Measurability - The New Holy Grail - August Issue 2009

By Jeremy Glass, Permission Managing Director

A recent study by Forrester Research revealed that 45% of surveyed CMO's facing budget cuts said they had cut expenditure on traditional marketing (branding, advertising, print, TV, magazine and radio) because they 'can't track the results'.

This insight signifies the importance of campaign measurability in these tougher economic times and the increased adoption of digital channels in the marketing strategy.

Tracking the return on investment within traditional marketing channels, such as TV and radio, has proven to be a challenge for marketers in the past. As the global financial crisis forces marketers to illustrate the ROI on ever dollar they spend, many are turning to highly measurable channels to execute their marketing strategies.

What channel are they turning to? According to the 2009 Marketing Directions Report 58.2% of marketers stated that they would be doing more email next year. Email and internet advertising are being allocated the highest share of the marketing budget in 2010 and continuing on in 2011.

John Wanamaker, a highly successful US department store mogul of the early 20^th century, famously said "Half the money I spend on advertising is wasted; the trouble is I don't know which half". Digital marketing channels, and particularly email, are providing marketers with a way to track the ROI on each marketing dollar being applied.

Not only can ROI now be measured more simply through email analytics but consumer behaviour towards email communications, banner ads and websites can also be tracked to develop better insights into the way consumers engage and interact with digital marketing initiatives.

Many marketers would argue that as long as they measure how many units they sell through their campaigns what else really matters? Any marketer who thinks measurability is not an important part of marketing has their head in the sand!

What matters is what drives your customers to purchase from you and why? Understanding if your content or calls to action are driving your sales is highly important in developing successful campaigns that drive sales.

Being aware of how your customers interact with your communications and other elements of your campaign and the effect this has on their propensity to purchase from you is crucial to hitting sales targets. Launching a campaign without these insights can be a 'stab in the dark' and 'fingers crossed' scenario.

That's where measurability and campaign tracking play a crucial role. With these insights marketers can test different email creative, content and subject lines in order to determine the most effective combination of elements to generate successful, relevant and engaging email marketing campaigns.

The concept of campaign measurement can be daunting for many marketers with uncertainty towards what and how much of customer activity and interaction should be tracked, measured and analysed.

The best place to start is to identify what information is useful to you as a marketer to be able to better communicate with your customers and develop more effective digital marketing campaigns. Once you know this begin to track those elements which provide the insights.

Below are listed the Top 5 elements to track in an email marketing campaign:

• Open Rate: Open rates are a great indicator of the effectiveness of your subject lines. These are the key to getting customers to open your emails and read about your offering.

• Click Through Rate (CTR): How engaging is your content? Your CTR can tell you. The more your customers engage with your content and click through on links to more effective your communication will be.

• Conversion Rate: This is your how many did I sell today indicator. A must have metric to prove your campaign strategy is working!

• Unsubscribe Rate: Your we're not doing so well indicator. You want to retain and grow your list. If its decreasing faster than its growing its time to take a 2^nd look at your approach.

• Bounce Rate: If your emails are bouncing back it means you better look at your email list hygiene practices. Keeping your list clean and tidy is very important to maintaining accurate metrics.

It seems that the ability to measure the effectiveness of a marketing channel and the campaigns pushed through that channel are becoming the holy grail of marketing in the future. Accountability for marketing spend will only continue so if you're looking for a solution to this challenge, consider digital.