Data, old-school metrics and walled gardens: measuring ROI can be a tricky business

It's a tricky business

The Drum, in association with DataXu, attempts to shed some light on the complicated issue of ROI measurement during a roundtable on effective marketing.

Measuring return on investment (ROI) is a huge challenge for marketers, given the number of marketing channels today. Research from DataXu shows that 23% of agency workers believe they are spread too thinly because they have to manage multiple platforms and constantly keep up with new developments. Duke University’s CMO survey found that barely one in 10 marketers is confident they are accurately measuring the returns from social.

So how can marketers make sure that they are measuring marketing ROI? The Drum, in association with DataXu, gathered senior marketers from a range of sectors to discuss the complicated customer journey, hiring talent and Facebook’s miscalculated metrics.

Hiring the right talent is still a challenge

With the increasing importance of data and analytics, the roundtable starts off by discussing whether any of the experts present have dedicated staff focusing specifically on adtech or martech. Many agree that the problem of where marketers fit with data and analytics remains uncertain.

For Christian Ohm, European manager of brand strategy at Mazda Motors UK, “it’s not black and white”, because everyone needs to remind themselves why marketers exist in the first place.

“The role of marketers is to build strong brands, deliver on profits and be responsible for creating demand,” Ohm says. “That’s the key strategic objective you have as a marketer, and that’s what you should be measured against.”

Marketers need to get serious about hiring data scientists if they want a competitive edge, says Zoe Ashford, former head of marketing at John Lewis. “In marketing, you’re so data-driven that you need this capability, not only to understand data but also to set data up. To use tech and attribution is a really good example of that.”

Times have changed from the days when developers used to be ignored at the back of the room, says Frank Durrell, global director of digital communications and innovation at Jaguar Land Rover jointly owned agency Spark44. “They’re not human calculators but can represent what they do in a human way. Hiring the right talent as well as framing them in the right way within the business is a big challenge for us.”

Anthony Newman, marketing director at Cancer Research, points out the challenges in prioritising the right business insights: “Sometimes the ‘geeks’ can become very interested in things that the business doesn’t actually need to know about. That can be resolved with great leadership and management, but I find it a struggle.”

Katie Hollier, head of marketing, digital services at O2, agrees that the skillset needed now is very different from the recent past: “It is very technically and analytically based. If you don’t have those skills, then it’s a real issue.”

Still using old-school metrics

So how is ‘success’ actually being measured in marketing today?

Kevin Clapson, vice-president of display advertising at TripAdvisor, finds it “mind boggling” that despite the industry buzz around data, marketers are still not utilising it.

“[So many] people are still stuck in a last-click or last interaction kind of world and using virtually identical metrics for attribution [to those that were used] 10 years ago,” Clapson says. “There is so much data now it seems crazy that we are still chasing old-school metrics.”

Ralucca Efford, head of digital and social media marketing at Direct Line Group, says: “50% of clients are still measuring their marketing investments based on last-click.” For Efford, when marketers lose control of their own agenda and “outsource their thinking” to someone else, it’s a dangerous route.

Last-click is not all bad

But not everyone at the roundtable is against last-click attribution. Stephen Vowles, marketing director at Argos, says that while last-click has its limitations, it can be useful alongside other metrics.

“The issue with media-mix modelling is you can’t use that across general merchandise,” he says. “We work across a ton of categories with huge numbers of search terms, so we can’t use media-mix modelling to run the business on a day-to-day or week-to-week basis. We use a last-click model, but we also use an attribution model to moderate behaviour so that we are not drawn into the trap of ‘It’s all about the last click’.”

Are brands making investments based on ‘misinformation’?

DataXu’s managing director for Europe and emerging markets, Chris Le May, says he sees a lot of brands doing measurements based only on correlation, despite not actually knowing what caused the consumer to actually engage with the brand in the first place.

“If you are making large investments based on information that could potentially be misinformation, you are actively diverting budget into something that doesn’t work. There are better ways of doing it. My wish is for senior leadership at brands to allow their marketing divisions a little bit of freedom to experiment with other ways.”

The customer journey across a global landscape is complicated

The discussion moves on to the customer journey. Mapping this out in a world of online, in-store and customer services is a tricky business.

Vowles admits that Argos’s “unusual business model” allows it to have more of an edge on the customer journey, compared with its competitors. “Because we can see that journey, we know way more than some,” he says. “I think bringing that data into an integrated marketing model is a huge upside and a key challenge, but [we have not] quite got there yet.”

Durrell says that just because you are a global platform doesn’t mean you have one approach: “The last thing you want is a generic global view coming out from a bunch of guys in Birmingham about what people in Shanghai do to buy cars.”

David Parkinson, head of digital in Africa, Middle East and India at Nissan, points out how technology is shifting platforms, yet the marketing industry is still not well connected: “We are having to make educated guesses because the tech for us isn’t end-to-end. It’s not connected from our media agencies to our website platform.”

A gaping hole in Facebook’s walled gardens?

Facebook is working on regaining the trust of advertisers after its measurement glitches became apparent. Marketers are wondering whether an admission of multiple calculation errors in its systems, which affected the accuracy of metrics coming from its video, Instant Articles and other products, will force Facebook to now become more transparent.

“I would always be a bit nervous about spending [money] in a place where I didn’t really know exactly what was going on behind the scenes,” says Clapson. “You have to ask yourself why. Maybe I am cynical, but there is probably a reason why they don’t want to share that information.”

Durrell wonders why marketers care only about Google and Facebook, while forgetting the impact of wider global players such as China’s Baidu and Tencent. “Look at WeChat, Baidu and Tencent – they won’t even let you link from one platform to another. Then you go to Korea and see all the new messaging platforms coming out, such as Viber. It’s terrible that there’s fraud, but again, you go to Russia and the fraud that Facebook did was like something that might happen within half an hour in Russia.”

Parkinson says proceeding with too much caution may impact the industry in other negative ways: “If we slow that pace too much to really tie these metrics down, then I think we may lose out on the ability to move forward.”

Newman remains unperturbed about Facebook’s inaccurate measurement revelation because he is confident about the information he is getting from the platforms. “This stuff about Facebook’s measurement coming out incorrectly didn’t bother me too much because I know it’s working,” he says. “I know that I’m getting really high conversion rates on Facebook. If any platform lies or just gets it wrong about how well they are performing, in the end it will start coming through.”

While there are still challenges associated with measuring marketing ROI successfully, there are ways for marketers to strategically tackle them. By being on top of data and ditching old-fashioned metrics, marketers can step up their marketing effectiveness and drive their own destiny.

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