Choosing the Right KPIs

Is the “like” on social still enough? How about the share or impression? Those are the questions many brands are asking after years of being inundated with vanity metrics on the reach and impact of ad campaigns.

Now marketers are increasingly taking a page from corporate thought leaders and shifting their focus to stronger key performance indicators (KPIs) — metrics that can effectively gauge whether ad campaigns are achieving real business objectives.

Choosing marketing KPIs that matter.

“The reason that companies have been using things like impressions, likes, and shares is that they’re so easy to access,” explains Lindsay Franke, the Chicago-based head of creative excellence and SVP at the global marketing and consulting firm Ipsos. “But over the last year or so brands are starting to see through those vanity metrics, and we see a lot of CMOs for major companies starting to say they need more.”

Determining what that “more” is may not be easy. In some cases, the KPI for an advertising campaign might be a direct lift in sales, market share, and/or profitability. In others, the KPI could be a metric such as brand health or trustworthiness that reflects a change in consumer perception that should eventually lead to better business results.

But for any marketer, the first step in moving beyond vanity metrics and finding KPIs that truly move the company needle is to realize that not all answers are going to be within their own department.

“Siloed metrics — by definition — create a disconnect between marketing success and the overall success of the company,” says Jonathan Carlson, director of marketing at digital video ad platform ViralGains. “A marketing campaign might have massive click-through rates, but if those clicks aren’t turning into qualified opportunities for sales, those marketing dollars could likely be better spent elsewhere. To truly understand the impact of their activities, marketers must constantly be speaking with sales and customer service teams to analyze how their programs impact revenue from both a new and repeat business perspective.”

The right KPIs should also help brands determine not just if they’re reaching the right target audience, but also whether the message they’re delivering is right for that consumer.

“KPIs differ depending on the category and the brand objective,” says Franke, who works with marketers across a range of industries, from restaurants and hospitality to CPGs, pharma, and tech. “If, say, you’re a financial service company looking to build a reputation as a trust provider, that could be the KPI you’re looking for as opposed to saying, ‘Oh that was just a fairly well-liked ad.'”

Begin at the End

One of the ways brands can ensure they’re focused on the right KPIs is to establish upfront the end goals of a campaign — and to ensure those goals are tied to companywide business objectives.

“Marketers need to identify the behaviors they want consumers to adopt,” says Marcus Collins, chief consumer connections officer at Doner, an ad agency headquartered in Detroit. “And that has to be agreed to by all parties early on.”

Mike Dougherty, CEO at programmatic radio ad buying platform Jelli, stresses those KPIs need to be shared not just with the agency or agencies of record, but with the ad platforms as well. “Whether it is radio, TV, or digital, at the end of the day it is a partnership, so being transparent about your goals is key to ensuring success,” he adds.

Carlson of ViralGains notes that KPIs can vary dramatically depending on the industry, but stresses that modern marketing success is never going back to a need for “more cheap impressions.”

“Even if reach is the metric you’re going for, it’s important to be able to measure the engagement that corresponds with that reach so that you can understand whom you’ve reached, and what might be important to those people as you strive to extend that engagement beyond the initial touch,” Carlson says.

The Keep-It-Simple KPI

Visit Philadelphia, the official tourism marketing agency for the five-county region of Greater Philadelphia, receives plenty of data points to measure advertising, but has opted for a straightforward bottom-line KPI as its foundational metric: how many leisure travelers are spending the night in Philadelphia. They do additionally monitor KPIs such as perception and engagement with online media, and total visitor spending over time.

“We have these big industry numbers like 43.3 million annual visitors, but as far as real KPIs, we rely on the market mix of our hotel demand,” says Lauren Hansen-Flaschen, Visit Philadelphia’s research director. “We’re able to segment out leisure, business, and convention hotel bookings and since Visit Philadelphia was started 22 years ago, there’s been an exponential growth in the number of leisure hotel bookings — from 250,000 in 1997 to 1.1 million in 2017.”

Marketing Outside the Box

To get that KPI, Visit Philadelphia analyzes performance data from two different firms, but also subscribes to the online travel data co-op ADARA, which can, for instance, track the people who’ve seen Visit Philadelphia ads and then within 30 days booked or researched a hotel stay. “That way we can tie the number of bookings back to certain campaigns,” Hansen-Flaschen says.

Visit Philadelphia also subscribes to reporting services from credit card company Visa. “We’re able to gauge trends. For example, comparing Washington, D.C., and New York visitors and their spending on restaurants,” explains Hansen-Flaschen. Robust survey data is also obtained from other sources on the age of city visitors, where they’re coming from, what they did while they visited, and even their household incomes. “That way we can compare all that against our target audience as well as our advertising,” she says.

Visit Philadelphia President/CEO Meryl Levitz adds the organization relies on a broad mix of ad platforms, including local/regional television and radio, along with social media and increasing amounts of online video.

All these platforms have to prove their KPI value on an ongoing basis, Levitz says, citing, as an example, a recent survey of 3,000 followers of “Visit Philly” on social media. “Nearly 90 percent of those respondents say that following our social media channels increases their likelihood of visiting the city and 75 percent say it has increased their impression of Philadelphia as a destination,” she says.

Those tend to be more supporting KPIs, Hansen-Flaschen adds, reiterating that hotel bookings remain the ultimate metric. She says that Visit Philadelphia has even quickly pulled campaigns after chats with local hoteliers determined they were not generating the expected lift in tourism.

“We’re not selling cans of soda where it’s more straightforward to see how advertising results in increased product sales,” Hansen-Flaschen says. “We’re selling a destination experience, and our efforts reach travelers at many different touchpoints. Research shapes our marketing and advertising initiatives. We can’t see where everyone is in this conversion funnel — from awareness through booking their trips — but we’re getting closer with new data tools. We want to be cognizant at all times of this type of information and how it impacts our visitor numbers.”

KPIs and the Current Ad Platform Mix

The move away from vanity metrics to measuring KPIs is unlikely to trigger a dramatic shift in the ad platforms mix for many brands.

“I don’t think where people are spending their dollars, especially on mobile and digital advertising, is going to change,” Franke of Ipsos says. “But I think when it comes to success criteria there’s going to be more scrutiny and a push toward what is meaningful versus a lot of feedback.”

But any shift away from likes and shares could yield new opportunities for traditional advertising platforms such as television, radio, and out-of-home (OOH), especially as legacy channels can now provide data that lets marketers link, for example, a specific radio creative or new billboard message to an increase in local foot store traffic.

“This is the power of now having access to real-time data and knowing when and where spots ran and even the context,” says Dougherty of Jelli, which now has ad servers at more than 2,300 radio stations, reaching more than 245 million listeners per month. “This is all automated. So again, brands can move quickly and see the impact of these real-time creative changes. Different messages can be tested and then optimized to the best-performing version.”

Ian Dallimore, director of digital innovation and sales strategy at OOH giant Lamar Advertising, notes the ability to link a consumer’s digital/mobile behavior to a specific billboard means that brands can now work with OOH platforms on KPIs that connect outdoor ads to business outcomes.

“Measuring a consumer that is exposed to an OOH campaign and verifying walk-in is easier because of the technology that exists today and the pure nature of OOH and mobile,” Dallimore explains, adding that with better measurement tools also comes the ability to gauge how billboards impact a target consumer’s brand awareness and affinity. “There are plenty of data companies that exist today that can take us beyond a verified walk-in but also help us understand the category of product they purchased, for example. Advancements in mobile devices and payments will also be a huge measurement tool in OOH going forward.”

For products and services with a longer path-to-purchase, such as home/car buying or switching wireless service providers, Collins of Doner says better KPIs can help brands more quickly focus on the proxy behaviors that show whether their message is moving a consumer in the right direction. And yes, those KPIs can include, if not likes and shares, then at least online and social media conversations that include the brand.

“We know from a proxy perspective that as some people talk about a brand, other people do become interested, so getting people talking can be the KPI in some cases, especially if you can then come up with metrics that align that with consumer behavior,” Collins says.


By David Ward

 

 

Skip to content