3 First Steps to Data-Driven Marketing ROI
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” –John Wanamaker
There are few things marketers want more than to understand the impact of their content. That ad that we spent weeks perfecting, the whitepaper we chose to invest in over another marketing tactic—was it worth it? Did it influence a purchasing decision?
Even with more tools and analytics available to us than ever before, the simple truth remains: We’ll never know the exact impact of our content until we can read our customer’s minds. However, that doesn’t mean we can’t make progress towards showing data-driven marketing impact.
As a manager in the Marketing Operations and Analytics team at GE Digital, I lead strategic reporting and investment operations with a focus on measuring marketing ROI in ways that satisfy different audiences across our organization. As I’ve worked to build models that allow marketers to track towards and report on their success, I’ve come to see that before any of us can expect our metrics to be taken seriously, we’ll need to focus on using data in a way that tells a consistent and accurate story.
Doing so begins with considering the way we lay the data and operational groundwork. How we do this will impact our ability to facilitate a common mindset across the organization around marketing’s influence and return.
Here are three steps you can take to start reframing the mindsets of key stakeholders across your organization and lead them to see marketing as a revenue generator.
Step 1: Know Your Audience(s)
With immense amounts of data available to report on and endless KPIs, how can we create reports that will matter to internal stakeholders and be useful in making data-driven decisions?
I believe in approaching this problem the way you would any other campaign: Identify your audience personas, then develop the messaging and supporting data compelling to each group.
I’ll add a cautionary note here that it is important to consider your view into performance—you may use overlapping data to communicate with multiple audiences, so you’ll need to think through the way the complete data story fits together to ensure it doesn’t over calculate impact. To keep things clear, you should arrive at a single number for ROI and treat all other calculations as leading indicators.
Here are a few types of personas to whom you’ll need to speak:
Note: This data may be of interest to multiple audiences, but I’ve isolated the primary persona who typically find each level of data-driven insights most useful.
Audience Segment 1: Your Marketers
In this segment, our target persona is project leads—the marketers in the thick of campaign strategy and execution who are thinking about success in the most concentrated terms. They’re focused on critical measurements that most marketers are familiar with like cost per lead, MQLs, and influenced pipeline, but at the granular level of one or a few campaigns. Their goal is to assess where agile shifts can be made on a week-to-week or even day-to-day level to increase the time-to-value with a specific campaign tactic.
As I mentioned above, we won’t call the numbers delivered to the first two segments “ROI.” Instead, for segment one, we’ll speak to performance metrics that indicate whether marketing’s week-to-week work is hitting its targets. Calculating success at this level requires splitting the true cost of running the campaign across content inputs, tools, and channels that supported its creation and distribution. For example, each individual webinar would take on a fraction of the cost of a content asset or webinar streaming vendor, etc.
Audience Segment 2: Marketing Leaders
As we move up to audience segment two, our target personas are managers and executives who make investment decisions for their teams. To speak their language, we’ll shift the performance conversation from individual to aggregate data analysis. While often still interested in the same metrics as the segment one project leads, this audience’s insights allow stakeholders to look more holistically at performance by tactic against the targets and objectives set on a monthly and quarterly time frame.
This is the level at which the data starts to get interesting (at least for those who love data like me). In other words, it starts to get complicated. At this level, you should take into account the costs of multiple campaigns in service of larger strategic undertakings.
An ideal view into the data required for these KPIs allows you to slice and dice marketing activity or impact by tactic, product line, region, or any other way leaders need to see it. The goal here is to look at all the campaigns executed in service of a larger strategic goal or objective and start drawing larger conclusions about quality and quantity—what works, what doesn’t work, and where you’re seeing different types of returns. This data allows managers and leaders to back up strategic investment decisions with firm numbers.
Audience Segment 3: Business Leaders
This is the level at which we calculate a true ROI number and target our reporting to the executive and c-suite levels—those who own budgets across the company and are looking at spend to understand how it affects the bottom line.
Calculating ROI in a way that interests these personas requires examining metrics within the broadest scope. It takes into account larger organizational and operational base costs to assess and rationalize the total cost of running the marketing department against the value that the department brings back to the company.
Step 2: Standardize and Digitize
It’s been essential from an operational perspective to have an investment strategy centralized by the leaders, tracked against a standard metadata architecture, and backed by a streamlined investment operations process to create one source of investment truth.
One of the most important metrics to standardize is the calculation and view into ROI. Traditionally, ROI is seen as a static measurement that looks either to the future or the past to determine our success. I like to emphasize the importance of both Actual ROI, which considers closed-won opportunity amounts, and Projected ROI, which uses open opportunities (or pipeline) with a marketing win rate applied to estimate the potential return on campaigns.
Actual ROI derives its value from its hard, finalized numbers that the c-suite traditionally finds most valuable. But projected ROI is particularly valuable in B2B because you don’t need to wait for the conclusion of long deal cycles to make data-driven investment decisions to shift and optimize a marketing strategy. If a team wants to iterate rapidly, waiting for actual ROI can leave them playing perpetual catch-up.
Together, actual and projected ROI are greater than the sum of their parts and serve multiple audiences. Rather than looking at ROI as linear, we’re better served by picking a point on the ROI circle and simultaneously looking both ways.
But remember, to get there, you must establish a standard view into your investment data inputs and digitally manage the operations to maintain one single source of investment truth.
Step 3: Conquer Fear of Data Imperfection and Build the ROI Company Mindset
Essential in improving your ROI reporting is a culture in which people are comfortable with the caveats of data. In the ideal world, our models and numbers would be perfect, but being realistic requires teams to walk before they run.
Instead of waiting for data to be airtight, I’d encourage you to use what you have to start a discussion. Early numbers serve as a starting point for constructive conversations on how best to measure and drive marketing’s impact. I like to call these early reactions stepping stones to optimizing your performance and ROI reporting, because the most important thing our metrics can do at their outset is provide something to which leaders and peers can react so that we can improve.
Not to mention, aligning stakeholders around a standard set of metrics early in the process ultimately gives them much more weight—much more quickly—when they are ready to go live.
However good your data, operations, and metrics are, you’ll need leaders behind you to see the real results of all this hard work. That’s why it’s important to get people bought in on the rational before you start showing them numbers.
I’ve benefited immensely from having the support of my manager, Neenu Sharma, VP of Marketing Operations, who not only led me down this ROI path with a vision, but also understood the importance of what she calls marketing magic, or #tada (technology, analytics, data, and agile process), requirements as well as leadership support to align the teams around a new mindset.
“Marketing magic is aligning the critical components of technology, analytics, data and agile process–or #TADA–to centralize and optimize the way our teams work day-to-day.” Neenu Sharma, VP Marketing Operations & Analytics, GE Digital
With Neenu’s leadership, I’ve learned how important socialization and cross-organizational alignment is to get leaders’ buy-in. Only when leadership feels confident in the numbers will the metrics become part of the day-to-day conversation and work to facilitate an evolution in the way our companies think about—and act on—return and data-driven investment decisions in marketing.
My journey to empower data-driven marketing is far from over. Stay tuned!
Meanwhile, Kapost has published two tools to start assessing your content operation. Check them out and get started on your own road to calculating ROI of your content.