VIth Sense: Tracking KPIs to Improve Marketing ROI
There is ever-increasing demand these days that marketing produces a provable ROI (return on investment). And rightfully so. Marketing is indeed an investment that should pay off. And since we can better measure the effects of our marketing activities each day, it’s right to expect proof of success from our marketing spend. We provided a simple formula in our blog about how to track marketing results.
This easier measurement of marketing ROI has brought with it a fair amount of confusion as well, namely in the form of key performance indicators, or KPIs. We utilize KPIs to track and measure how a particular tactic is performing.
- Like if a video ad is getting viewed in its entirety or getting skipped.
- Or if a social media post is getting likes and shares.
- Or which search terms are leading not just to clicks, but to a newsletter sign-up or a request for more information.
These are all actions that help us determine how a particular tactic is doing. Otherwise stated: They are a key indication of performance (KPI). We track them so that we can have some assurance that we are reaching the right audience with a message that makes them act or react. They help us do our jobs better on a daily basis. We depend on them, and our clients like them because they are some proof of success of marketing activity. The problem is that KPIs don’t measure ROI, and unfortunately our industry is paying far too much attention to them.
Enter attribution modeling. That is, which activity can we attribute an action to that truly brought in revenue? Or at least gave us the chance to close a deal (like an appointment being scheduled, a request for a sales brochure, a click to the inventory page, etc). Attribution modeling has provided some relief to the KPI dilemma we mentioned above, but only some. It doesn’t measure the influence that the brand’s position had on the prospect’s decision. Scenario: Do I think more highly of Kia because they sponsor the NBA and Major League Soccer, both of which I am passionate about? You might be able to attribute my purchase of a Kia to an ad that I was served after searching for ‘SUVs under $40,000.’ But, would I have even paid attention to that ad if I hadn’t seen their halftime promotion at the FC Dallas match?
Bottom line is that marketers should measure ROI for integrated campaigns and pay less attention to individual KPIs.
The channel/platform experts use KPIs to optimize their efforts. You should use them to hold those people accountable, but not to attempt to measure the success of your marketing strategy. As a marketer, you are an investment made by your company. Paying attention to ROI more than KPIs will lead to a solid return on your company’s investment in you.