In the world of marketing, analytics and metrics are essential to measure the success or failure of a campaign. But for each form of media, what are the metrics that determine success? Consumer behavior specialists like The Nielsen Company have been measuring audience response for years to gain insight into what makes some campaigns work and others fizzle. While ultimately what matters most to product marketers is driving sales, the route that leads there and the time it takes to reach that destination depends on the goal of the campaign, i.e., whether it’s building brand awareness or encouraging a specific call to action. Each type of media, from broadcast TV and radio to the more narrowcast and interactive forms of digital media including online and mobile, for example, has its own metrics for measuring success. No matter what the goal or the channel used for delivering the marketing message, the metrics need to correlate purchases with the media source and quantify their effectiveness.
The Broadcast Bubble
To keep things simple, let’s say the goal is to drive short-term sales, taking a standard page out of the marketing playbook for established consumer brands. In this instance, awareness of the brand is less of a factor. Creating a sense of urgency for consumers to make a purchase is the goal. For broadcast media, a comparatively larger spend may be involved to reach a substantial potential audience and it may include multiple concurrent media channels, e.g., TV, newspaper or radio. Measuring the result relies on basic arithmetic: calculate the Return on Ad Spend (ROAS) based on the total revenue generated divided by the total dollars spent on the ad campaign. The value from this formula reveals the amount returned on every dollar invested. The challenge in this case is how to correlate the volume of purchases with each media channel. Which channel produced the greatest contribution? Which should be increased or decreased in future campaigns? It may not be possible when mixed media is involved.
The Narrowcast Funnel
Now let’s execute the same marketing play on the Internet. Unlike broadcast media, narrowcast electronic media makes possible one-to-one message delivery with more potential ways to measure consumer interaction. This enables tracking activity in a funnel-like fashion, from the “top” of the funnel where consumer interest is first identified, to the “bottom” of the funnel where purchases occur. Consumer interest can be measured by quantifying keyword search on explicit search terms. Consumer intent, revealed in the middle of the funnel, can be quantified based on measuring Click-through rates (CTRs) on various ad units displayed along with search results. These are strong indicators of a potential conversion (purchase). The proof in the pudding comes when intent converts to a call to action, which could be completing a survey, registration or in this context, a purchase. Purchase transactions associate a marketing message with a specific product, dollar value and individual, thus closing the loop on the marketing campaign. This represents a clear advantage over broadcast marketing.
Mobile Metrics Emphasize Behavior
Finally, let’s replay this same campaign in the mobile world. Although it too, belongs to the narrowcast media genre, unlike its computer-based Internet cousin, additional metrics apply. To understand why, it’s important to have a clear understanding of how consumers use their mobile devices. A recent Forrester Research study placed the most frequent use of mobile devices in the following rank order: at home, in the office and in the car, and in all venues, consumers “snacked” on information, consuming it in small bites on-demand. It’s this on-demand behavior, particularly at the office and in the car, that reveals an interesting factor—a sense of urgency. A Google study confirms this, indicating that 88 percent of mobile consumers take action the same day.
Mobile consumers are engaged and actively seeking answers to determine their course of action. If they express interest in a product and are contemplating a purchase, they likely want to know what nearby stores or e-commerce sites carry it and how much they sell it for. All things being equal, they will weigh the value of the timeliness of having the product in hand vs. its total cost to determine whether they make an online or in-store purchase.
Given that people who use mobile devices are more motivated by sense of urgency, it’s fair to assume that there’s a bias toward getting the goods they seek sooner rather than later, which favors an in-store purchase. The fact that 95 percent of sales continue to occur in stores supports this belief.
There is an undeniable correlation between mobile users, a sense of urgency that generates action the same day and in-store sales, but consumers could also decide to purchase on their mobile phones or later switch on a tablet or computer to buy online, inspired by their initial exposure to a mobile marketing campaign. In this case, how can you prove that a mobile consumer made the purchase in-store or online?
The answer is that it is not necessary to provide a direct verification of closing the loop when there are other supporting metrics that flow through the sales funnel and substantiate mobile’s effectiveness. These include:
- Scope of search (retailers, brands, products and price points); multiple searches on the same product across multiple retailers indicates strong intent.
- Total time of engagement, especially when concentrated on a product category, brand or retailer.
Intent metrics (can identify leads to stores and e-commerce sites)
- Location of the search in proximity to retailers, including searches conducted among competitors’ stores.
- Clicks on products that link to e-commerce sites.
- Clicks on nearby store buttons to reveal maps and driving directions.
- Clicks on Click-to-call buttons to contact retailers.
- Purchase via mobile.
- Purchase via tablet or computers (from forwarded link originated on mobile).
- In-store coupon redemption tracked by entering coupon code at the point-of-sale.
- In-store coupon redemption tracked by viewing code in proximity to stores (in the case that codes are not entered at the point-of-sale).
- Coupon redemption through an app.
Return on Ad Spend
Getting the most bang for your buck as measured by Return on Ad Spend prevails as the leading metric measuring campaign effectiveness across all forms of broadcast and narrowcast media, particularly if campaigns can be measured discreetly. Although the correlation between mobile purchase intent, conversion and the media channel source is not always as directly measurable as compared to the same Internet-based marketing campaigns delivered through computers, there are other metrics to track resulting actions that provide a strong case for rethinking the concept of how to measure the effectiveness (and growing importance) of mobile marketing.