Performance-Based Marketing: A Winning Strategy for Agencies and Clients
by Moses Foster, West Cary Group President and CEO and Doug White, Chief Analytics Officer, West Cary Group
Part Two: Five Simple Ways to Measure Results
Last week, we explored Performance-Based Marketing (PBM) and defined it according to its three primary tenets. This week, we take a look at ways to measure the results of PBM. They include:
Using separate response channels to measure performance. When driving response via phone, use separate numbers to determine which approach drives better response (as Moses’ wife did with the rental property). When driving response via a website, determine the source of responses and measure the efficacy of different approaches.
Using dark markets to create a benchmark for measuring performance. When some markets aren’t exposed to advertising, the change in sales in those markets can provide a benchmark against which the ones that were exposed to the advertising can be measured.
Horse-racing alternative approaches targeted at market segments that have been crafted to be as similar as feasible. This provides an excellent environment for PBM.
Using history to gauge performance. If sales that had been flat surge by 12 percent after launching an advertising campaign, the gain could be attributed to the marketing. However, there will always be other variables at play over time (e.g., competitors change their prices, the economy improves or declines, etc.), so one can never know with absolute certainty. Still, if using more precise measures isn’t feasible, comparing historical results can be helpful.
Simply asking new customers how they heard about your business—or, better yet, giving them a reason to tell you (e.g., use a certain promo code and get 10 percent off) can be helpful in measuring the value of an advertising campaign.
Begin with the intent to measure results. Even results that are tough to measure can frequently be quantified with a bit of effort. Brand advertising is often thought to be “soft & squishy, touchy-feely” stuff—not the sort of thing that lends itself to quantification. But it’s a nut that can and should be cracked.
We launched an Internet-based brand campaign for one of our clients and presented a display ad to the target market segment we had identified. However, a portion of the targeted segment—the control group—wasn’t shown the display ad. We then surveyed the entire targeted segment, asking if they recognized our client as a player in its industry. Those who were presented with the display ad responded positively 80 percent more often than those in the control group. The lift was measurable and real.
PBM requires thinking creatively about ways the effectiveness of an advertising campaign can be demonstrated rather than applying that effort to coming up with reasons results can’t be measured and shouldn’t be assessed. If you focus on finding a way to make it work, it can most often be done. The old adage is true: “If you think you can, or if you think you can’t, you’re right.”
Next Week: Why PBM is Good for Agencies and Clients