Hi. Welcome to Expert Talks at InsightsNow, in the last video, we spoke about how in three years’ time nearly 80% of global commerce will be either directly or indirectly influenced by digital marketing ROI means and why it will require a change in both mindset and metrics for business leaders and marketing teams to be aligned on the effectiveness of the marketing space.
I think the mindset is a lot more important than metrics and we will discuss why that is the reason. In the current digital world as a customer traverses through her journey from awareness to consideration to purchase and eventually becoming a brand loyalist or advocate, she is exposed to a multitude of touch points both physical as well as digital. The customer though may choose to engage or respond to some of these touchpoints, a number of them and it is not necessarily likely to be linear. If anything it is likely to be nonlinear or unpredictable.
So what it essentially means is that each shopping journey for the same customer is likely to be unique and is a combination and a culmination of multiple touch points that she is engaged in along the way. However, historically marketers have been used to looking at marketing effectiveness from the perspective of what I call last touch point attribution.
So what it essentially means is that if a customer has clicked on an email and from there visit the website and she’s purchased a particular product that sales are attributed to that email campaign. Or possibly if there has been a TV ad or a newspaper ad and the next day there is an increase in store footfalls and sales, that growth is attributed to that particular newspaper or TV ad. However, it tends to ignore the impact of all the previous campaigns which have actually helped create awareness and consideration for the customer.
Now, this could have worked in previous times where the type of influence such triggers and campaigns were fairly spread out. However, in the current world where customers are inundated with a plethora of prompts, triggers, and digital touchpoints, and with built a time gap, this particular method will not work. So there are a few factors that one needs to take into consideration while looking at marketing effectiveness attribution so number one is the impact of each individual touch point.
Number two is the impact of the sequence in which a customer engages with that various touch points and number three is the time decay impact. Post a nudge or a prompt the customer engages with. So impact of each individual touch point. Let’s talk of an example. Let’s say you see an ad and decide to visit a store. The impact of you finding or not finding the range or availability to your liking is likely to be far higher than if you are visiting the company’s website or e-commerce app from the confines of your home and then finding or not finding anything to your life.
The second one is the impact of the sequence of touchpoints. So in a case where I receive an email from a company, I open that particular email, and then I’m served a Facebook ad and then decide to visit the company’s website. The probability of my conversion there is likely to be very different from if I were served a Facebook ad first and after some time I get an email, I open that particular email and from there I click on that particular link to approach the website.
The third one is essentially about time decade or the impact of time decay. So depending upon whether the ad is one earlier, one day earlier, or one week earlier, the impact of the ad and the mindset of the customer obviously tend to weaken over a period of time. So for good attribution modeling, all these three factors need to be considered. But these are essentially internal factors. This need to be overlaid with a few extraneous factors, which is one, what is the customer’s context? Is she going on vacation? Is she feeling rich over children actually going back to school? So what is that particular context?
Number two is market events. Is there a festival or occasion around the corner? Is there a change of seasons? Is there some social event happening?
Number three is competition and clutter. So is there a new competition? Is competition really aggressive about their own marketing spends? And hence there’s a lot of clutter and marketing campaigns that are happening and you need to cut through that to get across to a customer. So these are various combinations based on which when a company does a marketing campaign, the outcomes will depend on a combination of these factors.
So if I made it sound a little too complicated, the reason is, like I stated at the beginning of this particular video, it is more about mindset than about metrics. So leaders will need to understand that going forward.
Number one, trying to make an immediate sale or an impact out of a marketing campaign is going to be increasingly more challenging and possibly a lot more inefficient.
Number two, given that customer mindshare, is built over a period of time, constancy of purpose and value proposition is absolutely mandatory for customers to stay in touch with the brand and continue to be their fans.
Number three, given the type of clutter and multitude of communications that are happening, new customer acquisition is going to be increasingly costly and hence investments are best served in customer retention and advocacy.
Number four, again, the signal-to-noise ratio is going to continuously weaken and that is why brands and leaders will need to take a leap of faith in investing in customer data and experience-led initiatives.
In the next video, we’ll talk about metrics. For each of those three blocks, we spoke of how one can look at attributing the impact of a market campaign and measuring marketing effectiveness. I hope you found this useful. Please do follow us @insightsnow.cloud. Thank you.