Welcome to the April edition of Transparently Speaking, our opportunity to openly share some thoughts on the topics most impacting our clients and the industry at large. This month we are talking a lot about marketing measurement. I suppose looking backwards measurement has been at the heart of my career. In fact, I still get professionally intrigued when new concepts and approaches begin to take shape. I’ve felt that way recently as I have sensed an emerging idea around marketing measurement, let’s call it full-funnel omnichannel marketing measurement.
It All Matters – Thinking Full Funnel
Let’s unpack this a bit as neither full-funnel nor omnichannel are new concepts within marketing. With that said, I do believe marketers are finally being pushed to think bigger and broader when asked the question “what works”? By full-funnel I am specifically referring to an ability to measure marketing’s impact from brand awareness through choice and retention. Metrics associated with awareness, consideration, and others are considered upper funnel, brand building based. While metrics for choice and retention are often labeled as performance marketing measurement. Big brand marketers tend to be very good at measuring the impact of brand building while DTC and SaaS marketers have perfected the art of performance measurement. These worlds are colliding and today’s marketers need both.
I see two major drivers raising the need for full-funnel measurement. For legacy big brands, they are seeking to better understand lower-funnel performance marketing. This is partly due to their marketing investments shifting towards Retail Media Networks (RMN) and other forms of Shopper Marketing. Some brands now spend 40%+ of their media dollars in RMNs. This means they need to quickly understand what works from a creative, tactic and placement standpoint within these environments. Conversely, many DTC, software and app based brands have seen periods of rapid growth beginning to slow down. They’re realizing it’s now time to invest in upper funnel brand building activity to ensure they maintain a prized position in consumers’ consideration sets. Again, they seek metrics that inform them as to what works for driving awareness and consideration, not just CAC (cost of acquisition).
Measure As You Market – Omnichannel
But wait there’s more. Measuring full-funnel is not enough. Most marketers are now seeking to understand marketing performance within an omnichannel sales environment. I heard this need repeatedly while speaking with brands at Shoptalk 2023, as well as our own clients. In fact, we work with one brand whose sales are roughly 30% online, 70% offline. Of online sales maybe half are DTC and half come via retailer eCommerce. Offline sales are also a split of DTC and retailer driven. When evaluating marketing performance in this scenario brands historically over emphasize whatever is easiest to measure, in this case probably DTC eCommerce. However, doing so would ignore any impact marketing was having on roughly 85% of sales. These brands would benefit from a measurement platform that combines insights into marketing performance across all channels, and ideally from upper to lower funnel.
Taking a full-funnel omnichannel approach to marketing measurement can be challenging. This is especially true when so many legacy tools and methods are already in place. But it doesn’t have to be. Capabilities like Market Mix Modeling (MMM) have been around for years and still provide a solid foundation for understanding how well various investments perform. Often a more granular approach for understanding “why” or “why not” in relation to the outcomes from MMM is needed. In this case it’s not necessary to rip out existing measurement but rather add complementary methods that fill in gaps. This includes capabilities such as incrementality measurement or multi-touch attribution where possible. You’ll notice several pieces from us this month expanding on these ideas.
Making it Happen
Finally, when is the right time to consider moving towards full-funnel omnichannel measurement? Obviously we would recommend the sooner the better, but more discreetly I would say look for periods of change. Major shifts in marketing investments, changes in business unit structure or leadership positions all offer great opportunities to explore adding depth and breadth to how you measure marketing effectiveness. We are speaking with one brand currently going through massive organizational change, and I am impressed with their commitment to completely reexamine, and if necessary redesign, their entire approach to measurement. They are taking advantage of the change and setting themselves up for continued success into the future. Transparent Partners would love to help you do the same.