At first, this seems quite astounding given today’s data-driven digital environment. CMOs are bombarded with metrics from hundreds of tools that provide campaign-level marketing data collection and reporting. But once you dig in and look at the “metrics maze” of Likes, Followers, Posts, Tweets, Mentions, Impressions, Conversions … (the list goes on), it doesn’t take long to understand why CMOs are feeling a little uneasy. Though such metrics can have some value at the tactical execution level, they don’t provide a big-picture perspective and often raise eyebrows in the C-suite.
In fact, in a CMO Council study, “[M]arketers say their biggest problem is a lack of reliable metrics to define success and failure in a multichannel online environment.” And it doesn’t help that other C-level execs are pressuring CMOs to come up with ways to demonstrate business value — otherwise their budgets are candidates for the chopping block.
The underlying message here is: CMOs and their C-level counterparts aren’t confident that the right things are being measured. They sense, for the most part, that the metrics being used aren’t the business value factors that are leading indicators of a company’s possible future success (or failure).
Being able to demonstrate business value is critical. So much so, that some speculate that it’s the very ability to do this that separates CMOs from heads of marketing.
Given that brands spend billions on web marketing, the billion-dollar question is: How do you measure its business value?
That’s the same question many CMOs ask their marketing tools vendors, figuring that the tools must have the data needed to calculate more strategic measurements. In response, they hear “Tell us what you want and we’ll build it for you.” Unfortunately, the conversation usually ends there since few vendors understand measurement beyond campaigns, and many CMOs are unsure of what a more strategic measurement might be.
Before the question of how to measure business value from web marketing can be answered, it requires making a fundamental shift of how the Web is viewed:
The Web isn’t just a channel, the Web is a market.
What does this mean? It means the Web is more than just a “way” to generate leads. It’s actually a ubiquitous network of content used as the basis for an economic exchange. Whether or not you’re a web transaction-oriented business, the web acts a “place” where sellers and buyers come together to do business. As Michael Brenner recently noted “The web is most definitely a marketplace and customer attention is the currency.”
Elevating the Web from “marketing” to “a market” opens up new ways to measure and report strategic web marketing performance. Note that it’s important that web marketing is distinguished from online marketing, which includes email marketing.
Recognizing that the Web is a market means that certain web market trends are critical business success factors. These factors, then, can be measured using a set of market-level key performance indicators (KPIs).
Web Marketing KPIs
Performance metrics (which are what nearly all marketers use today to measure web marketing) measure a brand’s activities and performance. KPIs, on the other hand, are measures of the aspects of a brand’s organizational performance that are considered critical for its current and future success.
In other words, KPIs gauge important business-level trends to assist executives in making strategic decisions about whether they are (or are not) on a path for sustainable growth.
Unfortunately, web marketing measurement has been defined to take advantage of easily available data and to focus on campaign metrics and real-time or near-time metrics. Attributes like brand reach, brand mentions, and brand location or visitor “recency” are examples. While these have value as communications performance metrics, they’re far too simplistic and short-term to measure business value.
Metrics also don’t take into account a fundamental reality of markets, which have to contend with competitive forces.
What Makes a Credible Web Marketing KPI
There are four attributes that must be present in order for a KPI to be credible.
- It must account for the three dimensions of web content—paid, owned, and earned web presence.
- It must reflect the multichannel nature of the web marketing. It should include content from the five key web marketing channels—Press, Social, Advertising, Search and Industry/Communities.
- It incorporates dimensions of both quantity and quality when appropriate in order to refine the raw nature of the data. The simplistic approach of just counting brand mentions (e.g. share of voice or mind share) is misleading as a genuine gauge of web marketing performance.
- It must be a meaningful as a trend. A KPI is a leading indicator of whether conditions exist for future business success. This cannot be done with a real or near-time view. It must be valid as a trend that develops over time. It’s not about a roll-up of campaign results but rather about building market momentum. As such, a KPI needs to calculate some sort of score, rank or other measure that’s tracked over time to identify trends. In other words, it’s not a number itself that’s necessarily significant; it’s the trend that it indicates. So, for example, if your KPI score is 20 in January and is 22 by December, then you’ve increased by 10% whatever the KPI is measuring.
Currently, there are three categories of market-level web marketing KPIs:
- Brand Indicators
- Competitiveness Indicators
- Website Indicators
An example of a Brand Indicator is brand awareness, an example of a Competitiveness Indicator is webshare, and an example of a Website Indicator is visitor engagement. All provide companies with a gauge of sustainable business growth — if the trend of the KPI is positive, the business is more likely to have a bright future. If the trend is declining, strategic action must be taken to ensure the company’s ability to succeed and thrive.
As CMOs transition to understanding that the Web isn’t just a channel for generating leads, but rather it’s a market with market-level forces, they can quench their thirst for online performance measurement. KPIs are the lifeline for proving the business value of web marketing and for justifying budgets at a strategic rather than campaign level.