No question, the rise of Big Data in marketing unlocks major, industry-shattering opportunities. But with terabytes of data available to crunch into actionable intelligence, Big Data can also be a big time drain.
That’s why marketers are increasingly relying on “Smart” data instead of Big Data in their customer intelligence. They focus on what works over what is available. Inspired by this shift towards quality over quantity, many marketers are also taking a second look at the Key Performance Indicators (KPIs) for measuring the results of their marketing.
Results are a big deal in this data-driven age, as anyone who’s every negotiated new digital marketing budgets will attest. Results affect bottom lines. They represent Returns on Investment. They attract streams of Big Money into digital marketing, for instance into the $13 billion per year digital-display ad market.
But while confidence in data-driven marketing is soaring – 74% of leaders in the field report competitive advantages and increased revenues thanks to data-based initiatives (Forbes) – some marketers are starting to doubt whether their results are derived from the right sets of performance metrics.
These numbers don’t lie, right?
Adding fuel to the uncertainty, certain time-honored Internet KPIs have come under scrutiny recently. First in line, click-attribution models are under fire in the cross-device, mobile-connected user landscape.
The main argument against click-attribution is that marketers are having trouble following customer journeys across different devices. The same person visiting a website on mobile, tablet, and desktop may count as three different visits with conventional tracking.
This, by the way, greatly emphasizes the need for omnichannel solutions with cross-device capture into 360-degree customer profiles, such as the Selligent platform.
The end of click-attribution also sheds a dubious light on other metrics, including Facebook’s latest definition of “guaranteed impressions.” According to Facebook, an advertisement counts as a guaranteed impression when passing through a person’s screen in its entirety – even for a matter of milliseconds. Photo-sharing site Snapchat employs a similar model, counting ad impressions even when users quickly skip ahead.
Meanwhile, users are only part of the problem. Research by ANA reveals that 11% of online display ads and 23% of video ads are displayed to robots, not actual users. This further hammers home the fact that click-attribution as a KPI may be inherently kaput.
Finger on the digital pulse
With that said, it’s high time for a new set of performance metrics. And perhaps time for a broader perspective, a more holistic view of the customer journey.
It’s becoming a journey that no longer happens on one device and a single channel in a linear fashion, but on multiple platforms at user-directed intervals as a gradual progression. As a sequence of micro-moments stacked towards a higher goal, where conversion may happen at any point – but the user is 100% in control of when and where.
It’s a brand-new age of hyper-connectivity – also see Selligent’s video presentation "No Country for Old Mad Men" – and keeping your finger on the pulse of engagement is a full-time job. But it’s no Mission Impossible, either. Here are The 5 Engagement Metrics You Need to Watch across different channels:
1. Social Media: Active communities as buzz indicators. The interactive nature of social media shifts the focus from building armies of followers towards building armies of active followers. Social media reach – meaning the number of Facebook “Likers”, Twitter and LinkedIn followers – is still key, and 31.6% of respondents in Useful Social’s “State of Corporate Media 2014” survey track it diligently. But 27.1% also name “sharing” – the social amplification of branded content – as a priority, while closely keeping an eye on community health through increase in followers (47%). Plus, keeping an eye on Facebook’s “talking about this” and other “Buzz indicators” figured prominently for 48.7% respondents. By monitoring these KPIs, brands will notice when they are the talk of town, and respond accordingly.
2. E-commerce: Conversion and loyalty. Click-based models fall short of measuring e-commerce performance (a customer looking all across the site but failing to find the right information still generates high click counts, but leaves disgruntled). This shifts the focus towards conversion rates, which only 25.4% of marketers tracked in 2010, but 31.3% are following in 2014 (Duke University’s Fuqua School of Business). Another hot KPI: Which customers are new, which are returning? Repeat visits were tracked by 34.7% companies in 2010, while 38.7% kept tabs in 2014 which reflects a trend towards long-term relationships and loyalty.
3. Email: Open rates VS unsubscribes. Open rates – the number of times an email was opened divided by the number of emails sent – remain the KPI for emails. Why? Open rates directly affect Click-through rates (CTR), the number of clicks divided by emails sent. Think of open rates as the community reach (see 1.) in your email funnel. And just like community health and size need attention in social media, the same goes for email communities. If unsubscribe rates are climbing, maybe content is not relevant for customers, or it’s time to aim for the right marketing pressure and communications cadence. Whatever the reason – the combination of open rates VS. unsubscribes are your canary in the gold mine.
4. Content marketing: Quality over quantity. Clicks and shares may create the impression that your content marketing stories are generating mass attention – but whether anyone actually reads them is a different story entirely. That’s why content marketing is increasingly looking at metrics such as Yahoo’s “dwell time”: Yahoo’s scientists found that users spend more time reading stories on desktop devices than on mobile, and dwell more on longer articles at around 1,000 words. Extended dwell time correlates with people actually reading and absorbing content – which is exactly what content marketers want. Online storytelling platform Pixable tracks engagement with their own metric: read-through rate (RTR) measures the amount of people actually finishing a story. While RTR is depressingly low on the “common” Internet (15%), Pixable achieves a whooping 60–70% on hosted stories, making it their engagement KPI of choice.
5. Verified traffic: People that actually count. Turns out, news of the death of click-based models are somewhat exaggerated. Web traffic still remains the #1 metric and keeps gaining ground: In August 2010, 47.6% of respondents in the Duke University study primarily tracked hits and page views, while the number surged to 60.7% by August 2014. In Useful Social’s 2014 study, 47.3% of marketing execs also named “web traffic” as their preferred KPI. But in 2015, it’s all about verified users – what with all the robots out there. This calls for an omnichannel engagement platform that can build rich profiles of visitors – both known and unknown – like the Selligent platform.
As always, there is no single perfect KPI for tracking results in digital marketing. Also keep in mind that none of these five KPIs alone can paint a complete picture. For instance, a customer may engage with a piece of content for a very short dwell time (see 4.), but still convert into a purchase (see 2.) because the right information was right where it was needed.
These KPIs are part of a paradigm shift towards hyper-connected consumers in a fast-moving landscape with tons of data. Shifting your focus towards these KPIs will eliminate a lot of noise and clutter in this bright Big Data advertising age, and help justify those new data-driven marketing budgets for next year.