s your Customer Lifetime Value? What actions do you have in place to promote retention, loyalty and purchase frequency?
Finally, it’s dangerous to let yourself get carried away by positive numbers without asking questions, particularly on the incremental impact generated or the qualification of the audiences you’re reaching. For example:
- What is the real value of your SEM brand campaigns?
- Are they cannibalizing your organic traffic?
- Are competitors buying your brand?
- Is your SEM brand campaign more persuasive than what comes up naturally through organic?
- Are you investing acquisition dollars to reach a public that’s already loyal to your brand?
- Are you trying to inflate your numbers to show a positive ROI to your boss?
- What is the real value of the leads you’re generating?
- Are they really qualified?
- Do they bring in sales?
- Are they loyal to your brand afterwards?
Note: We don’t really think you shouldn’t care about your revenue stream, but this is an appeal to reason and perspective. Our industry is constantly changing and the business world is more and more demanding: it’s normal to want to calculate as much as possible.
However, while it may be easy to fall into the habit of thinking short term and very promotionally, we need to keep our eyes open, step back a little and make the changes necessary to restore some balance—essential for the health and longevity of a brand.
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