One of my favorite proverbs, which continues to be proven on a daily basis, is “what gets measured gets done.” The quote, or its variation “what gets measured gets managed,” is often attributed to famous management consultant Peter Drucker; but its origin appears to date back to scientist William Thomson, Lord Kelvin, who specifically referenced that a lack of numbers leads to unsatisfactory knowledge during an 1833 lecture.
In an age of digital marketing decades since these quotes were made, the application of science to advertising has never been truer. Measuring your success, as Hannah Woodham covered in a recent blog post, is very important; but knowing what to measure against is critical to determining success. Enter advertising baselines for return on investment (ROI).
A baseline refers to information that is used as a starting point by which to compare other information. Establishing multiple baselines for your advertising efforts helps prioritize campaigns, identify what is working, identify what is not working and determine ROI.
Creating an effective baseline requires a couple of foundational elements:
- Identifying what matters to your business
What are the success indicators for your particular business or advertising effort? Is it to grow Web traffic, generate leads, get visitors to engage with specific content on your site, generate revenue or a combination of the above?
When looking at key performance indicators (KPIs), be sure to cover all the different stages of a buying cycle as the desired outcome in the awareness, interest, desire and action phases differ greatly.
- Laying out objectives
The next phase is to lay out objectives for your marketing efforts. These can be broad-based for the entire organization or specific to a campaign or a certain type of marketing, such as paid media or email campaigns.
When establishing objectives they should be specific, clear and obtainable with numbers and timeframes expressed. For example, “grow readership of white papers by 25 percent by the end of 2015” is a solid objective. Setting realistic expectations based on timing, budgets and resources is important so that improvement can be pragmatically measured.
Objectives are iterative and should be reviewed as well as potentially adjusted on a set schedule to continually drive improvement.
As part of this stage, it also is important that there is alignment with all stakeholders on what the objectives are so progress, achievement and challenges can be supported.
After you have the priorities and objectives set, the next phase involves:
- Identifying what to measure
Identifying what to measure is directly tied to the objectives established in the first phase of setting up a baseline. If your objective is to increase readership of white papers by 25 percent, then one important measurement may be the number of white paper downloads your advertising efforts drive. If it is growing website traffic, then you may want to measure visits and page views.
It is important to keep your objectives at the forefront of this process so you can measure what matters and not what is easy to measure. This may mean acquiring new analytics tools or establishing new processes to be able to gather data.
- Gathering what you have
Once the key metric points are established, gather existing available data and information. Ideally, this should be a few years’ worth of data including any fluctuations due to seasonality. Make sure you keep a clear inventory of what you have and what you need.
- Deciding how to measure
Depending on what you are measuring and how much data you have from past performance, you may have to make adjustments to what you measure against. You may use industry metrics, your own company’s past performance or, if access is possible, competitive data.
The last effort is to actually document the baseline and communicate it to company stakeholders so that the starting point is clearly established.
At that point, advertising efforts can start, progress can be benchmarked at regular intervals and value can be extracted from the data to seize new opportunities.
What types of benchmarks have you found to be most effective at communicating value of your marketing efforts to CEOs?