Tracking Campaign Metrics

Let us start with a small quiz - you will find answers to the questions at the end of this post.

1. Assume that you are the CEO of a F500 automobile company. What would be your purpose behind running a marketing campaign ?
a) Brand Building
b) Increased Car Sales
c) Increased Leads
d) Both a) & b)

2. Assume that you are the VP Marketing of a F500 automobile company. What would be your purpose behind running a marketing campaign ?
a) Brand Building
b) Increased Car Sales
c) Increased Leads
d) Both a) & b)

3. Once you have allocated the marketing spend to various media channels, how would you judge the effectiveness of the media channel ?
a) I will select the media channel only if I am sure it will be effective
b) Effectiveness will be measured by the number of people who see the ad ( or click it if the media is online )
c) Effectiveness will be measured by the number of people who purchase cars through that channel
d) Effectiveness will be measured by the popularity of the ad for offline media and ( search engine ) ranking of the ad for online media

Now that you have selected your answers, I must tell you that the focus of this post will be on question 3 above and I am surprised how few people can actually answer the third question correctly. Think about it for a moment - if you are running an ad campaign, wouldn't you want to track all the time how well the campaign is doing ? More importantly, if your business is to sell cars, wouldn't you want to know how many cars is the campaign helping you sell ? Wouldn't you want to know how much it costs you to sell a car through the media channel ?

It sounds really counter-intuitive, but when it comes to tracking ad campaigns, a lot of marketers make the mistake of using intermediate metrics like web traffic generated or search engine ranking instead of using ROI or sales oriented metrics. A part of the problem is that tracking an ad campaign against ROI metrics is significantly harder, but for the benefits you get, it is a small price to pay.

As an example, how would you attribute credit to an online campaign for conversions that happen offline if you are not tracking your campaign on a sales oriented metric ? Well, the answer is that you would not be able to attribute sales to the online campaign, which eventually means that your metrics portray the channel as less effective than it really is. If you continue to percieve the channel's performance that way, it would not be long before you declare the channel ineffective and stop using it completely - all because you were using the incorrect metric for tracking it in the first place.

So is using a ROI or sales oriented metric the solution to all problem ? Well, as I think more about it, I realize that we haven't even touched the real problem so far. The real problem is the existence of multiple media channels, every channel so diverse that there can be no common platform to track its performance. The usage of incorrect metrics is only a way in which the problem manifests itself today.

The solution to the real problem lies in taking a holistic view of your media channels and understanding how they work in synergy with each other to help you achieve your targets. ROI or sales based metrics are really the first step in understanding that synergy. There is a long long road that lies ahead and we shall never be able to tread on it if we are scared to take the first step.

Answers:
1. Increased Car Sales. A CEO always cares about the core business and if the company is into selling cars, then the motivation behind the campaign should be to sell more cars. Yes, brand building is important, but the end goal of building a brand is again to sell more cars. A CEO would treat brand building as a side effect of achieving his target - afterall, if his cars sell more than his competitors, doesn't that give him a good brand anyway.

2. Increased Car Sales & Brand Building. Since you are VP Marketing, you would be concerned about the brand as well in addition to achieving the target sales. For you as the VP Marketing, brand building is one of the goals, not just a side effect. Infact, a VP Marketing would sometimes go to the extent of considering just brand building as their end goal, considering that a good brand would help them sell more cars then their competitors.

3. Effectiveness will be measured by the number of people who purchase cars through that channel. If you have read through the blog, you would know why.