This post is by Ilona Evans, a Senior Consultant at TrinityP3. Ilona is passionate about ensuring digital drives business outcomes and simplifying the process to achieve this.
Setting the correct digital KPIs is key whether you are working on an overall marketing brief or a digital specific brief. Digital by its nature is the most accountable and trackable channel. As a result a lot of marketing KPIs are digital specific.
The right digital KPIs are key to ensure you are planning and producing the correct creative, digital assets and media and measuring, reporting and optimising on the right data.
The accountability combined with the jargon of digital often means digital KPIs are not given the scrutiny and focus they require during planning phases.
The result is often digital KPIs come under question once the campaign has started or even once it has finished.
Seeing the first dashboard of results might make you re-think/question the KPIs based on how they have been measured. Or you might have additional stakeholders or senior management in the meeting who jump in and question the very brief and KPIs you set.
The impact of setting the wrong digital KPIs is significant. At best your campaign has not reached its full potential. At worst you have briefed and paid for creative, media and digital assets that have been planned, produced and optimised to the wrong KPIs.
Below are 5 questions to explore to stress test whether you have set the correct digital KPIs:
Do your digital KPIs correspond to business objectives?
It is key to ensure your primary digital KPIs correspond to overall business objectives. This is certainly a challenge marketers continue to face.
Digital has at times been given a relatively free reign. It is key to always stop and question – How will digital help us to achieve our business objective? How do these existing/legacy KPIs link back to and measure our business objectives? From this we can then set appropriate and measurable KPIs.
If your business objective is to increase sales, your marketing objective may be then focussed on acquiring new customers. In this case, your corresponding digital KPIs could be set around CPA (cost per acquisition).
This straight forward example could be applied at a campaign level or in more detail to a pure play ecommerce retailer. For other marketers with a sales objective based on offline sales you may also need to look at setting KPIs around the path to purchase e.g. Cost per Test Drive request or Cost per Lead. Some of the reasons why are explored below.
Can your Digital KPIs be accurately measured?
This may seem an odd question given digital is usually perceived and sold in as the 100% accountable medium. Certainly there is a wealth of data available. However, it isn’t always an exact science particularly when you need to measure the relationship between online and offline data. The impact of this is that you need to understand upfront if your KPIs can be accurately measured and if not work out the appropriate alternative measures.
If your business objective is to drive offline sales digital in its entirety isn’t as measurable as it is often understood to be. For example, if you are in the FMCG space and your business objective is to drive increased offline sales, how will you measure the impact of digital? You can get valuable overall insights on the relationship between digital and sales through reporting such as:
- Analysing the relationship between sales and digital exposure or interaction.
- Bespoke econometric modelling.
- Online brand studies (exposed vs unexposed methodology)
These reporting measures may allow you to report at a campaign level based on a number of assumptions. However, they are limited in their ability to report on the success by channel (e.g. SEM vs programmatic vs SEO). Furthermore, they don’t allow digital media to be planned, bought and optimised to its full extent.
Further insights are available through publishers, payment providers and 3rd party data providers. Google and Facebook have introduced offline conversion measurement and given their size this provides key insights. The recent focus on Google’s partnership with Mastercard shows the steps forward but also highlights the consumer privacy concerns. Data companies such as Quantium have been able to tie together publisher and retailer data via Woolworths Rewards which provides key insights for industries such as FMCG. However, privacy concerns have had an impact on part of this offering.
Given the evolving measurement options for offline sales it is important to drill down and understand the positives of these new tracking options but also the limitations. Some of the questions to ask include:
- What offline sales data is required and does this match what you have? E.g. if Email address is needed do you have this data point?
- Is this measurement available in your market and industry? Google for example is ‘testing the data service with a “small group” of advertisers in the U.S., according to a spokeman’.
- What proportion of my total campaign can I track through to offline sales?
- Does this provide the full picture of the performance of my digital campaign? Does it capture all offline transactions?
Questioning the limitations of this measurement will help establish whether you need to look at additional proxy KPIs that are measurable across the whole campaign while still impacting on sales. To do this it is key to understand the consumer path to purchase and how the digital ecosystem sits within this.
For example, for a low involvement FMCG purchase brand studies may show that someone who interacts with a piece of creative are more likely to make a spontaneous purchase. You may then set engagement rate as your KPI and optimise media based on this.
What data sources will be used to measure your Digital KPIs?
Digital measurement data comes from a myriad of different platforms. A typical marketing campaign may incorporate data from:
- Web based analytic platform e.g. Google Analytics or Adobe. This covers your digital platforms and sources of traffic
- Social media platforms e.g. Facebook, LinkedIn
- Social listening tools
- Search platforms e.g. Google
- Programmatic platforms
- Media partners
- EDM platform
- Dashboard products
Some of these provide a consolidated view (e.g. Dashboard, Analytics platform, Adserver) while others provide more in-depth data or may be a prerequisite to buy and optimise media.
Digital data sources are not infallible. Historically there has been up to a 10% accepted discrepancy in data between different measurement platforms. Even within the one platform different views of data can create discrepancies.
It is key to work out upfront what platform/s you will use to measure and report on your KPIs. You then need to ensure that your agencies are briefed and aligned on this.
By deciding on which reporting platform and data sets you are using upfront this will stress test your KPIs by ensuring:
- The required tracking can be and is set prior to the campaign starting
- Relevant benchmark KPIs can be and are set
- Agencies are aligned in their use of data and attribution models
Can your media be optimised to your KPIs?
It is key to understand whether your digital media buy will be able to be optimised to the digital KPIs you have set, and within this, whether it can be optimised in real time, manually or not at all.
The simplest comparison is looking at online vs offline objectives and their corresponding digital KPIs.
If your business objectives and corresponding digital KPIs are related to a specific online action e.g. sales, this allows you to optimise your media to your actual business objective in real time (if the volume of data is large enough). This allows for optimisation across targeting variables (audience, context, day part etc) as well as across creative variants.
However, if your business objectives and corresponding KPIs are offline e.g. cost per offline sale this doesn’t often allow for real time media optimisation. In this case you need to agree on which media metrics contribute to offline sales and therefore should be used as a proxy to optimise to. For example, for a high involvement high cost purchase, the cost per online signup might be a key metric. For a low involvement impulse purchase, cost per engagement or a cost per view might be the best proxy. These can be supported via brand studies to show the relationship between these actions and actual purchase.
Are your digital KPIs signed off by internal management and key stakeholders?
It is too late for internal management and key stakeholders to question digital KPIs when they see the first performance dashboard. It is essential that you present and get your KPIs signed off prior to a campaign starting. Often the easiest way to do this is present the actual campaign dashboard that will show how the campaign will be reported on once it starts and includes the KPI benchmarks. This will help bring to light some of the questions that may otherwise arise when the first dashboard is presented.
How are you currently setting your marketing objectives and corresponding KPIs? Find out how TrinityP3 can help here.
Are you concerned about the value you are obtaining from your media investment? Find out about our comprehensive media assessment service here