For marketers, keeping up with today’s rapidly shifting customer landscape can feel like an unending sprint. The same can be said of the ever-growing list of integrated measurement solutions. Indeed, 54% of marketers admit they’re overwhelmed by the number of data, measurement, and analytics solutions that are available, and report decreased confidence in those solutions’ ability to produce solid business results.1
We hear this first-hand from our customers too. They understand that a privacy-first, cross-media measurement strategy is the foundation of the future, but they’re not quite sure how to begin implementing it today. That’s where we can help.
For years, we’ve been talking to brand marketers about the value they get from cross-media investments. Based on what we’ve learned from these conversations, we’ve determined that there’s a simple formula you can follow to ensure a successful measurement strategy — one that isn’t just a reactive play to protect your investments but that acts as a proactive growth engine.
I’ll walk you through its three steps.
1. Capture the right signals
In a marketing ecosystem inundated with new products, you must be intentional about setting your measurement strategy. This means prioritising consumer data and signals that align to your business goals. Unfortunately, many companies are still operating legacy systems that don’t allow them to do this.
The legacy way of capturing signals — through cookies and other third-party identifiers — no longer provides a framework for accurate measurement. Simply put, a thoughtful first-party data strategy is the only way to capture data in a safe, effective manner that also sets you up for incremental success. Google’s AI can help with this approach, by taking your measurement and turning it into performance.
Your first-party data strategy should complement the signals you already gather through panels and third-party partners. By investing in first-party data intentionally and asking only for the information you need, you can also be a better ambassador of your users’ data.
To become a growth engine, your measurement strategy must rely on a mix of solutions that collect signals aligned to your business goals. From first-party data to digital reach, technology partners like Google can help you find the right formula of solutions to navigate ongoing identifier degradation, layer on advanced integrated measurement, and tie these to your audience strategy for the most proactive full-funnel approach.
2. Determine the value of your channels
The next step in the formula is to determine the value of your various marketing channels, based on the impact they have on your business. This will give you a better understanding of return on investment (ROI), help you forecast future revenue, and foster a strong connection between marketing and finance teams within your organisation.
Customers who accurately measure their channels using MMM can exponentially improve their ROI.
One of the best ways to evaluate your channels is through marketing mix modelling (MMM). I’ve frequently seen that customers who accurately measure their channels using MMM can exponentially improve their ROI.2 MMMs are an excellent cross-channel planning tool, because they provide historical and predicted value for the next dollar spent. MMMs are also privacy durable and holistic, yet capable of enough granularity to offer actionable insight into ROI improvement.
A powerful example is The Hershey Company, which partnered with Google to optimise its YouTube strategy and measured the results using an MMM. Hershey and Google tested different approaches — like trying various ad formats — over several years. Results were telling. Hershey’s MMM showed YouTube to be its top ROI-driving media channel, producing an ROI increase of more than 65% since 2018. Findings also showed that YouTube continues to drive significant candy sales for the company, delivering an average year-over-year ROI increase of 5.5%.
3. Optimise results through experimentation
The final step of the framework focuses on optimising results through experimentation. Constant testing is key to determining which campaign adjustments to make in real-time to drive performance and increase ROI. Research suggests it pays off.
The Harvard Business Review (HBR) found that advertisers who ran 15 experiments in a given year saw about 30% higher ad performance that year, compared to advertisers who did not experiment. Moreover, HBR found that running tests over multiple years can also increase returns, showing the positive long-term impact of experimentation. Advertisers that ran more than 15 experiments in the prior year saw roughly 45% increase in performance.
Best-in-class brands have a robust appetite for experimentation and constant iteration on their results.
In partnership with Nielsen, we did a study of our own to underscore the critical role that experimentation plays in strengthening the role of MMMs. Specifically, we found that when brands adjusted their MMM inputs with sales lift data generated by experiments, they saw a 84% average increase in return on ad spend (ROAS) attributed to YouTube.3 Moreover, nearly 73% of the ROAS increase came from base variables (brand distribution and pricing), suggesting that marketers who do not include experimentally driven inputs in their MMM may be significantly undervaluing their media.4
Improvements in ROI come from brands’ commitments to testing and activating test results over time. We work with many of our customers to create learning agendas that focus on important hypotheses and actions tracked over a given period of time. Repeatedly, we see that best-in-class brands have a robust appetite for experimentation and constant iteration on their results.
It’s easy to feel overwhelmed in today’s marketing ecosystem. By adopting this formula, however, you can get back in the driver’s seat. Jump start your evolution to a more modern, proactive integrated measurement strategy by capturing the right signals, determining the value of your channels, and optimising your results through experimentation.