Although broad metrics such as brand sales are useful and necessary, CMOs are better informed about the efficacy and efficiency of their investments when measurement or revenue is supplemented with conversion metrics that span the funnel and are tailored to the brand objectives. Businesses can optimize their ROI and drive performance for their products across markets by establishing sound measurement practices.
The marketing team is expected to calculate the return on investment (ROI) of their activities, but this is mostly limited to calculating the effect on overall brand sales. However, such a broad measure provides little clues as to whether the investment is worthwhile in terms of strategy and effectiveness.
However, proper and accurate calculation of ROI through campaigns isn’t always so straightforward. Brands can measure ROI for less than half of their overall media spending, according to Nielsen research. This discrepancy shows that marketers often spend time and money in activations without understanding whether or not their campaign objectives have been met.
To Boost ROI, the marketing team must look beyond how their efforts affect the company’s bottom line and develop measurement practices that provide actionable insights into campaign results.
Let’s look at a few steps that strategic CMOs can take to optimize the impact of their efforts.
Measure ROI at Every Stage of a Campaign
Marketing teams often miss opportunities to fine-tune their strategies and make the greatest impact on audiences when only broad metrics of performance are considered. The implications of this shortsightedness, according to Nielsen research, cannot be overlooked. Brands should anticipate an 80% rise in average error rate in forecasting capacity if they fail to consider all revenue drivers within a campaign, resulting in 47 percent exaggerated incremental outcomes and 68 percent misattributed ROIs.
Marketers can work more resourcefully with step-by-step objectives so they can pinpoint particular steps to change rather than changing whole strategies when outcomes aren’t satisfactory. Moreover, taking the time to identify metrics will also help marketers ensure that each step contributes to the desired outcome, while the process of articulating what they want to measure and why will help them will ensure that each step contributes to the desired outcome.
Boost Productivity by Bringing Teams Together Around Shared Values.
While determining how a marketing team can calculate ROI is an important first step in developing strategies, such measurements can only be of limited use if they aren’t applied uniformly around the enterprise, regardless of roles or locations.
Importantly, these metrics must be flexible so that all teams can effectively interact and communicate while detailing initiatives in their respective fields. Teams will struggle with media planning and buying as a single brand, if they don’t have democratic access to data and a common understanding of how to view it.
Furthermore, developing a common language for articulating ROI allows marketers to communicate their activities more effectively with management. Marketers have seen how critical it is to be able to affirm their organizational importance to business leaders, particularly when marketing pressures have evolved so rapidly over the last year.
Marketing teams will be able to show how they’re prepared to manage and quickly respond to any industry shifts ahead of them, growing organizational morale and securing internal buy-in for their efforts, with the agility afforded by getting granular metrics in place.