Have you noticed that when we set ourselves a personal goal to lose weight or improve our health it’s the hard numbers that count? We become very focused on achieving the desired outcome – a goal weight, body mass index number or perhaps target cholesterol level. We rarely reference the amount of exercise we did, reduced calories we ate or number of sessions with a personal trainer. That’s just the side show; the intermediate diagnostics. It’s achievement of the ultimate goal that counts.
So why, when it comes to marketing communications, do we typically revert to reporting the intermediate measures and not the main game – the hard business outcomes?
Imperatives to build smarter marketing measurement systems have escalated alongside the explosion in ‘big data’ and the rise of business analytics in the last 2-3 years. It may be common sense to
set desired business outcomes and design measurement processes to track achievement before commencing any communications programs, but this is not yet standard practice. A proactive approach
to measurement is called for to build better partnerships between CMOs and Communications Directors and their agencies in adjusting to the new era of marketing accountability.
”Smarter measurement will ultimately help marketing
professionals speak the boardroom language of effectiveness.”
Additional benefits are the ability to proactively work with procurement in marketing services, meet basic industry agreements on measurement standards, integrate social media measurement, help prepare brands to withstand crisis and enable recognition of great work that works through awards.
Ogilvy believes that measurement principles must speak the ROI language of our clients’ business environment. Very simply – we strive to measure results that can be ‘banked’ ahead of feel-good interim
effects. So if you want to watch your figures in marketing communications, here why we need to focus on the right numbers.
5 ½ reasons to get smarter at marketing measurement
Here are my five-and-a-half reasons why marketing professionals in agencies and client organisations alike must get smarter at marketing measurement, and suggestions on what needs to change.
1. The C-Suite view of “fluffy” marketing speak
CEOs and CFOs are growing frustrated with marketing’s inability to speak the boardroom language of effectiveness. The IBM Global CMO study in late 2011 found that most CMOs feel “overwhelmingly
underprepared” to harness and interpret the exponential growth in customer and market data both to demonstrate a ‘rear-view mirror’ return on marketing investment (ROMI) and shape future marketing
strategy. While this study certainly advances IBM’s Business Analytics agenda, it perfectly frames the challenge for the majority of CMOs…
they have landed on ‘Planet Data’ without a map
… just as CFOs and procurement have increased their influence over marketing budgets and agency choices. CMOs are reallocating budgets across smarter integrated communications plans and therefore
re-evaluating all areas of spend to fund investments in new customer touchpoints.
Brand awareness, image, facebook “likes”, etc., are all positive indicators – what I call the ‘feel-good’ output and impact measures – however, the C-suite doesn’t salivate over these, even regarding them
as somewhat ‘fluffy’. Working client-side for 18 years, I have experienced firsthand the CFO’s growing impatience at marketing offering these indicators in management meetings as ‘measurement’. Until
marketers learn to apply predictive modeling techniques for sales and future demand forecasting using these measures, they remain disconnected from the boardroom language of effectiveness, rather than
the boardroom asset they should be. The most valuable marketers of the future will be those who embrace statistics to validate their sound instincts.
2. Measurement is recognised as our #1 Industry Challenge
The 2011 Peripheral Vision study of the next decade’s trends in communications by Ogilvy Public Relations Australia revealed both clients and agencies alike agree that demonstrating and measuring
effectiveness is our top challenge – specifically, managing the increasing importance of campaign ROI.
While public relations may be widely viewed as the least financially numerate marketing discipline, with a talent pool drawn largely from the world of journalism, all communications agencies tend to suffer
from being seen as interested in the numbers only when they support the story we wish to tell.
Agencies often approach measurement focused on outputs such as reach, awareness and value of earned media (the now-derided Advertising Value Equivalent), and disconnected from business
outcomes. Two causal factors contribute to this problem. The first is the historical agency culture of hiring for creativity with a lack of measurement training to support it. The second is the tendency of
many clients, particularly in Asia, to distrust their agencies with confidential data for more accurate measurement purposes. I have worked on several campaign evaluations in the past year where local
clients have refused to share effectiveness measurement data (including data that I subsequently discovered was publicly available).
More recently, agencies, and especially Ogilvy, have acted to establish strong teams of marketing data analytics experts in-house and involve them in helping to define client’s business problems before writing briefs for communications solutions. In my view, data analytics teams within agencies rarely receive sufficient internal and external profile with clients, though understanding their capabilities can
make a major difference to the quality of measurement programs.
Genuine integrated campaign measurement demonstrating the business impact of individual communications touchpoints and/or the combined power of multiple touchpoints remains rare.
This type of measurement requires data analytics experts, clean back data over 1-2 years and specialist statistical modeling tools. The growth of in-house marketing analytics experts and specialist
measurement agencies is there to support client marketers and agencies that are ready to embrace more sophisticated measurement that can help them refine their marketing mix against the optimum
mix of touchpoints.
3. Procurement ‘Bites’
It’s time for agencies and marketing departments alike to befriend procurement. Procurement’s relative inexperience in specialised areas such as social media monitoring, corporate & crisis communications ,
CRM, online media buying and digital advertising means agencies need to get on the front foot in demonstrating the value they provide without the jargon and supported by measurement evidence.
Clients such as Johnson & Johnson that proactively arrange marketing familiarization programs for their procurement experts are to be applauded. Agencies should learn from them in creating proactive
The influence of procurement has led to huge detailed costing requests such as that seen from Nokia as part of its North American public relations review, costing every conceivable type of PR activity across multiple countries. While the industry railed against this demand, consider: how else is the procurement professional to approach marketing services without specialised knowledge of consulting value?
Agency pitches involving procurement need to dial up the focus on measurement and ROI as a joint effort between clients and their agencies, while explaining the value of intangibles such as reputation
enhancement and building proactive supporters of an organisation. Involve agency data analytics and measurement experts and the agency CFO – numbers people respect numbers people. Showing
reporting tools, measurement methods and ROI approaches all demonstrate that you are as committed to delivering client value as procurement is and therefore puts you on the same page with common
4. Are you Barcelona-Declaration compliant?
Industry leaders in corporate communications such as Philips, Clorox and FedEx are now espousing how to ensure their firm’s communications are Barcelona Declaration-compliant. Ogilvy is also working to
actively ensure its communications programs are compliant. No idea what this is?
Communications industry bodies have already begun wrestling with the need for greater accountability and ROI as the key measure of marketing effectiveness. The key body in communications measurement
is the Association for Measurement and Evaluation of Communications (AMEC). AMEC created the “Barcelona Declaration” in 2010 (I’m sure many within AMEC are glad this conference was not held
in Patpong, Thailand, lest we all end up following the more intriguing-sounding “Patpong Declaration” a rather different kind of figure-watching!).
The Barcelona Declaration Principles on measurement of communications are:
1. Importance of goal setting and measurement
2. Measuring the effect on outcomes over outputs
3. The effect on business results can and should be measured
4. Media measurement requires quantity and quality
5. Advertising Value Equivalents (AVEs) are not the value of public relations
6. Social media can and should be measured
7. Transparency & replicability are paramount to sound measurement
The primary thrust of this industry declaration was to establish initial standards that would not set the bar too high yet direct marketers away from superficial measurement such as AVEs in favour of
business outcomes determined by sound and replicable measurement practices. Encouragingly, just 1% of PR practitioners say AVEs will be the key PR measure by 2021 in the Peripheral Vision 2011 study.
Alarmingly, AVEs were still quoted routinely in cases presented by major multinationals such as P&G at the recent Asian Marketing Effectiveness Festival.
5. Social Media – the great measurement ‘smoke screen’
Social media is in danger of becoming the great measurement “caftan” that many are hiding under – albeit temporarily as we realise that social media produces lots of numbers that look like measurement.
The critical emerging stage in social media is coming to grips with the difference between social media counting vs. social media measurement.
The challenge with a new media that produces huge volumes of numbers is to decide which KPI’s create shareholder value. We must be measuring metrics that are related to business value. Does social media change brand perception? Does it increase consideration? Does it drive actual sales for the brand? Those are difficult questions, and they require new ways of measuring and tracking, and that makes it challenging.
What often gets measured instead is what we call diagnostic metrics—the number of Facebook fans, the Twitter follower base, members of a LinkedIn group. All the metrics that are easily visible are the
ones that end up getting measured most often over those that would really be useful in understanding business impact. The problem is that it’s unclear whether there is a direct relationship between these
metrics and genuine business value.
Ogilvy has developed a social media measurement model to help clients understand whether metrics are KPI’s or diagnostic. This model aligns across the marketing funnel stages of reach & positioning,
preference and action to suggest KPI’s vs. diagnostic measures for each stage.
5.5 Award Recognition
Why is this the additional half a reason? It’s not why we measure, but it helps us get better at it. Aiming for award recognition teaches us to build smart measurement principles into our marketing
communications from the start. Awards remain off-limits without genuine measurement based on business outcomes. In fact, much of the industry’s best measurement occurs when writing award
entries, which force us to examine business results to report on campaign outcomes.
When writing award entries together with our clients, we often discover brilliant outcomes through more thorough investigation such as market research on impact and isolating impact of marketing
variables on business results. This process always makes we wish we had been much more rigorous in setting business objectives upfront with that client.
In judging regional PR awards, most entries have weak evaluation sections. All too frequently ‘we got lots of media coverage’ or AVE is used as the primary measure of success. As the global PR industry and
the vast majority of our global blue chip clients have rejected this methodology, it is not acceptable in awards either.
Simply isolating changes in other marketing and environmental factors can often establish the causal impact of PR without requiring extensive studies. This approach is often overlooked in day to day
Watching the right figures
Reflecting on the last several years in communications, award entry preparation has been my best learning tool on how to gather smarter measurement than any other method. That’s why I’ve included
awards among my list of why to measure. It’s an excellent teacher.
There are many reasons why we need to get smarter at communications measurement. Whichever reason motivates you personally and your organisation, use it to build a culture of figure watchers – who
know the right numbers to be watching.
From Stretched to Strengthened: Insights from the Global Chief Marketing Officer Study by IBM, 2011. Face-to-face interviews with 1,734 CMOs, spanning 19 industries and 64 countries.
Peripheral Vision – PR Communications in 2021, conducted by Ogilvy Public Relations together with the International Association of Business Communicators (IABC) among 300 Australian PR professionals, July