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Return on investment is missing in action

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Return on investment is missing in action


The marketing team spent its budget dollars wisely. But management can’t see the results.

When business spends money on anything, it expects to see a “return on investment”— a lift that has some correlation with the spend. This would be fine if marketing was a machine, with fixed, measurable inputs and outputs. Except we are living in “the Information Age”, so Industrial Age accounting will fail to notice what is really going on.

Marketing often appears as a cost sink on the balance sheet. It’s relationship to output is not always obvious. Kathleen Schaub, marketing management and organization strategist, and Mark Stouse, chairman of Proof Data Corporation, want to shed some light on this situation. Schaub focuses on how complexity affects marketing, while Stouse takes a deeper look at analytics. These two angles converge on a common point: the old way of measuring marketing ROI misses a lot, providing inaccurate guidance for marketing efforts.

Schaub goes into further detail in her paper “Marketing Is Not a Vending Machine.”  “Markets are what science calls complex adaptive systems. The interactions of many independent agents, both individuals and enterprises – customers, companies, influencers, partners, and governments, produce feedback loops that cause situations to constantly change. Change produces many unknowns.” Schaub wrote.

Those feedback loops have speeded up, thanks to globalization and digitalization. “There’s no breathing room,” Schaub told us, so marketers have a hard time keeping up. It is only in the past several decades that data and computers have finally provided a way to see this happening. “Now that things have speeded up, we can see these patterns in the data.”

“ROI for marketing is not there.” Schaub said. “Never has been. Never will be. Not in the old standard sense.” 

The only thing certain is uncertainty

“The big shift, which is probably permanent, started with COVID,” Stouse said. “The feedback loops really matter,” Stouse continued. Now you needed to have a value goal, a route to value, and the ability to track your effort, much like a GPS, he said. This is running concurrently with the disintegration of third-party data.

To get a more realistic picture, some marketers are returning to an older technique: marketing mix modeling (MMM). This technique is more common among larger Fortune 500 companies, Stouse said. But it was too balky to make operational — too slow, too manual, too expensive, too hard to scale, and hard for people to understand.

Today, MMM is getting a second look. “Automation has eliminated many of these challenges to operationalizing analytics.” Stouse said. “MMM is rooted in multi-variable regression analytics, which is the fundamental underpinning of the scientific method.” And this is mainstream and well understood, he added.

Any change in analytics will also trigger a change in organization. “You cannot continue to have the same kind of rigid, command and control, hierarchical, siloed kind of organization and have these very rigid waterfall business processes. They are just too slow, too inhuman, they are barren of information, because information cannot flow to where it is needed,” Schaub said.

“I kept asking CMOs and CEOS, ‘can you do ROI yet?’” Schaub recalled. “The answer was always ‘no’”. They had workarounds, like attribution, and pushing marketing “down funnel” to help sales, “but at the end of the day, people have to give up the fantasy that it [marketing] can ever be completely predictable.” Schaub said.

People believe in cause-and-effect, that with enough data, the right strategy, the right work processes, or enough efficiency, they could figure things out, Schaub said. COVID crashed that belief system. To rebuild, analytics will help, but organizations will also have to re-align so that they can work better “in conditions that need our response as opposed to our ability to predict.” she said.

If you can’t predict, project

Businesses can still draft scenarios and craft projections, laying down an outline of how things are expected to happen. “Then you have to ‘fast follow’ as the future becomes the present, with latent, low-level re-calculation, so you can find out where you are relative to that projection.” Stouse explained.

Here Stouse compared marketing analytics with GPS. The destination is not a fixed ROI point reached by a certain date. Instead, the goal can be reached despite changes in traffic and necessary detours. Just as the GPS recalculates, the decisionmaker can also recalculate the market spend or rescale the project to better accommodate reality.

Like GPS, you need a driver who can make decisions and change course as needed. Here the marketer is at the wheel, advised by analytics, able to react to circumstances, seize opportunity, or reduce risks as needed, Schaub explained. This is need not be a single person, but will often be an agile, multi-disciplinary team which is quicker, smarter, more innovative, and which can foster human problem solving. “You build for the long term, but the only time you can act is now,” Schaub said.

Learning to live with speed

The speed of data, and feedback loops has increased tremendously, changing the digital landscape more quickly than a company’s capacity to comprehend and keep up.

Here the concept of the OODA Loop — Observe, Orient, Decide, Act — becomes relevant. The concept was coined by fighter pilot Col. John Boyd, who proved that if you can do this faster than your competitor, he will be stuck reacting to your last action as you execute your next move. “This is increasingly where business is and increasingly where marketing is,” Stouse said. “You have all these variables, and these variables are moving at a speed that the unaided human brain can’t track.”

“Being able to use software…compresses the OODA loop.” Stouse gave a real life example where his firm is working with a technology company. “This is a huge B2B enterprise tech company. It’s a long cycle business who has used MMM for six or seven years in a very traditional, conventional way.” he said. “[B]y the time the analytics reaches the marketing people, it’s so out of date that the prediction no longer matters…They don’t need to change the math. They need to change the speed at which it is all computed.”

Read next: More about leveraging the OODA Loop

As Schaub noted in her paper, a marketing department may have to track up to 30 variables to provide the insight needed to understand what present conditions are like. But it may not take as long as one might expect to pull them all together. Data automation can shorten the time it takes to weave insights from data streams.

“I don’t mean to imply that any of this is easy,” Stouse continued. “But it has significantly improved.” One can use tool sets like Supermetrics  or Datorama (both Proof partners) to gather data streams, sanitize, cleanse and harmonize them, and then pipe the data into platforms like Proof or Tableau.

“We can go into a customer that has data but doesn’t have any analytical history at all…and the first 10 models can be up and running in less than 60 days.” Stouse said. Go to a traditional consultant doing MMM, and “it would be 10 to 12 months before you saw your first model.”

In the second part of this two part article learn why predictability and control are out, while perception and reaction are in.


About The Author

William Terdoslavich is a freelance writer with a long background covering information technology. Prior to writing for Martech, he also covered digital marketing for DMN. A seasoned generalist, William covered employment in the IT industry for Insights.Dice.com, big data for Information Week, and software-as-a-service for SaaSintheEnterprise.com. He also worked as a features editor for Mobile Computing and Communication, as well as feature section editor for CRN, where he had to deal with 20 to 30 different tech topics over the course of an editorial year. Ironically, it is the human factor that draws William into writing about technology. No matter how much people try to organize and control information, it never quite works out the way they want to.



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MARKETING

How A Non-Marketing Content Approach Produced Award-Winning Results

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How A Non-Marketing Content Approach Produced Award-Winning Results

Matt Hartley is not a marketer.

And yet, he is a 2022 B2C Content Marketer of the Year finalist.

Though seemingly incongruous, it’s not. Companies don’t all approach content (or marketing) with the same organizational structure.

Matt leads editorial strategy for TD Bank Group as a senior manager in the corporate and public affairs department. Under his leadership, TD Stories took home top honors for Best Content Marketing Program in Financial Services and earned finalist mentions for Best Content Marketing Launch and Financial Services Publication in the 2022 Content Marketing Awards.

Those results prove that department, title, and reporting structure don’t matter if the content works.

“We tell stories aligned with (the company’s) communication goals. We’re not necessarily looking to sell something. It is about brand building, thought leadership, financial literacy,” Matt explains.

Here’s how a non-marketer finalist for Content Marketer of the Year built an award-winning program.

If the #Content works, details like reporting structure, title, and department don’t matter, says @AnnGynn via @CMIContent. Click To Tweet

Launching the newsroom

In 2018, Matt joined TD as a content strategist. He was hired partly because of his background in reporting and creating new content products. Matt had worked as a technology reporter at The Globe and Mail and the National Post. He also created the Financial Post Tech Desk, a home for Canadian and international tech news, and was the founding editor of the Post’s arcade video-game news site.

TD leadership had recognized the shifting media landscape. They saw fewer earned media opportunities and turned to Matt to help scale a TD-owned channel called TD Newsroom.

While TD Newsroom aligned with the external communications goals, it ended up with an internal audience – less than 10% of visitors came to the site from outside the bank.

Turning the content program inside out

TD Newsroom’s importance grew when the pandemic hit in 2020, making some forms of traditional customer outreach impossible. No longer just another tool in the communication toolbox, TD Newsroom became pivotal.

“Creating our own content and being able to distribute it became crucially important to us,” Matt says.

The TD Newsroom team focused on creating branded service journalism (content intended to help customers), and traffic to the site increased substantially. Topics such as banking tasks you can carry out online, budgeting for income impacted by COVID, and planning an emergency fund took center stage.

That was the beginning of the TD Newsroom evolution.

“We were rethinking how we did content and where the customer was in their journey,” Matt says. The team also doubled down on data-driven content and refined its content strategy.

In 2021, TD Stories debuted. “It places the customer at the center of the story. It tells stories that resonate with customers and colleagues,” Matt says.

The site’s tagline – “Enriching lives one story at a time” – reflects this mission.

TD Stories organizes content around five pillars (as shown in the site navigation in the screenshot above):

  • Your Money features financial tips and advice.
  • Innovation highlights new technologies to create more personalized banking experiences.
  • Community features stories about TD’s involvement in the communities where it operates and where its employees live.
  • Colleagues tells the stories of employees.
  • Insights features thought leadership from the bank’s executives.

TD Stories places the customer at the center of the story, says @thehartleyTO of @TDnews_Canada, via @CMIContent. Click To Tweet

Making everything count

“We’re a small but mighty team within corporate affairs. It’s a flat team – everyone brings ideas to the table. It really wouldn’t work if it wasn’t as cohesive as it is,” Matt says.

The digital content team also functions a little like an agency. In corporate affairs, they work with relationship managers for categories such as personal banking, insurance, US banking, etc., as well as product, partnership, and philanthropic managers.

“We work with them to create the stories. We may pitch to them, asking for a subject matter expert to help us tell a story, etc.,” Matt explains. “We could not exist in a vacuum.”

He oversees a digital content team that includes a data-driven strategy role that has been critical in the TD Stories evolution. That added focus has helped the team in its content development.

For example, the bank’s editorial calendar revolves around repeating deadlines and patterns. Deadlines for retirement plan contributions and income tax returns occur during the same period every year. And each spring, more people begin house hunting.

With TD’s digital content team amping up the content measurement strategy, Matt and team can analyze how well those yearly content pieces perform. They also can better understand what people are searching for, so they can refine and improve the next content iterations.

“We can take those moments and make those moments fresh,” Matt explains. “We can ensure the customer gets the best and most accurate information possible.”

The metrics reflect the team’s dedication to excellence. In 2021, traffic to TD Stories grew more than 125% year-over-year. Almost all the traffic (98%) comes from external sources, including 25% from organic Google searches.

Knowing the real goal

“At the end of the day, the content is not the end goal. The goal is to help educate the customer and help them feel more informed and financially confident. When you keep that in mind, the actual structure of a story or every sentence is a means to an end,” Matt says.

Educating the customer is the goal – story and sentence structure are the means to that end, says @thehartleyTO of @TDnews_Canada via @CMIContent. Click To Tweet

That’s part of the secret science of brand journalism. As Matt explains: “Take the objectives of the business and marry them with stories that the customers find engaging and useful.”

And that’s an award-winning formula regardless of department name, title, or organizational structure.

Want more content marketing tips, insights, and examples? Subscribe to workday or weekly emails from CMI.

HANDPICKED RELATED CONTENT: 

Cover image by Joseph Kalinowski/Content Marketing Institute

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