lower media investments and higher revenues : yes you can !

Nowadays, the media eco-system allow us to measure and track campaign failures or successes and customer behaviours or journeys for instance. Plenty of available indicators allow each marketer to build their analysis and recommendations, to deconstruct, predict or curse the results of their anticipations and forecasts.

The reality encountered at the heart of the organizations we have worked for sheds light on the contrasting practices in terms of measuring the performance of investments in digital channels.

Arthur Aurientis, harpagon’s Media Director, and Henri Kieffer, harpagon’s founder, share here some feedbacks from our teams’ interventions on these subjects.

Marketing levers account for 20 to 30% of business performance depending on the sector and the period.

These levers are naturally at the heart of brands’ concerns:

How can we improve the efficiency of our resources?

How to set up a dashboard and measure in a relevant way?

What is the ROI of the actions?

What trade-offs should be made according to the effectiveness of each channel?

What levers are effective in correcting the gaps and amplifying the successes?

The first observation is that we often find at the start of our interventions that most stakeholders at clients’ end and their suppliers are not aligned, both on the objectives of the campaign and on the monitoring/success indicators.

Thus, it is not uncommon to see questions arise about the definition of objectives and the choice of indicators when sharing the results of a campaign.

Or that a campaign is vastly over-invested to ‘guarantee’ target performance, far beyond the actual reach finally observed

The second frequent observation is that there is a plethora of service providers and terminologies, a multitude of dashboards and indicators, generating complexity, misunderstandings, misalignments and, ultimately, major difficulties in deciding how to act.

Recent times have undeniably accelerated the performance imperative of marketing activities.

What is well conceived is clearly stated : let’s focus back to the basics to simplify.

Setting up dashboards, building performance measurement and improving resources :

1. Alignment of stakeholders with the objectives: develop image and brand preference, increase margin per customer, develop online sales volumes, prioritize sales of certain products, etc.

2. The search for marketing KPIs that will enable their evolution to be correlated with business performance in a robust and sustainable manner,

3. Highlighting performance indicators (the components of KPIs) that will allow us to analyse what is working and what is not in order to focus on the right area for improvement,

4. The robustness of the methodology, which is essential to  implement the indicators (customer, date, country, products, etc.) that will ultimately enable the effective levers that have been activated, that can be activated and their effects to be identified in detail.

This pyramid is essential and under-estimated : dashboards are frequently focusing only on the two lower levels. Raw data processing can be expensive, we must go back to make decisions while letting appropriate teams find solutions in order to increase efficiency and reinforce everyone’s mandate

Measuring the ROI of actions :

The illusion is often there: believing that the multitude of data available makes it possible to measure ROI much more simply than in the previous world, where media was 100% offline.

To target offline investments for branding and digital investments for traffic and performance is a simplification that has long been proved wrongby the concrete and strong results of most brands.

Reality is rather different :

It is in an objectively more complex environment that brands have to perform, make their trade-offs and monitor.

Many of these are based on econometric analysis, whose often partial conclusions contain a level of complexity that makes their use/impact often disappointing.

We favour an approach based on the analysis of the TCO of campaigns
(Total Cost of Ownership).

With the help of the finance/purchasing and cross-functional teams, we isolate « benchmark » campaigns in order to build up the full cost of creation/production + media + FTEs involved and relate it to sales/margins (turnover or units sold).

This analysis is very rarely carried out, with the exception of certain e-commerce players: short-term business pressure, incomplete data, difficulties in constructing robust TCO scopes, less agile matrix organizations, lack of availability of teams, cross-business communications and sharing, weekly or daily campaigns, internal hurdles, etc.

Consumers’ relationships with brands will continue to be profoundly reshaped by digital developments: marketing teams are navigating a new horizon, using multiple and ever changing levers to effectively support the business.

The most mature brands in their digital activities have been able to take advantage of these opportunities to significantly lower their overall media investments while strongly increasing their revenues : exciting challenges ahead !