Tocquigny

In the last several years, the concept of Marketing Performance Measurement (MPM) has gained acceptance throughout corporate organizations. Born out of the reckless spending habits of the tech boom and the advent of new technologies to provide better insight into marketing results, MPM is defined as the establishment of metrics and measures by which the marketing function can be managed and evaluated. Even though many organizations are aware of the measurement concept and its benefits, they are still struggling with how to practically infuse this quantitative approach to marketing into their organization.

This article addresses the practical implementation of this concept in today’s corporate environment. While the actual metrics and measures are essential to drive effective and accountable marketing, we will focus on the balance of the three primary components that provide the foundation for proper MPM execution: Technology, Process and People.

The concept of MPM is not a new one. Utilizing Database Marketing principals, corporations and agencies specializing in Direct Mail, Telemarketing, and DRTV have been utilizing some type of MPM for years to project, track, and report on marketing performance. With the growth of Internet advertising and dramatic increases in tracking technologies, database and Business Intelligence (BI) platforms, marketing executives now have the technical capability to better plan, measure, and analyze marketing initiatives.

In a recent study from the CMO Council, surveys found that sales growth, market share and profitability were all increased in organizations with a comprehensive MPM system in place compared to those companies that lacked an MPM system. There were statistically significant differences in company performance by level of adoption of MPM. Specifically, companies utilizing MPM significantly outperformed companies that had not entered the consideration phase, with mean performance ratings 29%, 32% and 37% better in relation to sales growth, market share and profitability.

In the same study, 90% of the 1,000 CMO’s surveyed rated MPM as a high or moderate priority. The key motivators behind the trend were improved marketing resource allocation and departmental effectiveness, increased pressures for financial and corporate accountability, and ROI tracking.

People Must Be Dedicated to Marketing Operations

With the best processes and technology in place, there must be a person or group responsible for pushing this discipline through the organization by collaborating with multiple internal and external parties in order to affect positive change. Typically, this function is attached to a Marketing Operations Specialist or Consultant with a background in technology, analytics, and marketing. Depending on the size and structure of the organization, this responsibility may fall on a team or task force from different functional areas rather than a single individual. The role of this person or group is to manage the infrastructure necessary to consistently provide and replicate successful marketing results on an ongoing basis.

After receiving buy-in from the CEO or CMO for top-down support, Marketing Operations will liaise between departments to collaborate on process, define roles, and establish key terms like the true definition of a lead, qualified lead, or a hot lead. They will also work with all key stakeholders to align the metrics and measures to the business objectives of the organization or specific marketing program and ensure that the primary metrics affect marketing performance.

This person or group will also ensure that the proper staff have access to — and support for — the technology in place to track, analyze, and distribute results and insight from the marketing programs. The takeaway here is that Marketing Operations leverages both the systems and the processes to enable successful and consistent performance in all marketing campaigns.

Processes Ensure Consistency and Long-Term Success

As developers will tell you, business rules must be developed and documented in order to translate the required elements from people to the technology before any coding begins. The business rules for MPM are no different, necessitating cooperation and agreement from multiple groups in order to form a roadmap for execution and sustained success. With multiple parties involved from budgeting and planning, project management, workflow, execution, and analysis and reporting, MPM will aid in closing the loop in the marketing process to support decision-making and minimize risk.

Marketing Operations will develop and document the processes that an organization uses to form the foundation for proper MPM. Documentation is critical for long-term success of this function due to the dynamic nature of the marketing industry itself. When critical information is stored only in the memories of a few people as opposed a file server, knowledge can be lost along the way. MPM encourages knowledge archiving and information sharing to handle this challenge.

Technology Enables the People and Processes

With the advent of more recent and fragmented marketing technologies such as blogs, mobile, and podcasting, it is next to impossible to plan, serve, track, and report on all marketing channels in one application. Getting the information out of one or more of these systems and into databases for comprehensive analysis, as well as reporting, is a time and budget-consuming process. There are technologies that do a fairly good job of addressing parts of this technical problem, but none that do it all without significant investments.

In the last several years, advances have been made in tracking all of the emerging marketing vehicles. Leading ad management and ad-serving vendors have established systems that started with simple ad-serving, tracking, and reporting of online ad units and expanded their capabilities to track anything displayed via HTML and clicked with a re-direct. Costs to execute this type of tracking and reporting have also decreased substantially in the last couple of years. These vendors do a great job up to the click but then miss several interactions that may occur until the final conversion is reported from a ”Thank You” page — especially if traffic is generated to a website or landing page that leads to a site.

In cases where the destination is a website, ad servers will track a user-click in a click-through or a resulting visit (without clicking) after viewing the ad in a view-through. Then complementary downstream web analytics technologies fill in the missing information gaps by showing navigation paths taken to conversion. Data integration takes place between these two technologies by utilizing tracking parameters in the referring URL string, 1x1 pixels, JavaScript, and cookies to determine where the visitor first viewed the communication and where they ended their journey at a final destination. This data integration can be somewhat complex depending on the number of variables and degree of variance between campaigns being executed.

The growth of cooperation and resulting APIs between ad servers and web analytics vendors has benefited the marketing performance measurement process, but combining all of the information necessary to holistically improve program or campaign performance is still problematic. Details on optimal navigation path, depth, and leakage don’t make it upstream to ad servers. Budgetary and other plan details are not carried downstream to web analytics tools to provide the specific cost-pers and other data from the specific campaigns. While it is not necessary in every case to track every minute detail in this process for optimization, it is important to have the capability to drill down to that lowest level of detail if needed.

There is a fundamental need to integrate marketing data at all points within organizations. Most often, proprietary databases, data warehouses, or data marts are developed to translate the transactional information into decision support tools commonly referred to as Business Intelligence (BI) systems. These horizontal applications are somewhat generic, designed to take any type of data from multiple disparate systems into a format more suitable for reporting and deeper analysis. The business rules mentioned previously are once again applied at this stage to integrate the data into accurate, consistent, and meaningful information. In addition, external data sources can be appended at this point to provide for more information on the detail collected.

Once the data is combined into a more user-friendly format, analysis can be performed and reporting can be generated from one single source. BI systems have a strong analytical component that allows for easy aggregation, visualization, and data mining for trends in data that may not be as visible through normal reporting. Analysts can then isolate patterns in the data to drill down or drill through to the underlying detail that helps to answer the “why’s” that arise out of marketing analysis. These systems also provide the real-time, or near real-time online reporting and dashboards with different access and permission levels for partners and clients.

People, Processes, and Technology — Together at Last!

The technical aspects of MPM are complex, but with the right people and processes in place, the data can come together from planning to analysis and back around the closed-loop to provide for marketing optimization. As the three primary ingredients of MPM start to congeal, the entire marketing practice will start to become more methodical, organized, and streamlined. Over time, organizations will begin to realize the overall benefits gained from MPM including accountability, manageability, and predictability of marketing programs, resulting in a substantial reduction of risk to ongoing marketing expenditures.