Alex Morse of ID Comms: marketing’s missing metrics are helping agencies but hurting advertisers

Brands have more data than ever but the failure of the research and marketing giants to identify the metrics that matter is leaving advertisers with fewer answers.

It goes without saying that marketing has become more complex. Dial up a media schedule from five years ago and compare it to a current plan and the rapid proliferation of platforms and solutions will make even the most well-seasoned data analyst blink. Throw in additional complexities around tech stacks, transparency and data ownership and your average marketer’s remit has never been so technical but also – in theory – accountable.

The marketing services industry sees such complexity as a fantastic commercial opportunity. Writing in IPG’s 2013 Annual Report, chairman and CEO Michael Roth said: “Complexity is good, because it places a premium on our professional counsel and expertise.” John Wren reiterates this sentiment in Omnicom’s latest Q4 statement.

This sounds eminently understandable given that the majority of advertisers face another year with less resource and an ever-expanding galaxy of digital and data solutions. While superstars of consumer marketing – the Apples, Nikes, Red Bulls and Doves – manage this seamlessly and successfully, for most brands incremental improvement may have to do.

The difference allows a lucky few to consider marketing investment as a demand driver while the vast majority have to treat it as an operational expense. That should be of concern at board level.

Measurement overload

Part of the problem is that even the most focussed marketing departments are juggling dozens of metrics – from Brand Health and Purchase Intent to Share of Voice and Engagement Rate. Marketers have to manage both long-term panel-based studies, econometric models and pool-based media audits commissioned for an analogue era, while also optimising campaign performance based on real-time digital performance and buzz metrics.

Data is often presented via a multitude of competing dashboards supplying conflicting and counterintuitive learnings. The result is decision-making paralysis or flawed judgement.

The measurements that should matter are KPIs such as brand equity or sales. But too many brands don’t know what they are trying to measure or are unable to measure it properly in the first place. This allows the focus to remain on cutting costs such media prices and agency fees as they’re the easiest source of demonstrable value creation.

In such a scenario, a smart global holding company should be investing heavily in next-generation brand and consumer research capability. However, despite an increasing emphasis on identifying a ‘single view of the consumer,’ the industry is yet to see a focussed, manageable, and, most importantly, unequivocal set of metrics that tell brands how they are boosting business performance.

If market research is now ‘Data Investment Management’ (as it is at WPP), it’s unlikely to provide an answer on ROI anytime soon. This should be an opportunity for the major independent research houses. Sadly they are too busy struggling with their own problems. For example, GfK’s 2013 “sales growth amounted to 0.8%” with “numerous changes, undoubtedly requiring substantial effort”, with its shares down 29 per cent in a year at one point.
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Nielsen, it must be said, paints a brighter picture. High-profile collaborations with Twitter and, more recently, Adobe are helping to develop its “uncommon sense of the consumer.” But beneath the investor-friendly rhetoric, the hard numbers tell a less attractive story, with warnings of “substantial indebtedness,” “increasing vulnerability” and “competitive disadvantage” in its 2013 Annual Report.

The research houses’ predicament is in stark contrast to the buoyant results of the marketing agencies. The trouble is, as demonstrated by WPP’s 20 per cent stake in ComScore, and Publicis’ Sapient acquisition, the far greater prize is in digital, consulting and tech.

Time to take the challenge in-house

Thus the challenge for marketers is to turn metrics into money without the help of their agency partners. In a world where the next high value customer will be acquired through word-of-mouth and lost via an online review or lowly ranking SERP, it is clear that ‘Brand Awareness’ and ‘Engagement Rate’ (among others) are inadequate proxies for both long and short-term marketing effectiveness.

So how can marketers ensure they select metrics that drive the right business outcome? Our work with leading brands identifies five fundamental places to start:

1/Measurement Hierarchy: Sales, Brand, Comms, Media and Digital, with their respective tools, should cascade in systematic order – not be cherry picked when convenient.

2/Communications Planning Framework:
internally and with agencies, translating business and brand objectives into an informed and structured communication strategy should be an integral part of the marketing process.

3/Elevate the Narrative: put brand and business performance before media inputs to ensure long-term business health is prioritised over short-term responses.

4/Listen – but Learn: understanding what works requires a structured evaluation process – from Brief, to Strategy, to Plan then Execution.

5/Keep it Simple: before introducing new data and metrics, there’s probably plenty of room for simplification and rationalisation in your existing approach.

Complexity and confusion may be good business for some. But it is making it exponentially harder for most brands to find their own Holy Grail.

01a5007Alex Morse is global media performance director at global media consultancy ID Comms.

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