As a marketing leader you know that reporting and analytics are crucial to tracking your progress. Whether your budget is $2 million or $200 dollars, you’re spending money for a reason and you want to know when you will see a return on your investment. With so many crowded marketing channels it can be overwhelming to sort through all of the data you are surround by on a daily basis. You need a step-wise approach to prioritize the data your are reviewing and make decisions about tactics for improvement.
Maslow prescribes achieving transcendence (self-actualization) by moving step-wise through physiological needs, safety, love, and esteem. Our Hierarchy of Needs for Marketing and Media Insights leads you from tracking activity to predictive analytics. Use our handy how-to guide to gauge how your reporting structure stacks up, and consider implementing our suggestions to create the right conditions for success.
Layer 1: Tracking Your Marketing Channel Activity and Delivery
Are you getting what you paid for?
Whether your marketing budget is $2 million or $200, you’re spending money for a reason. Or, other kinds of metrics—number of emails sent (and leads they were delivered to), website visits, organic activity and more. Basically, the activity your media plan drives, directly or indirectly.
This layer measures and tracks activity from paid, owned and earned media. Auditing in its most basic form, you’re making sure you’re getting what you agreed upon with your media agency or partner, and checking—at regular intervals—to see if your media is on track or if its heading off the rails.
This should be the easiest layer. If your media or marketing people aren’t already doing this, something is wrong. You might be spending money and not getting what you thought (and should).
Layer 2: Assessing Campaign Efficiency
Layer 2 is a natural progression from layer 1. It’s is where you look at and consider ways to optimize and make your activity more efficient.
Once you understand where your campaign budget is going, you can devise strategies to use it more efficiently or effectively. Is your campaign cost efficient? Targeting efficient? Are you getting the impressions you thought you would, and are they valid, quality impressions that drive business results?
This layer is often interlaced with the media reporting in level 1.
For example, you can use services to understand the foot traffic that’s tied to a media buy. Facebook, for instance, has functionality that allows you to walk into a store or location after a media impression has occurred, and while you won’t know how much the customer spent, you’ll be closer to a tangible business result on which you can optimize.
It’s not just measurement to build efficiency and optimization, it’s basic reporting and data analytics to review and inform the business context. Then, you can not only identify but also make some of those correlations. Connections like these allow you to understand how different channels perform against the types of metrics that you measure, but with different values.
Measurement helps identify what you need to change to reach your ideal target audience from a media and planning standpoint. This layer is where many media agencies and companies stop, but there’s so much that can be captured and integrated into your reporting beyond this point.
Layer 3: Analyzing How Internal Factors Influence Results
This is where things start to get interesting (and all too often overlooked). Think about situations or circumstances beyond ad impressions and sales to product perception—the way customers use or do not use your goods or services.
Price is a big internal factor, and it can be tough to see how it aligns with other market activity when more than one person is in control. Long-term pricing actions, for instance, can negatively offset short-term promotions. From a distribution standpoint, is your product in or out of stock? When and how often? When a product isn’t available, people can’t buy it and they may buy the next product on the shelf. Depending on the product, it’s rare that a consumer would just not buy it and wait for it to come back. But, if you’re collecting this kind of data and have the insight to wire it into your reporting system, you can see how different factors affect one another.
This foundational context is extremely helpful for marketing teams. CMOs are under a lot of pressure, constantly questioned when things aren’t going so great. You have to justify what’s happening, and at the same time have a tangible plan to overcome downturns and address concerns. This layer, alongside the standard reporting from levels 1 and 2 can help generate that context and plan.
Layer 4: Analyzing How External Factors Influence Performance
These are things that are considered beyond the control of a business or its marketing, but still impact sales. If you consider these factors from a measurable standpoint, you’ll have a solid grasp on your internal factors and the associated reporting.
No business works in a vacuum, however. Market conditions—customers, environment, weather—can have an effect on tangible factors like price. When you can connect sales activity to a weather event or trend, you’re using a nuanced set of external factors to connect your data and create a meaningful insight-right report.
This layer encourages marketers to conduct a thorough discovery to identify and define the external factors that affect sales, plans or whatnot, and, working with the analytics team, to determine how to best capture data with which to measurable against. This can start as a hypothesis, “weather is affecting sales,” and can lead to valuable insights through testing the theory and setting up future data reporting sources and processes.
Layer 5: Prediction
The analytics holy grail. Where, if all previous layers are complete, you can pull the data together to predict future sales and other business outcomes. Prediction usually falls into two categories:
- Demand planning: “I think my customers are going to X”—forecasting from a demand perspective.
- Scenario evaluation: “If I do X, Y will happen in my sales category”—a kind of “what if?”
A sound data structure underneath in the four lower layers inform the assumptions that you can formulate as a result in layer 5. Like a typical annual finance or budget forecast, information from this layer isn’t so much a prediction of what’s going to happen, but more of an estimate of how to achieve numbers you need to for the year.
We consider measuring your work and your business against [name specific things here] as a good practice, but it’s even better to be able to say “here’s what is going to happen,” and these are the tactics and strategy that’s influencing that goal number.
For example, say you have a client who says they’d like to see 2% sales growth from this year into next year. That may seem reasonable, but let’s say you look at a prediction model that predicts that your client is actually going to experience a loss of 3%, based on information you compiled in levels 1 to 4. All of a sudden, 2% growth is actually 5% growth and isn’t quite within the same kind of reasonableness.
Or is it… Having this information allows you to consider options and perspectives. You have an opportunity to ask yourself which factors are contributing to this downward prediction. What can you change to achieve your client’s business goal that addresses those factors?
You might determine that the tactics you thought you were going to execute aren’t going to get you where you want to be. This, however, is yet another opportunity. A chance to implement a testing scenario where you try something new—introduce a new stimulus or variable into your marketing mix (which, fascinatingly, is a direct conduit back down to layers 1 and 2).
Carefully collecting and using the resulting data from a new action plan effectively creates a feedback loop, which allows you to further integrate your findings into future strategy, making it easier to mine for insights across multiple layers of your marketing hierarchy of needs. The best predictions for the future come from what happened in the past, and the best way to expand and hone that context is by testing.