Marketing Leaders Must Take an Integrated Approach to Marketing Measurement Methods for Maximum Insight
Marketing leaders are increasingly responsible for the delivery of sales and revenue, and are faced with the challenge of optimizing the impact of marketing investments beyond their isolated and relative performance, according to Gartner, Inc. To gain a deeper understanding of marketing’s impact, Gartner research shows there are four distinct methods that marketers can employ to gain deeper insights.
“Competitive insights and analytics are what marketers need to progress to higher levels of maturity, understand ROI, inform investments and optimize campaigns in real time,” said Joseph Enever, senior research director, Gartner for Marketers. “And marketers are backing this view with resources.”
According to the Gartner CMO Spend Survey 2019-2020, market research and competitive insights and marketing analytics now absorb more than 13% and 16% of marketing operations budgets, respectively. However, evidence from Gartner’s Marketing Data and Analytics Survey indicates investments are mismatched with their output, presenting a significant risk to the ongoing investment.
To get a better understanding of the impact of marketing investments, marketing leaders should consider the following marketing measurement methods:
1. Marketing Mix Modeling (MMM)
MMM is a top-down methodology that uses time series, aggregate data (such as historical sales), aggregate media spend by channel or geography, competitor promotional events, or pricing, and econometrics techniques (like multivariate regressions), to generate models. Marketing leaders should use MMM to inform multichannel marketing investments as it can generate a broad range of insights, including the most prominent and sometimes elusive insight such as sales and revenue incrementality.
2. Multitouch Attribution (MTA)
MTA is a bottom-up approach requiring user-level data to identify the relative contributions of consumer touchpoints along the path to a goal. Digitally focused, MTA is primarily a methodology for online marketing analysis, but it can also include multichannel events, depending on the available data and provider. It gives marketers the ability to track an individual’s path to conversion across multiple touchpoints, such as paid search, display and video.
3. Holdout Testing
Holdout testing, often referred to as test and control, is a crucial method for testing hypotheses. When conducted properly, marketing leaders can utilize holdout testing to accurately quantify the incremental impact of marketing investments across channels and tactics.
4. Unified Measurement Approaches (UMA)
UMA answer questions that span both the tactical and strategic impacts of marketing. These approaches attempt to resolve the challenges of disparate, unlinked methodologies and insights. Marketing leaders looking to understand the impact of online and offline marketing should look to UMA.
“Successful marketers use several of these methods because each provides unique insights and addresses different challenges,” said Enever. “For example, building a measurement strategy that lays the data foundation effectively for MMM and MTA is essential for facilitating UMA. Whichever method a marketer chooses, it is best when used within a wider ecosystem of measurement — not in isolation.”