The Press, July 2011

Television advertising spots during Saturday night’s Super Rugby final would have commanded huge sums. While the Red’s win was unfortunately confirmed at the final whistle, judging whether the adverts were effective is much harder.

Buying ad space during the Super Rugby final’s half-time break may not be as expensive as NFL’s Super Bowl in the USA, where 30 seconds of TV advertising during the 2011 Super Bowl reportedly cost $US3 million, but the investment required is still significant. It requires all those marketing managers behind the brands to do some serious assessment before opening the chequebook.

It is the same challenge every business has, trying to work out how to measure the effectiveness of promotional activity like advertising, whether it’s a spot in the local giveaway rag, or headlining the Super Bowl.

How do you judge whether all those marketing dollars are going somewhere useful? For any tactical promotional activity there is typically some sort of measure.

With the growth of online marketing tools like Google Adwords, Facebook, LinkedIn or Twitter, marketers are actually awash with numbers. All kinds of ‘analytics’ are available for these communication channels, with marketers able to tell to a high level of detail who is clicking, where and for how long.

For a website you can measure the number of visitors, how often and how long they visit, and whether they download anything (e.g. an ebook or video) while they are there. For an email newsletter you can easily track who opened it and what they read.

With the more traditional tools like print advertising or direct mail, it is still possible to track effectiveness in terms of leads generated through phone or email, or perhaps even shifts in brand awareness if you are measuring that on a regular basis.

Events like trade shows also yield numbers, in terms of people attending and the number of leads generated. Similarly statistics can be gathered for online events such as webinars.

All of this data can be used to calculate a return on your marketing investment, for example a ‘cost per click’ calculation for an online advertisement or a ‘cost per lead’ from a trade show.

The challenge you’re left with however is that you can measure all of these activities and still be no closer to understanding how much it is really contributing to your business. It is easy to become obsessed with the numbers and miss the point of it all.

“Measurement has gone too far, expectations of measurement are too great, and measurement has clouded our judgement instead of informing it,” lamented blogger Eric Wittlake recently in response to a growing obsession with tracking numbers, especially around social media. “As marketers, we have allowed strategy to become second to data.”

The ease of tracking how many people have clicked your Google ad, or ‘liked’ your Facebook page, have for some obscured the real purpose of measuring.

Promotion is only valuable in terms of how it influences whether someone chooses to buy your product or service, i.e. does it sell? The real strategic measure of whether your marketing activity works is evaluating how it pushes people through a sales cycle to become a customer.

How do you build this ‘real’ gauge of marketing effectiveness?

The first step is documenting a typical sales cycle for your product. There are various models you can use, but it can be as simple as identifying the major stages one of your customers goes through, from the point they first learn of your product, right through to the time they become a satisfied customer.

For example, you might have a ‘suspects’ stage, a ‘prospects’ stage, a ‘proposal’ stage and finally the ‘sale’ stage.

Next is establishing some sort of system (anything from a spread sheet to specific customer database product) that tracks the numbers of potential customers at each stage. From here you can track the movements of prospects through the sales cycle on a regular basis, assessing how many shift from stage to stage and at what sort of pace.

Now comes the powerful bit, aligning ‘solutions’ like advertising or trade shows with ‘problems’ such as gaining suspects or converting a prospect into a proposal. For example, you could prove that investing in Google Adwords might help generate suspects, or that an online white paper helps prospects move through to the proposal stage.

By applying your promotional tracking numbers to how people move through your sales cycle, you have a truly strategic picture of your marketing activity. You know the levers that really fill up your sales funnel, and what helps guide people along that process towards handing over the cheque.

Of course it is not an exact science, but some structure is better than none. Instead of endless numbers that mean little, you will have a few key measures that really mean something.

You might even have enough confidence to buy one of those expensive Super Rugby advertisements on TV.

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