As analysts, we talk a lot about “improving marketing effectiveness”. But at times the concept of “marketing effectiveness” can seem quite arbitrary and qualitative.
At its core, marketing effectiveness is about increasing revenue. Even if the goal of a marketing campaign is to influence brand perceptions, at the end of the day, it’s always about growing revenue. Metrics like conversion, click-throughs, and customer satisfaction are important, however, a marketer could substantially increase click-through or response by giving away an iPad, but if click-throughs don’t influence or drive sales, then the money for the campaign was ill spent.
Marketing effectiveness and return on marketing investment (ROMI) are interrelated. Higher returns on marketing investments are a byproduct of effective marketing. But, calculating a true return on marketing investment is no easy task. With today’s multi-channel marketing strategies, it’s difficult to accurately allocate measurable returns to marketing spend. Most marketers try to correlate marketing effectiveness and ROMI by measuring a few channels like email, the web, and direct mail. This is appropriate since these metrics should ultimately influence revenue. But, this approach also overlooks some powerful levers that can also improve marketing effectiveness.
You can influence marketing effectiveness by simultaneously removing inefficiency from three areas of marketing operations; campaign performance and revenue are byproducts of these elements:
- Marketing Strategy: What is your strategic approach to engaging customers, prospects, and competitors in the market? This includes the marketing mix, product development, positioning, and segmentation / targeting. Is your marketing strategy sound? Does it effectively target the right audiences with the right products and messages? Successful execution of a superior marketing strategy increases marketing effectiveness.
- Marketing Creative: The creative concepts that are used to execute the marketing strategy. Impactful creative can lead to increases in marketing effectiveness with little or no changes to marketing strategy. Are you conducting A/B Tests to optimize creative? Is the creative consistent across channels?
- Resources: The people, process, and technology that enable effective execution of marketing strategy and marketing creative. Organizations must empower capable resources with the tools they need to apply their skills and experience to marketing efforts; which leads to increases in marketing effectiveness. Marketing strategy and marketing creative can both suffer if an organization does not deploy resources with the right skills and capabilities; or the tools to do the job effectively.
