In the recent congressional hearing on Facebook, the takeaway was this: Data is the world’s most valuable asset, and it is growing exponentially.
We may be collecting zettabytes of data, but are we also capitalizing on it? We use real-time data for almost all marketing efforts today, from building interactive content to placement of ads, but we may not have utilized it for marketing performance measurement and budget optimization.
The reality is, marketers have struggled for years to get a grip on marketing performance. Ultimately, we need to gauge what our marketing efforts are achieving and measure whether these results are meeting our goals.
“52% of the organizations say they cannot make a direct and obvious correlation between marketing efforts and company performance.” -Executive recruiting firm Korn Ferry
The journey to optimized marketing spend
Understanding the touchpoints that lead to customer spending across online and offline channels helps companies determine individual customer profitability and increase their average order value. The problem, however, is that brands use last and first clicks to decide the marketing attribution, which gives a broken picture of marketing performance. The path to purchase includes multiple touchpoints across a variety of channels. Each of these touchpoints plays a different role in the customer journey and are incremental to drive traffic to the next conversion. Marketers need to assess the value of these interactions to set up different cost-per-action (CPA) targets.
Today’s marketers are shifting their focus from simply increasing the marketing budget to adopting a more analytically advanced marketing function. The goal is to optimize marketing budget allocation among channels to acquire and retain the most valuable customers. To build a complete customer journey, marketers must consider all the interactions a customer has with your brand over a period, including how they interact and how often they interact. Measuring marketing performance at each interaction will help fill gaps to maximize customer experience. The most obvious solution here is the multi-touch attribution model, which is useful to organizations that focus on a personalized customer experience.
Marketers armed with AI
When you start a marketing attribution journey, pay attention to three elements: Identify, understand, and act. The journey evolves by applying principles of game theory to multi-touch attribution, coupled with AI to optimize marketing handoff. Game theory helps identify the value of each channel in a customer journey. Machine learning suggests investment options for different channels. AI enables repetition of similar scenarios to optimize marketing handoff, when the budget self-allocates on the fly based on the inference.
Individual channels can be used at certain times of the day to advertise more efficiently and gain a higher response rate for the same amount of money spend. Greater granularity in the results will help you understand where and how your brand resonates with users.
To help you understand and benchmark the maturity of your core marketing processes, including marketing strategy development, planning and budgeting, decision-making and campaign execution and collaboration, we have launched the Strategic Marketing Survey. Upon completion of the assessment, you will receive a personalized report.