In the realm of digital marketing, assessing effectiveness is crucial for driving success. A robust measurement framework is essential, allowing businesses to gauge the contribution of digital marketing at various levels. Here's a breakdown of key components to consider:
1. Corporate Objectives: Is digital marketing aligned with and meeting overall corporate objectives?
2. Marketing Objectives: Are specific marketing objectives being achieved through digital efforts?
3. Marketing Communications: Are the objectives related to marketing communications met?
These measurements align with different levels of marketing control identified by Kotler (1997), encompassing strategic control (question 1), profitability control (question 1), annual-plan control (question 2), and efficiency control (question 3).
Efficiency measures are geared towards optimizing the costs associated with online marketing while maximizing returns across various aspects, including acquiring website visitors, converting visitors into desired outcomes, and fostering repeat business.
Crafting a measurement framework
To facilitate this measurement process effectively, organizations should establish a measurement framework or a management dashboard. This framework should meet specific criteria:
- Macro-Level Effectiveness Metrics: These metrics evaluate whether strategic goals are achieved and gauge the extent to which e-marketing contributes to business objectives, such as revenue contribution and return on investment. This aligns with the levels of marketing control specified by Kotler (1997), including strategic control, profitability control, and annual plan control.
- Micro-Level Metrics: These assess the efficiency of e-marketing tactics and implementations. They are often referred to as performance drivers, as they aid in achieving strategic objectives. Examples include attracting more site visitors and increasing conversion rates. These metrics correspond to the marketing efficiency control specified by Kotler (1997).
- Stakeholder Impact: Assess the impact of e-marketing on the satisfaction, loyalty, and contributions of key stakeholders, such as customers, investors, employees, and partners.
- Cross-Channel Comparison: Enable comparisons of performance between different digital channels and other marketing channels.
- Competitive Benchmarking: Use the framework to assess e-marketing performance relative to competitors or best practices in the industry.
When selecting metrics, it's advisable to follow the SMART mnemonic (Specific, Measurable, Achievable, Relevant, Time-bound). Consider three levels of metrics: business measures, marketing measures, and specific digital marketing measures.
Key ketrics for digital marketing performance
A comprehensive measurement framework encompasses various metrics:
- Business Contribution: Evaluate online revenue contribution (direct and indirect), category penetration, costs, and profitability.
- Marketing Outcomes: Monitor leads, sales, service contracts, conversion rates, and efficiencies in conversion and retention.
- Customer Satisfaction: Assess site usability, performance, contact strategies, opinions, attitudes, and brand impact.
- Customer Behavior (Web Analytics): Examine customer profiles, segmentation, clickstreams, site actions, and visitor behavior.
- Site Promotion: Evaluate attraction efficiency, referrer efficiency, cost of acquisition, reach, search engine visibility, link building, and email marketing.
These metrics can be applied across various industries and are adaptable to social media engagement measures.
Channel promotion metrics
Channel promotion focuses on evaluating the volume, quality, and value of website, social presence, and mobile site visitors. Key measures include:
- Referral Mix: Assess the percentage of all referrers or sales, cost per acquisition (CPA), and contribution to sales or other outcomes for each referral source, such as paid search or display ads.
Channel buyer behavior metrics
Once visitors are attracted to the site, it's crucial to monitor their behavior, content engagement, and interactions with the site. Key ratios include:
- Bounce Rates: Indicating single-page visits.
- Home Page Views: As a percentage of all page views.
- Stickiness: Measuring how long visitors stay on the site.
- Repeat Visits: Tracking customer return activity.
Channel satisfaction metrics
Customer satisfaction with the online experience is paramount. Metrics to consider include:
- Customer Satisfaction Indices: Covering ease of use, site availability, performance, email response, and benchmarking against other sites.
Channel outcome metrics
Traditional marketing objectives like sales, leads, and conversion rates are pivotal. Key measures encompass:
- Conversion Rate: Percentage of site visitors who achieve a specific outcome.
- Attrition Rate: Describing visitor loss at each step of a conversion funnel.
Channel profitability metrics
Ultimately, digital marketing should contribute to business profitability. Assessing contribution and profitability through discounted cash flow techniques is crucial.
Multichannel evaluation
In a multichannel environment, it's essential to measure how different channels support each other. This involves assessing channel cross-over effects, such as the impact of a paid search campaign on in-store sales. Metrics encompass revenue, core processes, customer and stakeholder satisfaction, people and knowledge, and channel contribution.
Adapted from: Chaffey, D. and Ellis-Chadwick, F., 2012. Digital marketing: strategy, implementation, and practice (Vol. 5). Harlow: Pearson.