Three pillars can simplify measurement for marketers – Nielsen - Social Media Explorer

While marketing budgets were always under scrutiny, it is clear that the coming of the pandemic infected two years ago has highlighted the necessity for effective and efficient spending. This has increased the importance of precise and holistic measurement as more brands use new channels and platforms for marketing.

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After a dip in the first half 2020, marketers are spending more this year to explore new platforms and channels. That spending aligns with sentiment from marketers surveyed for SME’s 2021 Annual Marketing Report who cited customer acquisition and brand awareness as their top priorities. Retail, for instance, saw brands increase their advertising spending by a significant amount last October.

The importance of tracking ROI increases with increasing spending. Marketers often view mass reach as less effective than digital conversion-oriented marketing campaigns, because they are more difficult to measure with modern martech tools. And while SME’s experience base shows that on average, a 1-point gain in brand metrics such as awareness and consideration drives a 1% increase in sales, marketers surveyed for our annual marketing report aren’t confident in their existing marketing technology. There is an average 16.7% confidence in the existing martech across brands, regardless of their budget. Importantly, the introduction of new platforms, devices and channels—along with enhanced privacy considerations and the depreciation of third-party identifiers—increases the complexity that martech solutions need to account for.

SME believe that brands need to focus on 3 pillars as complexity increases.

  • TrustIt is crucial that measurement is taken by an independent third party, not a media vendor and paid for directly by the advertiser.
  • ComparabilityTo be able understand the relative performance of channels, it is important that brands can accurately and consistently compare them for large media budgets.
  • Adaptability: For the largest components of a media budget, brands need to move from measuring what happened at the executed level—to what could be achieved. It will allow brands to improve, not just validate that their marketing strategies work well enough. The smaller parts of the media budget will be required by brands to be able to learn and test to determine if successes are scaleable and if there is a need to invest in failings.

Objective is more important than measurement. Measurement is not a one-size fits all solution. There are many media options, and martech solutions can add confusion to the mix. Across the realm of measurement capabilities, marketers tell us they’re least confident with measuring awareness, full-funnel ROI and multi-touch attribution (MTA).

Following on the three pillars for success, marketers should leverage solutions that facilitate de-duplicated measurement across all channels—including digital channels that are less open (e.g., walled gardens)—and yield comparable metrics.

They should also ensure they can remix the solutions to their investments, rather than confirming that certain channels work and provide lift. SME Total Media Resonance data shows, for example that channel with the greatest investment is the one that produces the largest lift. It’s approximately 70%. There is also a limit on how much lift a channel can provide. It is only 4% of all the time the most profitable channel for investing.

Marketers’ lack of confidence in full-funnel ROI measurement isn’t surprising, given that standard solutions do not account for upper- and lower-funnel marketing efforts in the same solution. Marketing professionals should understand that they need both near-term sales and brand awareness, following the same pillars as adaptability. 

We believe there are two immediate solutions to this problem: marketers can run MMM research for short- and long term ROI, and/or do sequential optimization. MTA is the second major challenge. Marketers should ensure that their MTA solutions take into account the entire consumer journey and not just the last or first point. And pulling from the adaptability principle, marketers need to continually re-evaluate their MTA platforms to ensure they’re responsive to the prevailing trends in the market with respect to data availability.

As with most marketing challenges, measurement becomes much more manageable with data;data that’s holistic, allows for comparability and is adaptable to evolutions in the industry—including those pertaining to privacy and platform proliferation.

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