One of the most important roles of a marketer, just as important as strategy and creative execution, is marketing measurement. Without knowing how your ads are performing and whether they’re driving revenue, all the work put into your campaigns could go to waste. However, with a solid understanding of marketing performance, marketers are empowered to make better-performing ads and spend on the right channels.
At Rockerbox, we recommend a diversified approach to marketing measurement; instead of using one method, such as MTA, MMM, or experiments, combine multiple (as they were designed to be used) for the best results.
In this blog, we’ll talk about the benefits of a diversified measurement approach, plus several main methods for marketing measurement.
Table of Contents
- What is Diversified Marketing Measurement?
- Why Should I Use Multiple Marketing Measurement Methodologies?
- Diversified Measurement: Attribution
- Diversified Measurement: MMM
- Diversified Measurement: Experiments
- Diversified Measurement — The Right Tool for the Job
What is Diversified Marketing Measurement?
There are many different ways to measure various aspects of the effectiveness of your marketing, and when you use multiple methods to do what they’re designed to do, you’re leveraging diversified marketing measurement.
Diversified marketing measurement means using a variety of marketing measurement approaches—including attribution (MTA, first-touch, last-touch, etc.), MMM or marketing mix modeling, experiments (also known as geo testing, user holdouts, randomized control trials or incrementality testing) and other methods—to monitor your marketing performance and inform decisions about budget and creative.
Diversified marketing measurement is the alternative to using primarily one method of marketing analysis—incrementality testing for example—as the end-all-be-all solution for determining how to run your marketing strategy.
Why Should I Use Multiple Marketing Measurement Methodologies?
We’ll go into more detail about what the main different types of marketing measurement are below, but in short, each marketing measurement method has its strengths and weaknesses. Because of this, there’s not one type of measurement that’s suitable for answering all the questions you have about your marketing.
For example, MTA (Multi-Touch Attribution) is helpful when you have questions about the granular performance of your advertising and how it measures up to your goals for CPA (Cost Per Action) and ROAS (Return on Ad Spend). Conversely, it’s less helpful when answering questions about how much to spend on a channel as a whole. For those types of questions, the statistical analyses behind Marketing Mix Modeling (MMM) can help you uncover the smartest approach to structuring your budget on a high level based on past performance.
Beyond these two examples there are additional instances where geo holdout or incrementality testing can give you answers that MTA and MMM can’t. All in all, when you leverage multiple measurement methodologies the way that they were designed, you can get a clearer picture of your marketing effectiveness as a whole.
Below, we’ll cover some of the main types of marketing measurement, plus their strengths.
Diversified Measurement: Attribution
Marketing attribution, one of the most popular methods of determining marketing effectiveness, involves analyzing all the different touchpoints that contributed to a conversion, including the correct amount of impact each touchpoint had.
There are several attribution models that have different ways of assigning credit for a sale. The two top approaches to attribution are multi-touch attribution and single-touch attribution, and within each of these, there are additional sub categories:
- Multi-touch attribution
- Linear attribution
- Time decay attribution
- Position-based attribution
- Data-driven attribution
- Single-touch attribution
- First-touch attribution
- Last-touch attribution
The Attribution Report shows you not only high level stats about your marketing performance, but also granular, ad-level details on how each of your channels and placements are performing. Rockerbox customers use this report on a daily and weekly basis to make optimizations to their ads based on what’s performing/not performing.
Attribution’s (specifically multi-touch attribution’s) biggest strength is the ability to see the impact of all the different channels that make up your marketing strategy, even if those channels weren’t directly responsible for driving a sale. This means you get insight into the importance of both top of funnel and bottom of funnel channels, plus everywhere in between.
Diversified Measurement: MMM
Marketing Mix Modeling, or MMM, is a traditional marketing measurement tactic that’s seeing a resurgence in recent years. Traditionally used in the 50s and 60s to measure the lift seen from advertising when digital tracking wasn’t an option, marketers now use this statistical analysis technique to analyze the relationship between ad spend and revenue, in order to determine whether ad investments are paying off.
Traditionally, MMM was often carried out as a one-off analysis of spend/revenue for a set period of time, but modern technology is enabling software to deliver MMM insights on an ongoing basis with less lift and more visibility than traditional methods.
Rockerbox’s Forecast product offering is one such solution that gives marketers insight into the correlation between the money spent on various advertising and marketing channels and the payoff in terms of revenue.
Rockerbox Forecast answers questions like:
- What is the correlation between marketing spend and revenue?
- What should my ad spend be if I want to go after a specific ROAS target?
- What revenue and ROAS can I expect if I implement certain budget decisions?
Diversified Measurement: Experiments
Another way to gauge the effectiveness of marketing is to run experiments involving a control group and a test group and explore the effects of marketing on these groups in varying conditions. A simple example of this would be an A/B test—for example, a brand creating two versions of a landing page or an email subject, exposing those versions to different groups, then comparing the performance. We’ll go into two more common types of experiments below.
Experimental Tactics: Incrementality Testing
Incrementality testing lets marketers isolate the impact of individual marketing efforts on business outcomes, such as revenue or customer acquisition.
Rather than track every touchpoint like attribution, incrementality testing involves running experiments that compare the actions of consumers that were exposed to advertising vs. those not exposed to advertising to understand the impact advertising had and determine how many would have converted without advertising. All of this helps uncover the incremental impact of advertising on a specific channel and can help marketers invest in the right channels.
Experimental Tactics: Geo Holdout Testing
Geo holdout testing essentially compares two different geographies and their response to advertising tactics. One geographic area is exposed to the advertising being tested and the “holdout group” is not. The results of these tests essentially show whether the advertising campaign in question had any effect on the selected KPIs.
Geo holdout testing is a powerful tool for measuring the effectiveness of marketing campaigns, but like any experiment based approach it can take time to set up the experiment and get results.
Diversified Measurement — The Right Tool for the Job
At Rockerbox, we believe no one measurement method is the solution to all your marketing questions. Instead, we say you should leverage multiple approaches in the way that they were designed to get a more complete picture of what’s truly driving your success.
From MMM to MTA and beyond...
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