Given the increasing shift towards digital in marketing budgets, it has become easier for marketers to view metrics of campaign performance during the campaign window, with indicators such as impressions, views, likes and web visits readily available. The rise of attribution, especially in the US market, but more and more in Europe, also gives a ‘live’ view of sales impact for very tactical steering of budgets.
Such indicators serve as potential to attribute some degree of success to a campaign, but these metrics often give a very short-term view of success that can lead marketers to draw incorrect conclusions. Given many adults remember marketing they saw or heard when they were children (I still remember the Milky Bar kid, which is now very relevant for my purchase choices for my children), it’s clear that marketing effects can last far longer than the typical time frames of such campaign windows.
There are multiple challenges to taking a long-term view of performance: businesses are inherently short-term in their thinking, pushing for immediate returns and performance for shareholder return vs. the long-play; marketing teams move quickly, with 2-3 year stints in roles that mean the emphasis is on showing impact immediately; the data needed for long-term measurement isn’t captured and stored as a matter of course; and the methods involved are outside the skillsets of most marketing teams, which means trust, understanding and interpretability of the methods are vitally important.
I’ll discuss how we can capture the long-term impact of marketing using a series of methods, to show how marketers can use this to make the right decisions that drive long-term growth, and to propose some guidelines for moving your brand to one that can operate long-term thinking whilst still achieving results today.
Marketing impacts individuals through multiple different stages of their purchase journey. That purchase journey is also becoming increasingly non-linear and fragmented. Our article on Multi Touch Attribution describes the process in piecing together a customer’s journey towards purchase in a little more detail, but I’m going to focus on methods that allow a holistic understanding of performance here.
One of the most relied upon and established approaches for measuring marketing performance has been Marketing Mix Modelling (MMM). MMM involves using econometrics approaches to isolate and measure the impact of various marketing levers on sales or other key metrics. More broadly, Marketing Mix Optimisation (MMO) leverages the insights built from these models to steer future strategy, taking something that is inherently backwards looking and using it in a broader ecosystem of methods and KPI tracking to drive future success.
As brands look more and more to immediate performance of campaigns, pushed by increasing pressures on budgets and the need to show direct links to sales, the holistic learnings of MMM are being overruled by narrower methods that focus on driving impact now. We know that not all advertising leads to a direct sale, particularly in offline channels such as TV and OOH, but across all channels. Not every potential customer that sees an ad is ready to purchase, advertising might trigger a need but start a research journey that takes some time to complete, etc.
So a better appreciation of marketing’s impacts across a purchase journey or funnel can support brighter decisions in the long-term, but also ensure you have performance today.
There are many stages that can be tracked and measured in the lead up to a sale. Brand awareness, consideration, intention to purchase, etc. are all well-known metrics usually tracked through quantitative studies. They are not without their issues (generally lacking dynamism and so actionability, expensive to operate at scale, forcing people to consider brands that are not in their everyday thinking, etc.), but for those brands with a sophisticated enough setup, they can be used as stages in a modelling ecosystem to understand how different campaigns, creatives and promotions have affected each level. While the biggest brands in the market have invested in this data in a consistent way for many years, it is often not available or only as ‘spot checks’ a few times a year.
For others, many proxies exist that can give a good sense of brand salience (general mental availability in the market). Social and open digital spaces can be scraped for brand mentions over time, search trends for the category and brand can be used, or even light-weight digital surveys to gain scale at the loss of demographic rigour.
Whatever data you are able to track, different modelling approaches can be applied to understand the impact of marketing activities in driving each ‘stage’ and give a broader perspective to the role of marketing. If you have this understanding, and a regular enough capturing of these KPIs, you can ‘steer’ your investments through the year based on which KPIs at which level of the purchase funnel need boosting.
These methods, whilst useful for driving short and medium-term decision making, still miss the longest impact that marketing activities can have. When we have new campaigns that change perceptions of brands and drive a huge increase in interest and purchase that is sustained over time, it is difficult to capture this through methods normally deployed. Instead, we want something that can capture the structural change to a brands’ performance and to seek to identify which activities led to that happening.
At Ekimetrics, we have deployed this approach for many clients, allowing us to separate outcomes into long-term trends and short-term uplifts and really see the full impact of marketing investments over time. Importantly, this also demonstrates how focusing on marketing actions that purely impact the short-term performance of a brand can lead into a vicious circle of decreasing effectiveness and efficiency that then takes a lot of spend on improving brand salience to counter.
Beyond the measurement, a key challenge is in how to actually use these results when constructing a marketing budget and steering throughout the year. It is easy in principle to say you want to invest for sustainable performance over the next two years, but when you’re being pushed to hit your monthly sales targets it is a very brave marketer that won’t shift some spend into acquisition to boost immediate performance. We also find ourselves coming up against a key challenge from the opening, the rapid movement between roles. So, how do you approach this?
I like to think about marketing budgets in two ways: the foundations, which drive the brand forwards over the long-term and lead to sustainable and upwards-moving businesses; and the finishes, which close the deal for the consumer and drive the immediate performance. This allows the use of long-term understanding to set a foundation to your marketing budget, understanding the role that foundation will have this year, but also in the next. You then have a pot of tactical activity that can be tuned throughout the year to drive results where needed. Critically, having broad leadership alignment on the role of the ‘foundational’ element of the budget, protecting that through difficult short-term times, and ensuring that these foundations are kept through personnel changes, will separate the brands that outperform in the long-term.
This is not an easy topic to put into practice – there are many barriers to making this happen in a business – but there are some practical steps to put in place that can move you down this path:
When established as a shared approach with broad organisational buy-in, this is where the gains can really be made by thinking long-term and investing even when the return is not immediately visible. For those brands that are able to succeed on this journey, the returns will be felt over many years and an increasingly secure category position, where every marketing activity is more efficient because of the strong structural foundations that you’ve built.
1 ISBA: Demystifying the Role of Attribution (2018)