Are you really measuring the right things in the right way?

Effectiveness has been somewhat of a ‘word of doom’ for today’s marketers. For context, marketing effectiveness is the measure of how effective a go-to-market strategy is toward meeting the goal of maximising efficient spending to achieve short-term and long-term results. While most organisations are laser-focused on tight cost measurement and management, marketing investment often remains a measurement and accountability blind spot.

Taking a step back and thinking about the hyper-connected digital world we live in at the moment puts things in perspective. Think about the number of ads you’ve seen, heard, or read today – whether this was while scrolling through Instagram, listening to the radio, watching TV or on your way to pick up your weekly groceries. Today’s multi-channel, data-driven, always-on marketing & growth strategies mean that a marketer’s job of pre-determining KPIs, ensuring these are tracked in real-time, and leveraging results to demonstrate financial ROI has become significantly harder but more essential than ever. Compounding this challenge is the need for greater transparency. With trust at an all-time low, robust measurement is a critical competitive advantage.

The reality is that many firms don’t – or can’t – measure the right things in the right way. Numerous organisations still focus on a limited set of metrics that don’t enable alignment with broader business goals, and don't fully leverage data & analytics to drive investment decisions and measure performance.

There’s an increasing need for CMOs to calibrate the right mix of indicators which tie short-term measures to long-term value creation. We’re constantly seeing today’s CMO under pressure to demonstrate ROI through short-term measures. This means that high value long-term ROI is often compromised.

A key component of success is therefore to be able to identify short-term lead indicators which are connected to longer-term brand measures, and to ensure these are tracked appropriately. If successful, this will further give the marketing organisation the power to amplify its role across the C-level, starting with enabling the growth agenda and providing solutions & tools to help make budget allocation decisions.

Alignment between senior marketers and CFOs is also particularly important. A mutual understanding of how effective marketing contributes to commercial objectives, using empirical evidence and value-based metrics, will help establish and articulate the marketing organisation’s connection to business KPIs.

Thinking about what it takes for firms to maximise effectiveness, a few considerations come to mind:

• Brand objectives: Set measurable brand objectives that are tied to a deep diagnosis of end-user conversion challenges and opportunities by channel

• Planning/mix allocation: Allocate investments against efficient above-the-line & below-the-line activities to achieve objectives, while creating integrated communication plans across all marketing activities

• Test & learn: Design and run tests to evaluate returns and leverage findings to optimise allocation

• Measure: Select and align on a measurement approach and use tools that best fit your organisation’s needs. Make sure to apply these consistently

• Evaluate: Think about every aspect of your marketing organisation – how effective is your marketing operating model? Is your MarTech ecosystem fit-for-purpose? Is your marketing strategy aligned with the wider business strategy of your firm?

Considering the above will help marketing teams establish an ‘ROI mindset’, making them spend as if firms' hard-earned money were their own, and nudging them towards embracing 5 healthy habits of effectiveness-led marketing organisations:

1. A holistic view: Establish a roadmap to an end-to-end solution

2. Be financially focused: Create and deliver campaigns anchored in financial value generation

3. Be performance-driven: Establish and maintain comprehensive performance metrics

4. Be organisationally aligned: Agree shared goals and measures

5. Be technology-enabled: Establish and maintain integrated marketing spend management

Achieving marketing effectiveness requires investment in capabilities, processes and talent. At KPMG, we can help you assess marketing maturity in your organisation to identify required capabilities with the aim of delivering both short-term impact and long-term brand building.

Please do reach out if you'd like to learn more or discuss further.