How To Choose The Right KPIs – SYNC3D
Introducing the SYNC3D roundtable series.
The SYNC3D events are designed for industry leaders to come together to discuss how digital channels can work in sync to continuously strive for best practice, whilst staying ahead of the ever changing landscape.
For the first instalment, we invited a number of leading brands to the iconic Gherkin last week to discuss how to choose the right KPIs to support smart marketing optimisation and planning choices. The round table was chaired by Jenny Thompson, our Head of Data Science and Advanced Analytics and Wajid Ali, our Head of PPC.
Selecting your KPIs may seem simple, but it can actually prove to be very complex depending on your business model, objectives, and advertising media mix.
The Right Data
It is important to keep in mind that revenue recorded on the confirmation page of your site may not reflect the actual revenue accrued by the business. This is especially true when you are primarily looking at a last click, or at an unattributed view of revenue. This is very important if your business model includes post-purchase corrections and/or your profit margins are subject to change.
The Right Focus
Common metrics such as increasing click-through rate are a great place to start, but it is also vital to consider how they feed into the overall campaign and ultimately your business objectives. If the goal was to increase revenue, CTR does not do a good job of indicating whether the traffic driven to site was the right type (e.g. converting traffic). Therefore focusing solely on this metric could obscure an optimisation opportunity.
The Right Strategy
Using a set cost-per-acquisition model across all marketing activity can lead you to cut marketing spend in the wrong places when you are pushing for incremental sales or new customers.
So, how do we ensure we are building the right strategy to accurately measure spend?
1. Go beyond the last click
Use attribution modelling to understand how all of your media channels are working together to drive conversion and ensure that all campaigns are optimized holistically rather than within their own silos. This means that we are not exclusively focusing on the last click, but encompassing cross device and cross channel attribution.
2. Tailor KPIs to your business model
Establishing a set of KPIs that fit within your business mode means including vital information within your metrics - such as cost elements that erode your profit margins. This could be media costs, shipping costs, returns, or changing profit margins. Using a profitability analysis system gives us a better way of understanding which products and campaigns are driving value for the business.
3. Use compass and radar method
The compass and radar method means not only worrying about where you are going, but also how you are getting there. By linking KPIs to both long and short term goals we are ensuring that strategies are not myopic.
Data science has given us the clarity to make informed decisions when planning marketing spend due to the multi-channel and multi-device nature of the profitability model. This work is continually updated across many channels to ensure actionable results are being created.
If you are interested in learning more about data science, or would like to hear more about future round tables hosted by Forward3D, please fill in the form below and we will be in touch.