Measuring Marketing Wins

Every organization wants to measure return on investment. Marketing budgets are often on the chopping block. So how do marketing departments determine the return on investment for each of their activities? There’s an old adage that says half of all advertising dollars are wasted, the problem is figuring out which half. Umm, that’s a problem.

Baseline statistics are out there for all kinds of marketing initiatives, which people can compare to their own numbers. Tools and tips for measuring response from direct mail (use of special URLs or phone numbers to measure which piece generates leads, expected response rate of 1-2%), web advertising (number of times an ad is served up, the click through rate, the number of conversions, average click through rate of banner ads is currently 0.2-0.3%), number of impressions combined with detailed audience segmentation information from media outlets, etc. All of this data, of course, then gets paired and parsed with business financial information showing sales numbers across products, product lines, and the company’s product mix.

Needless to say, there’s a lot of math. Marketing includes a ton of statistical analysis. It’s like the analytics movement in the NBA in the early 2000s or the recent movie Moneyball with Brad Pitt, except instead of trying to build a baseball team built on statistics that is most likely to generate wins, marketing teams are trying to build a marketing program built on statistics that is most likely to resonate with the audience. Marketing’s win equals influence. Influence is different from a purchase.

Most people think of marketing as something that tries to get us to buy something. Most of the commercials on TV want us to spend money on something, right? Yes. But a purchase is only one aspect of marketing. An important part, a measurable part, but not the only part.

What if a company or organization isn’t selling a commodity that can be easily quantified? What if it’s an organization that works to clean the ocean? What if it’s an organization that provides free educational webinars? What if it’s an organization that promotes healthy eating? I have one book on my shelf about strategic communications for non-profits. This 266-page book has nine pages dedicated to measurement and evaluation strategies. Nine pages! Running a quick statistical analysis, that means marketing in non-profits should only spend three percent of their time on measuring success.

Wow. Do non-profits not care about measuring the return of their marketing efforts? Absolutely not. In fact, many non-profits are finding their budgets particularly depleted during this economic downturn and are trying hard to make strategic decisions to maintain effectiveness. They know that they need marketing to make a difference, but they don’t have answers about what is particularly effective. Sure, many non-profits can measure against different metrics, like how many people walked through the front door, how many square miles of ocean were cleaned, how many people logged into the webinars, but let’s look more closely at the healthy eating example. Let’s hypothesize that you work for this organization and that your top three communications objectives are to educate the community about:

1. the benefits of eating healthy food
2. what foods are healthy
3. how to prepare food

How do you measure if you have been successful? Surveys, focus groups, key informant interviews…these are all possible, but they’re not all-inclusive. You could partner with local markets and ask for reports about types of food purchased, which may or may not be possible, prohibitively expensive, or an effective measure. And how do you know if the results of the campaign are long-lasting? Suddenly, measuring the impact of an organization’s marketing efforts just became even more challenging than it already was. How do you quantify social change?

I would love to hear your thoughts, suggestions, ideas! I’m always looking to improve our methods of measuring effectiveness. Please comment, shoot me an email, or send me a message on twitter (@missiethurston).

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