What Does Measuring Your Marketing Actually Mean?

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As a marketing analytics firm focused on helping brands and agencies for the past 15 years, we've challenged our clients to be able to measure the value of marketing. But what does that actually mean?

If you ask various people within agencies and brands, you get varying answers. When I am out on the speaking circuit, I often open with that question, and the range of responses I get is fascinating.

Although the range of answers is wide, most align with business value metrics. However, when I look across the marketing landscape and talk to clients and prospects daily, the reporting and analytics we use to demonstrate marketing effectiveness do not convey that level of value.

Almost every agency uses this approach and phrasing to show clients the value its media strategy is delivering. Media reports revolve around the following types of KPIs:

Let me be clear: All those metrics are related to the media optimization process, but none offers any business value.

I can hear the agencies saying, "But that is what media conversions are for!" To that, I say media conversions were never meant to demonstrate business value; instead, they are a metric used to optimize the media itself.

As an industry, we are stuck in the paradigm of using media activity to communicate value, but there aren't any metrics in that approach that can be equated to real value.

Unfortunately for the entire marketing industry, the idea has created distrust in the marketplace about the value that marketing is delivering to an organization.

Today, organizations have no choice but to start measuring value using a first-party data strategy. What does that mean? It means organizations must combine the activity data with actual conversion activity in a first-party environment, such as the organization's website.

Measuring marketing value begins with combining media activity with website conversions in your reporting.

Let's say you are a marketer tasked with generating demand for your product or service and delivering leads for the sales organization. You need a report that demonstrates the following:

As you can see, the metrics used align to real business value.

In your report, you should be able to answer the following questions:

Now, pause for a second. Compare the types of reporting you are getting from the media platforms or your agency with the reporting I just described. Do you see the difference?

That is the level of analytics marketers must have to demonstrate value and drive results. But you can't stop there.

Now that we have established the baseline for how marketers should be demonstrating value with a combined view of media activity data and first-party website conversion data, it's time to finish the story.

In the example of a lead generation marketer, we know the number of leads coming from marketing. How many of those leads become customers?

Aligning marketing performance and value builds on the foundational metrics already mentioned and goes even deeper by demonstrating the following:

That level of insight makes the best of a first-party data strategy by integrating all media activity, website conversion activity, and CRM data, allowing marketers to answer real, revenue-driving questions such as...

Those are the questions marketers need to be answering to understand the value of marketing.

To get started on your journey to measuring your marketing value, start with this marketing ROI formula:

What is your "Y"?

Challenge yourself with these two essential questions:

Based on your answers, look at what your analytics are telling you and find out where you need to go using the three levels of insight outlined in this article.