Marketers ‘preoccupied with wrong effectiveness metrics’, study finds
A new report from the DMA sheds light on how marketers are measuring marketing effectiveness, revealing a misplaced focus on campaign metrics but improvements elsewhere.
Marketers have been measuring the least helpful effectiveness metrics, according to a new report from the Direct Marketing Association (DMA). There has, however, been a slight improvement in the measurement of marketing’s impact on broader business metrics after two years of decline.
Based on a databank of more than 1,500 campaigns, the report identifies four categories of ‘meaningful KPIs’. These are response effects (short-term, performance marketing), brand effects (longer-term brand-building metrics), business effects (related to overall business performance) and campaign delivery effects (reach, frequency and impressions).
While 92% of marketers claim to be able to distinguish between these effects, the report argues they have been too focused on campaign metrics that “tell us little about overall marketing effectiveness”.
According to the DMA data, 39% of metrics used in the reporting of marketing effectiveness in 2023 were “less meaningful” campaign delivery and “digital vanity metrics”, while 61% relate to “meaningful” business, brand and response effects.
This breaks down to 39% of campaign metrics being used to measure success, followed by response (30%), brand (21%) and business (10%).
Likely a result of the growing scrutiny marketing budgets are under, the report charts a marginal increase in the measurement of business effects between 2020 (6%) and 2023 (10%). Brand effectiveness metrics have increased slightly too, up from 15% in 2020 to 21% in 2023.
The benefits of prioritising business effects are clear. The research finds a 67% uplift in the number of business effects for those campaigns that avoid using ‘campaign delivery effects’ in their reporting. Those marketers who steer away from delivery effects in reporting are found to have a culture of effectiveness measurement that results in stronger overall business performance, the DMA reports.
Best practice measurement methods and techniques
When it comes to marketers’ preferred measurement methods, attribution modelling/MTA comes out on top, used in 36% of campaigns. This is followed closely by brand tracking (35%), econometrics (26%) and brand uplift studies (12%), while geo-testing (3%) and pre-testing (2%) are the least popular.
A hypothetical scenario for investment in best practice measurement techniques charts how spend on each measure should result in improvement in effectiveness. It postulates that marketers who invest in multi-touch attribution record a 35% uplift in response effects in year one; those who invest in brand measurement record a 229% uplift in brand effects in year two; and those who invest in marketing mix modelling record a 150% uplift in business effects in year three.
The report warns that while taking budget from measurement to spend on media is a temptation when budgets are under pressure “it is a false economy”. Rather, it is beneficial to “sacrifice a bit of campaign reach for a lot of campaign certainty”.
Most effectively measured channels and sectors
When assessing which channels are being measured most effectively, ad mail comes out on top, scoring 163 in terms of the ‘likelihood of campaign to avoid using campaign delivery metrics’.
TV also over-indexed (108) on this metric, although both instances could be attributed to a lower temptation to resort to so-called vanity metrics available in the digital space. Indeed, social media (66), email (67) and digital (68) all scored lowest, according to the DMA figures.
When breaking it down by sector, the top scorers for best practice measurement were DIY/home/trade (184), health and wellbeing (138) and charity (127), while the lowest scores belong to hospitality (75), fashion and beauty (64) and entertainment (50).
With almost two-thirds of marketers believing a lack of consistent measurement frameworks is a key challenge for good effectiveness measurement, the report stresses the importance of establishing a unified marketing measurement framework.
According to the DMA, these should ultimately align KPIs with campaign objectives and document benchmarks, targets and performance, as well as key learnings for future testing. These frameworks are also increasingly important for bolstering marketers’ investment decisions and gaining the support of finance teams.
