The right information enables marketers to determine the return on investment (ROI), make data-driven decisions, and allocate resources effectively to drive growth and achieve desired conversions.
But how do you sort the wheat from the chaff, cut through the clutter, and bring order to chaos?
In this episode of The Undiscovered Metric, we speak to Jeff Coleman, Leader of Digital Marketing Science at Carter’s, a leading designer and marketer of children's and baby apparel that’s been around for over 150 years. His background as an analytics professional, moving from finance, through telecoms, and reinventing himself in the digital marketing space leaves him uniquely placed to share his thoughts on how to stay focused.
Keep reading for the highlights, or watch the video below!
In today's tech-fueled, data-laden world, marketers often find it challenging to choose the correct metrics due to the abundance of options.
With numerous data sources, platform choices, and evolving consumer behavior, it requires careful analysis, understanding of business goals, and industry expertise to identify and prioritize metrics that truly align with marketing goals. With so many to search through, how do you identify the right ones for your business? How do you find that needle in the haystack?
Jeff explains, “The way that you cut out the noise is simply by understanding ‘what is the business model that you're supporting?’ So, really digging in and making sure you understand the business. Understand if you are successful in achieving the business objective and the key metrics that you can look at to help you improve performance. In this space, supporting paid media, my main key metric is return on ad spend (ROAS). But what we have been looking at most recently is not just any view of ROAS, but incremental return on ad spend (iROAS) - what is our investment getting us in incremental return?”
iROAS has become vital for marketers as it quantifies the revenue generated by advertising campaigns relative to the amount spent. As a recent Adweek article says, “Transitioning from ROAS to iROAS provided a clearer picture of advertising effectiveness.”
Adding incrementality to ROAS, a business can gain a deeper understanding of each channel's performance. A campaign with a higher iROAS is more likely to be able to spur growth. A lower iROAS, however, can indicate that other elements, like customer loyalty, are driving growth, in which case the campaign has to be reevaluated or funds transferred to a more successful strategy.
“If you stop doing marketing, there is a natural level of sales and traffic that is just going to come off of brand strength. But what you want to know as a marketer is, ‘What are we getting incrementally for our investment?’ So, that's what iROAS gives us. It gives us a true understanding of what is the incremental impact that every dollar is making on driving the business.”
So, how do you marry these metrics against all the other aspects of a business to make sure that you're seeing the full picture of performance? Jeff suggests looking at it in three different lanes.
- Cost: How can we buy the ad or spend the money in the most cost-effective way?
- Output: How can we ensure that our targeted audience is as highly engaged with those assets as possible?
- Outcome: Once they land on our site or in our stores, how do we ensure that they are engaged from an eCom perspective and converting as much as possible?
“From there, you can really start to dive in and really drill down into a number of other indicators that are going to help you understand the levels of ad engagement, the levels of eCom conversion, or store conversions that you have. What makes up that basket size? You start to cut this data down from this high level all the way down to the customer and look at segmentation. It really starts to take on a life of its own the deeper you get.”
With so many ways to slice and dice data, the metrics can sometimes get inflated, and it can be easy to lose track of the final outcome. Focusing too much on metrics and strategy can lead to overlooking the human connection essential for successful marketing. Engaging with customers directly is crucial to avoid this common pitfall.
Jeff seems to agree. “With every business it all starts and ends with the customer. So, the first thing is just to understand who your target customer is. Understanding that and having great customer insights is going to allow you to understand how you need to talk to your customers and know where they show up in the great landscape of the marketplace. Understanding customer segmentation, doing the homework and the due diligence to do all of the customer research insights that you can ahead of time is going to really help inform how you show up and then how you assess your performance against that.”
The future of advertising is personalization and knowing your customer is key for this now essential strategy. By understanding the individual preferences, behaviors, and interests of customers, marketers can create bespoke content, provide relevant product recommendations, and offer tailor-made communication. This helps to build brand loyalty, improves customer engagement, and ultimately drives revenue growth in the long term.
As pointed in this recent Medium article, personalization has become a key strategy for successful marketing in 2024 and “brands that harness data, leverage artificial intelligence, and create seamless customer experiences through personalization are poised to stand out in an increasingly crowded marketplace.”
Jeff goes into more detail. “Just like we as individuals grow, our buying patterns grow. You maybe have a different buying motivation from when you had your first child, and now you have three or four. You've got different kinds of considerations from an economic standpoint. So, how do we talk to you through your customer lifetime journey to make sure that we are constantly presenting the best voice we can to make sure that our customers understand the value of our brand, the strength of our brand and how we show up in the marketplace?”
Simplicity in metrics and customer interaction is crucial for marketers to avoid overwhelming themselves or their customers. Clear, understandable data drives informed decision-making, while straightforward customer interactions boost engagement and satisfaction.
Amidst the chaos, Jeff stands unfazed. “Out of all of the noise, I make sure that at the end of the day the information I'm taking in helps me understand the business model. That really is the be-all and end-all of how I stay focused and grounded in the noise and the clutter of all the information that exists out there. Is there a new idea? Is there a new way of looking at things that will help with the business questions that I am trying to solve?”
Finding and focusing on the right metrics, despite all the smoke and mirrors, and understanding your customers improves communication, provides a better user experience, and leads to more effective marketing strategies.