With Campaign Metrics, You Need to Go Beyond the Basics
Marketing executives are familiar with the fundamental metrics that are typically used in campaign analysis—measurements like click-to-open rates (CTOR), which record visitor behavior after viewing an ad; cost per impression (CPI), which indicates how consumers viewed ads across campaigns and channels; and cost per click (CPC), which measures how much companies pay to get a response (within one campaign or across multiple campaigns and channels). These metrics are the building blocks that, when factored in with other metrics, give marketers insight into campaign efficiency.
The use of these basic metrics help marketers make decisions based on ROI rather than subjective assessments of campaign success. But to truly transform campaign analysis from art to science, marketers must go beyond the basics and integrate the following metrics into their campaign analytics:
Lifetime customer value. This metric is the holy grail—the measurement that enables marketers to identify their ideal customer and appropriately target, service, and customize outreach for current and future campaigns. To accurately determine lifetime customer value, marketers must go beyond the first touch point, analyzing customer behavior across the sales and marketing continuum to understand where the value truly lies—and gain critical insights that enable the marketing team to craft up-front strategies. Through lifetime-customer-value analysis, marketers can understand critical success factors, learning, for example, that the media strategy that quickly pulls customers in doesn't necessarily result in brand loyalty. To determine lifetime customer value, marketers must factor in sales at every point in the relationship and determine how often ads re-engage the customer base.
Online and offline bounce rates. While it's important to understand how many people engage with the brand and respond to campaigns, knowing how many didn't convert to customers is crucial, too. Online and offline bounce rates tell how many visitors left the site or turned off the ad before moving toward a purchase or seeking additional information on a product or service. For example, a prospect who views a direct-response TV commercial and visits a URL for more information and then leaves the site before clicking on specific pages counts as a "bounce." By tracking visitors and identifying bounce trigger points, marketers can improve ROI. The objective is to reduce the bounce rate as much as possible to maximize return on the marketing costs already absorbed and convert more lookers into buyers.
Web site dwell time. Consumers these days are bombarded with messages across multiple platforms, and gaining and holding their attention is an objective that often eludes even the best marketers. Measuring Web site dwell time—how much time customers spend on a site and which pages customers visit—yields important clues toward helping marketers make sites more engaging. With Web site dwell time metrics, marketers can optimize individual pages and improve the effectiveness of the entire site, developing customer relationship management and engagement strategies that maximize the time spent on the site—and increase the chances of converting a visitor into a customer.
Estimated campaign ROI. When budget dollars are scarce, marketing executives come under a lot of pressure to justify their spending amounts. The ability to determine estimated campaign ROI is a critical success factor since it helps marketing executives project profitability and justify investments. Applying campaign ROI allows organizations to continuously improve marketing strategies by measuring performance against projections and making adjustments as necessary. Calculating campaign ROI is relatively simple: Marketers compare the cost per lead with the lead-to-close ratio and then compare the result with average customer value. If, for example, a marketer pays $100 per lead and closes half of the leads, that's a $200 cost for every new customer. Comparing that number to average customer value allows marketers to determine if they're generating a profit—or need to adjust their campaign strategy for better results.
Basic campaign metrics like CTOR, CPI, and CPC are essential to campaign management, but marketers who want to step up their game need to think beyond the basics. The first step is to prioritize the objectives of the campaign: sales, engagement, or some other goal. By integrating these four metrics into campaign analysis, marketers can improve performance across the board, generating additional dollar value, improving campaign awareness, and meeting additional marketing objectives. With metrics that provide additional insights, marketers can move campaign analysis from an art to a science.
Jessica Hawthorne-Castro is the CEO of Hawthorne Direct, an analytic- and technology-based agency that specializes in Accountable Brand Advertising. Hawthorne Direct has been a leader in the direct-response industry that was pioneered by Chairman Tim Hawthorne nearly 30 years ago. She can be reached at firstname.lastname@example.org.