1. SET SHORT-TERM AND LONG-TERM KPIS
Brands are increasingly utilizing digital channels to meet both long-term and short-term marketing objectives, which is altering the function of digital channels. In this setting, innovation in data-driven marketing across all channels will be crucial to unlocking future development, and creating new tools and KPIs at the core of a marketing organization will be an integral part of this process.
The measuring framework of advertisers should incorporate both short-term tactical optimization and long-term strategic objectives. Return on investment and return on ad expenditure remain essential to direct-response optimisation, but a greater emphasis should be placed on long-term growth measures that extend beyond brand health, such as customer lifetime value (LTV), long-term ROI, and price elasticity.
In the past, brands have frequently tended to focusing on the short-term benefits of digital marketing, as it is relatively easy to trace conversions and sales to specific campaigns and the relationship to financial success is obvious to the business. In addition, marketing organisations may have lacked the confidence and analytical abilities to calculate LTV, employ econometric tools such as marketing mix modelling (MMM), or conduct controlled tests and lift studies.
Yet, modern measuring technologies make these techniques more accessible (see section 3, below), making it more feasible to take a long-term perspective using KPIs.
2. INVEST IN FIRST-PARTY DATA INFRASTRUCTURE
Now that third-party cookies are being phased out and users may more easily opt out of monitoring, marketers are confronted with developing privacy-conscious methods for transforming data into consumer information.
If organizations have the appropriate data architecture and consumer consent in place, they can leverage first-party data to personalize customer experiences based on where each individual is in the customer journey. It is also essential for determining LTV based on how frequently a consumer makes purchases during a normal purchase cycle, how much they spend each time, their expected expenditure across the whole brand relationship, and the probable length of that connection. With this information, companies can optimize their advertisements for customer value versus unique and similar audiences.
The application programming interface (API) plays a significant role in enabling campaigns to be driven by an advertiser’s first-party data paired with that of ad platform partners in a manner that respects consumer privacy. For instance, businesses may conduct lift studies via the Meta Conversions API to assess both upper-funnel reach campaigns and lower-funnel performance activity.
Bolia, a Danish furniture retailer, utilized the Conversions API in order to comprehend the connection between online advertising and in-store sales. Its media agency, Dentsu Denmark, assisted in structuring and anonymizing the brand’s retail sales data and linking it to its digital and physical channel activities.
Bolia could therefore monitor the effect of Its advertisements on both online and offline sales, and subsequently optimize its campaigns according on the purchasing inclinations of the target demographic. As a consequence, the brand earned a fourfold increase in attributed sales, a twofold improvement in return on investment, and a 23 percent increase in attributed online conversions.