Too many metrics: the perils of training marketers to calculate ROI

The life of marketers “is chaos and it’s only going to get worse,” said Unilever chief marketing officer Keith Weed at the Cannes Lions festival this summer, explaining how things have changed more in the past five years than in the previous 25.

Tata Steel metalworks

One of the most profound changes is that more than ever marketers need a head for numbers, to enable them to forecast and evaluate the returns on all of their marketing activities, which are becoming more spread out across digital channels and demanding investment decisions to be made quickly. But not all marketers are confident that they have acquired the necessary skills.

Research by digital agency Omobono shows that 70 per cent of marketers in the business-to-business sector admit their team has “gaps” in the digital skills they require. Most notable is the lack of analytics and reporting skills. For example, two in three of those surveyed measure return on investment (ROI) but only 16 per cent are confident in the accuracy of what they are doing.

“It’s now art and science in equal measures,” says Dominic Grounsell, marketing director at RSA. “To operate in a digitally-enabled world, marketers must be able to collate, interrogate and operationalise data in real time and that creates challenges.”

Yet not all brands have made it a priority to give their marketers a firm grounding in these disciplines through training. “We have been running this survey since 2011 and ROI has always been top of the challenges that marketers face,” says Omobono director Francesca Brosan.

Given the volume of data that marketing teams have and use daily, they would appear to be well equipped to measure ROI, but with so much of it across many touchpoints, the question is where to start. With so many ways to measure ROI, there is not necessarily a one-size-fits all approach to training marketers to calculate it and build business cases, even though the Chartered Institute of Marketing, for example, offers courses on monitoring and measuring effectiveness.

Fujitsu printer
At Fujitsu, marketers have to prove their credibility at board level more than ever while Tata Steel (main image, top) always questions whether its methods are really working

“In a world where there is infinite data available at our fingertips it can be tempting to go crazy and analyse the whole lot, but fine-tuning and being precise is vital to ensuring that ROI remains high and time is not wasted,” says Francisco Marco-Serrano, a senior lecturer in economics and an expert in digital strategy and social media marketing at GSM London (formerly Greenwich School of Management).

With Facebook and Twitter attracting millions of users, many brands jumped on the bandwagon of adding ‘likes’ and the balance of positive versus negative tweets to their marketing metrics. This is similar to when ‘clicks’ became a standard measure on websites or ‘opens’ in relation to email marketing, yet training marketers to believe these are robust measures of purchase behaviour or engagement is not sufficient.

It is widely understood these are far too simplistic, says Clare O’Brien, senior industry programmes manager at the Internet Advertising Bureau UK. However, there are no hard and fast rules for new measurements in today’s multichannel customer experience and this can make knowing what to teach marketers to measure more difficult. “People want proof that something works and they want to reduce it to a benchmark number they can use,” explains O’Brien, “but if you stick with old volume measures, then you might miss the point.”

“To operate in a digitally enabled world, marketers must be able to collate, interrogate and operationalise data in real time and that creates challenges”

Dominic Grounsell, RSA

Josh Graff, senior director at LinkedIn EMEA, agrees. In fact, he says it is vital that marketers are taught to look beyond the tangible measurements of likes, shares and comments and understand how these translate into effecting business objectives – whether it is raising brand awareness, customer acquisition or shortening the buying cycle.

“As an industry, we’re guilty of focusing on short-term metrics, which fail to offer a holistic view of how campaigns fit together to reach the same goals. There needs to be a shift in thinking long-term, where marketers are always ‘switched on’ and looking for ways to build more meaningful relationships with consumers,” he explains.

RSA’s Grounsell agrees that marketers need to learn to act faster. “Digital brings cycles every day or even every hour – and that means you have to move with the speed of the market to stay ahead of it. You can’t say ‘in six months’ time we’ll spend £10k on X’. You spend the money on Tuesday, analyse what’s happened on Wednesday and make another decision on Thursday.”

According to Luke Griffiths, head of marketing solutions EMEA at eBay Enterprise, marketers should become familiar with the increasingly sophisticated models of attributing online sales.

Griffiths explains: “Where previously you might have only reviewed ROI on spending for individual channels on an annual basis when preparing the next year’s budget, you can now identify and respond to trends and marketing successes in close to real time. This enables you to adjust spending more dynamically, and even to predict future behaviours and shape activ+ties accordingly.”

Not all sectors have to move at that kind of speed. For example, no one is likely to commit to a five-year supply contract on a whim or add 10,000 tonnes of steel to an online shopping basket. Kevin Buttery is digital marketing communications manager at Tata Steel where negotiations can take years to come to fruition; this makes it difficult to measure the conversion of marketing-generated leads, he admits, but tactics are always evolving.

“There used to be more reliance on a centralised management information resource, but measurement now draws on data from specialists such as digital delivery teams, agencies and the boots on the ground, such as customer facing staff collecting leads at trade events.”

Buttery regards measurement of ROI as the holy grail for marketers. “I don’t think we’ll ever be satisfied that we have perfected it,” he says. “But we need to be careful in ensuring the required metrics are stable over a reasonable period, so we can measure improvements in the effectiveness of the communications we are pushing out to the market, rather than switching to a different set before we have learned something from the last ones.”

As O’Brien at the IAB puts it, the sands are constantly shifting. This makes training marketers in measurement tricky, but one thing that should be encouraged by employers is experimentation with different models.

“As an industry, we’re guilty of focusing on short-term metrics, which fail to offer a holistic view of how campaigns fit together to reach the same goals”

Josh Graff, Linkedin

Skillsets are also evolving. The move into ROI analytics, big data and so on can be scary for some and it will be much easier to train marketers if the company already gets them to perform data analysis, says GSM London’s Marco-Serrano. “[In those cases] there will be a ready-made data culture in place. But if data is an alien concept, don’t start thinking about outsourcing until you have exhausted all options in your own business.”

This is what smaller brands are doing. The marketing team at business telecommunications and IT provider Daisy Group is “using all the analytical skills from other teams”, says marketing director Kate O’Brien. “As marketers we’re famous for being great with words, but you need to be great with numbers – that is what drives the business.”

For entrepreneurial businesses without huge marketing budgets the onus on staff being capable in measurement can intensify. “If we spend £1, we have to demonstrate it will bring back £2,” she continues. “With those kinds of measures and that type of return, it enables the leverage for future campaigns, future spend and demonstrates the commercial role of marketing.”

According to IAB’s O’Brien, whether or not marketers are scared of analytics and data, in terms of their professional development they should “remind themselves that they still want [to drive particular customer] behaviour from their marketing spend – that simple premise should always be the starting point”.

Top 3 challenges

1. Understanding online attribution

“‘Last click’, the model by which marketers have traditionally assigned credit to the final engagement channel as the driver of a sale, is increasingly a blunt tool. In today’s multichannel retail landscape, where consumers engage with brands on a range of platforms and across multiple devices within a single purchasing journey, last click presents an incomplete picture of marketing ROI.

“To accurately measure the impact of marketing spend in each channel, marketers must be equipped to understand customer engagement with those channels at every stage of the purchasing journey, and to interpret the impact that each channel has on the purchasing decision, so that they can scale up or down their per-channel spending as appropriate.”

Luke Griffiths , head of marketing solutions EMEA, eBay Enterprise

2. Learning to build a short-term business case

“Marketers have to prove their credibility at board level more than ever before, so they have to back up their argument with numbers. This has also resulted in some difficult compromises. Marketing tends to lead to long-term benefits for a brand, yet boards are usually concerned with only short-term gains – in-year sales, immediate customer responses – perhaps in part because boards themselves are judged in a similar short-term way by shareholders, analysts and the media.”

Simon Carter , executive director of marketing, Fujitsu UK & Ireland

3. Turning disparate data into ROI measures

“Data accuracy, the right tools and a lack of training are some of the areas that can cause concern when it comes to big data. Some would say they are separate issues, but for me they go hand in hand and one cannot work without the others. All three need investment and commitment from your business if you want to have confidence in your ROI numbers.”

Jay Karsandas , digital marketing manager, Mobiles.co.uk

Q&A: Kevin Buttery

Digital marketing communications manager Tata Steel

Tata Steel
At Tata Steel, promoting engagement with customers is just as important as new acquisitions

Marketing Week (MW): Has understanding how to prove return on investment become a more important skill for marketers to learn?

Kevin Buttery (KB): Absolutely. During an economic downturn, difficult but fair questions are being asked of the tools and techniques marketers are using. It’s a welcome challenge, because it gives us the opportunity to promote what we do and prove our worth to the organisation. But at the same time we’ve had to ask: is what we’re doing really working?

MW: What are the most valuable metrics marketers should be taught, to measure ROI?

KB: We’re looking at lead generation and engagement through digital marketing and social. In an industry where changing supplier can be measured in years rather than minutes, we recognise that promoting engagement with customers is as important as new acquisitions, so we measure customer satisfaction as well.

How ROI is measured will depend on the tools we’ve used for a campaign. Some will be internal via centralised teams at zero perceived cost. Others are executed externally and the metrics will depend on the objectives for that activity.

MW: What techniques and tools are important in an industry with long lead times?

KB:  For us it’s difficult to measure conversion of marketing-generated leads. We’re in the business of facilitating the discussion between prospects and sales teams. These negotiations can take years to come to fruition and creating a CRM system to track these leads across different languages, cultures, time-zones and a diverse customer base is a big challenge. But we are tackling it.

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