In the realm of marketing metrics, the tug-of-war between vanity and tangible outcomes persists. Billy Loizou, area vice president at Amperity, details the conflict.
While the current trend leans toward prioritising measurable, concrete results, the argument for vanity metrics such as reach, impressions and likes remains.
However, as marketing budgets tighten and efficiency becomes paramount, there’s a growing need to integrate or replace vanity metrics with more meaningful, data-driven insights. And Chief Marketing Officers (CMOs) find themselves at the forefront, shouldering the responsibility of spearheading this strategic shift by implementing strategies that move their team’s focus from superficial metrics to those reflecting real business value.
This is crucial in demonstrating marketing as a strategic investment rather than a mere expense, especially vital during economic downturns. Below, I share why it’s time to say goodbye to vanity metrics in 2024.
Vanity metrics versus tangible outcomes: An ongoing debate
The debate over the significance of vanity metrics versus tangible outcomes in marketing is ongoing. While there is a growing emphasis on measurable, tangible results, there are still arguments for the continued reliance on vanity metrics like reach, impressions and likes.
Here are some justifications:
- Brand visibility and awareness: Vanity metrics, such as reach and impressions, provide insights into the visibility of a brand or campaign. High reach indicates that the content is being seen by a large audience, contributing to brand awareness.
- Early stage of the customer journey: In the early stages of the customer journey, metrics such as likes and social media engagement can serve as indicators of interest. While not direct conversions, they show that the audience is engaging with the content. This can be a precursor to more meaningful interactions.
- Social proof: Likes, shares and comments serve as social proof, indicating to others that the content is popular or valuable. This can influence perception and, potentially, attract more attention.
- Content performance optimisation: Vanity metrics can be used to optimise content strategy. By analysing what types of content receive higher engagement, marketers can adjust their approach to create more appealing and shareable content.
- Experimentation and learning: Vanity metrics provide quick feedback on the performance of a campaign or content. Marketers can use this data to adapt strategies in real-time, making timely adjustments to improve overall outcomes.
- Benchmarking and competitive analysis: Vanity metrics can be valuable for benchmarking against competitors and industry standards. Understanding how your metrics compare to others in the industry can provide context for performance.
- Visual appeal and creativity: Likes and shares often reflect the visual appeal and creativity of content. For certain industries or products, this aspect can be crucial in capturing audience attention and conveying brand personality.
- Long-term impact on conversions: While likes and impressions might not directly translate to conversions, they can contribute to building a positive brand image and trust over time. This can influence purchasing decisions in the long run.
While these justifications exist, it’s important for marketers to strike a balance and not solely rely on vanity metrics. Combining these metrics with more concrete, bottom-line measurements (such as first-touch attribution, conversions, pipeline generation, sales and customer lifetime value) offers a more comprehensive view of marketing success. The key is to use a mix of both types of metrics to inform and optimise marketing strategies.
Approaching attribution: A how-to for marketers
Effective attribution modelling in marketing involves recognising and assigning value to each touchpoint in the customer journey. Acknowledging the unique role of each channel is crucial for a comprehensive understanding of how different channels contribute to conversions.
Below are some strategies marketers can use to approach attribution in a way that respects the unique role of each channel:
- Consider online and offline touchpoints: Recognise that offline channels, such as in-store interactions, events or phone calls, also contribute to the customer journey. Incorporate these touchpoints into your attribution models to ensure a holistic view.
- Utilise multi-touch attribution models: Adopt multi-touch attribution models that assign value to multiple touchpoints throughout the customer journey. Models like linear attribution, time decay attribution and algorithmic attribution can help distribute credit across various channels.
- Understand all customer touchpoints: Map out the customer journey to understand the various touchpoints across different channels. Recognise that different channels may serve different purposes at different stages of the journey, from awareness to consideration and conversion.
- Customise attribution models: Tailor attribution models to fit the specific characteristics of your industry, business model and customer behaviour. A one-size-fits-all approach may not capture the nuances of how different channels contribute to conversions.
- Use Machine Learning (ML) and AI: Analyse vast datasets at scale to identify patterns in customer behaviour and preferences with AI/ML. These technologies will provide more sophisticated attribution insights based on complex interactions.
By taking these approaches, marketers can develop attribution models that recognise the unique contributions of each channel in the customer journey. This nuanced understanding allows for more informed decision-making and resource allocation, leading to a more effective and strategic marketing strategy.
Turning challenge into opportunity with a clean data foundation
In the face of growing challenges posed by data fragmentation and privacy constraints, marketers can navigate these hurdles by prioritising the establishment of a clean data foundation. Starting with a robust and reliable dataset is crucial for refining media mix models and making informed decisions throughout the customer journey.
Vanity metrics, often superficial in nature, may not provide the depth of understanding needed for effective decision-making. Instead, first-party data, which is directly collected from customers, offers a more granular and authentic perspective. This data can encompass customer preferences, behaviours and interactions, providing valuable insights into what truly resonates with the audience.
To refine media mix models effectively, marketers must invest in technologies like a customer data platform (CDP) and strategies that consolidate and organise disparate data sources. This involves integrating data from various touchpoints to create a unified and comprehensive view of the customer journey. By doing so, they can better identify high-performing channels, optimise their media mix and allocate resources where they are most impactful – all while mitigating privacy concerns.
Getting to the metrics that matter with data-driven solutions
Every marketing dollar is under scrutiny in today’s challenging business landscape. And the imperative to ‘do more with less’ has never been more pronounced. For marketers to keep up, they must shift their focus from vanity metrics to exploring data-driven solutions.
Net profit, customer acquisition and net revenue retention are arguably the three most important metrics of any business. They define the health of an organisation. And they all have one data point in common – the customer. This data is valuable. It helps organisations know the best next step to take for every customer, the right customers to acquire and which customer relationships to maximise.
Yet most companies are overwhelmed by the data they have. And it’s leading them to question whether the data they have can even be trusted. Even more, this messy, fragmented data is holding them back from becoming customer-centric and knowing where to focus their time, resources and marketing dollars – challenges that are directly impacting the metrics that propel a business forward.
At a foundational level, strategy and direction come from having an accurate and accessible single-customer view database. With that single source of truth, campaigns will be more effective, teams will be more efficient and employees will know exactly what levers to pull to move the business forward.
According to the 2023 Arktic Fox Digital and Marketing in Focus study, the demand for CDPs in Australia almost doubled from last year (21 percent to 40 percent), with more respondents prioritising investment in this part of their martech stack in the next 12–18 months, even as overall martech spend is softening.
CDPs are now being recognised as a business-wide tool to bring data quality (61 percent say they need to improve this) and drive personalised experiences (64 percent say this is a key priority). And they play a critical role in fostering a data-first culture by serving as a trusted, agnostic source for both IT and marketing teams.
Brands adopting a first-party data strategy have seen great results, including match rates as high as 85 percent on key channels, improved return on ad spend (ROAS) by up to five-times, and up to 90 percent faster activation time for new campaigns. In sum, better data equals better results.
Five ways CMOs can cultivate a metrics-driven culture
Transitioning a marketing team from focusing on vanity metrics to metrics that reflect actual business value requires a strategic and cultural shift. Here are some strategies that CMOs can implement to facilitate this transition:
- Align metrics with business goals: Clearly define and communicate the organisation’s overall business goals. Then, align marketing metrics with these goals to ensure that the team is focused on activities that contribute directly to business success.
- Implement attribution models: Implement advanced attribution models to track and measure the impact of various marketing channels on conversions and revenue. This helps in understanding the true value of different touchpoints in the customer journey.
- Focus on customer-centric metrics: Shift the focus towards customer-centric metrics, such as customer satisfaction, customer lifetime value, and customer retention and churn rates. These metrics provide insights into the overall health of customer relationships and loyalty.
- Implement a modern martech stack: Utilise an AI-driven customer data platform, like Amperity, to track customer behaviour and engagement throughout the entire customer journey. This data can provide more accurate insights into how marketing efforts contribute to conversions.
- Encourage data-driven decision-making: Foster a culture of data-driven decision-making within the marketing team. Encourage team members to rely on data and analytics when evaluating the success of campaigns and initiatives.
By implementing these strategies, CMOs can help their teams shift their focus from vanity metrics to metrics that directly contribute to the organisation’s bottom line and overall success. This transition may take time, but with consistent efforts and a commitment to measuring real business value, marketing teams can become more strategic and impactful.
Billy Loizou has 15-plus years’ experience in design, technology and marketing. He has worked with some of the world’s most renowned and respected brands, helping them improve their customer experience and drive profitability.