Advertising measurement can
be challenging, requiring the use
of experiments, surveys, and
complex statistical modeling.
Large consumer package goods
companies and automakers
have mastered these techniques,
but for many direct-to-consumer
companies, measuring
upper-funnel, brand efforts are
challenging and difficult.
Direct marketing measurement,
on the other hand, is
mathematically straightforward.
The techniques haven’t changed
much over time, there are just
more data and channels to
analyze, and big data has made
complex analysis easier. For
example, marketing automation
technology has made it feasible
to create complex test designs
that have the potential to
quickly learn what works and
what doesn’t. Digital marketing
is essentially direct marketing
with more bells and whistles.
It happens much faster, and at
larger scale. In sum, direct and
digital marketing are easy to
measure, and advertising is not.
The Measurement Trap
This sounds great—but there is
a problem. Because CFOs and
shareholders love measurement,
dollars tend to flow towards
more measurable channels,
even if those channels might not
be delivering on key marketing
objectives. As direct and digital
marketers continue to pursue
more customers more frequently,
CPA increases, and customer
quality — usually measured
by customer lifetime value
—decreases.
CMOs understand that to reverse
this problem, it’s necessary
to “refill the top of the funnel”
with brand advertising. Brand
advertising works differently
than direct response advertising.
Instead of forcing consumers
into rational decisions, brand
advertising changes consumers’
attitudes and sub-conscious
preferences for brands. This is
why Coke, for example, spends
money on television; for the
retail-based business model
to work, preference must be
automatic and deep-seated,
instead of consumers making
rational cost-benefit tradeoffs
every time they purchase
a beverage.
The Evolution Of Marketing Measurement
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