Being able to measure how well a company’s marketing is performing is essential in order to understand the impact campaigns are having towards meeting the goals of the business and in driving growth and profitability. It also enables an organisation to identify where opportunities exist to make changes and optimise budgets.

  • Defining digital marketing
  • Understanding campaign effectiveness
    • Defining KPIs and objectives

For the purposes of this guide, the focus will be on understanding the effectiveness of digital marketing. However, for the majority of companies, this may be only one element of their overall marketing activities if they are using offline as well as online media. In such cases, the effectiveness of a company’s digital marketing should not be looked at in isolation, since its effectiveness will be part of a bigger picture.

Defining digital marketing

Digital marketing can be defined as the messages put out to audiences through channels such as search, online display advertising, digital out of home (DOOH), connected TV, social media, email and affiliate marketing, across all digital devices, including desktop or laptop computers, tablets and mobile phones.

One of the many advantages of digital marketing has always been the ability to measure its impact, often in real time. As digital media has evolved, it has become clear to marketers how critical digital channels are in achieving the reach and frequency they need to build their brand. In response to this and the impact of the economic climate, there has been a shift towards higher digital budgets, with over half (58.3%) of marketers saying they have increased their spend on digital, according to Marketing Week and Kantar’s Language of Effectiveness study.[1]

Marketers recognise how crucial measurement is in digital marketing and continue to prioritise it. In Econsultancy’s 2023 Future of Marketing survey, there was an almost unanimous response in support of its importance, with 99% of those surveyed responding that data, analytics and measurement is going to become more important, or stay as important, in the next two years.

Understanding campaign effectiveness

A company should be looking to determine how its marketing spend has helped to achieve its goals. This means understanding which channels have worked more effectively in driving a particular outcome and delivering incremental sales.

A key part of any campaign brief is to identify the objectives of each marketing activity and to set clear KPIs and metrics at the outset in order to determine the measures of success. The measures of success should also take into consideration the type of activity being undertaken, in terms of whether this is focused on performance or brand marketing, which will impact the time period over which measurement takes place.

Defining KPIs and objectives

When exploring alternative approaches to using third-party cookies, it is important for companies to be led by their specific campaign objectives and KPIs. Econsultancy’s guide on the Fundamentals of Marketing Measurement and Analytics features a simple model (Figure 1), which shows how business or brand objectives should sit at the top of the measurement pyramid, with a small basket of KPIs under this which ladders up to those objectives. These KPIs can in turn be tracked using a larger set of metrics that also ladder up to specific KPIs.

Figure 1: Aligning objectives, KPIs and metrics

A diagram illustrating how to align objectives, KPIs and metrics in retail media

Source: Econsultancy

Marketing Week’s 2023 Language of Effectiveness survey, supported by Kantar, revealed there is a tendency for companies to focus on short-term metrics for their effectiveness tracking. As illustrated in Figure 2, the top five metrics were conversion rates, clickthrough rates, new customer acquisition, leads generated and return on investment (ROI), where each was cited by between 44% and 49% of marketers.[2]

Figure 2: Metrics used by companies in their effectiveness tracking

A chart showing survey results from the question "Which of the following metrics do you currently use in your effectiveness tracking?" from Marketing Week's 2023 Language of Effectiveness Survey.

Source: Marketing Week’s 2023 Language of Effectiveness Survey

In terms of long-term metrics, the only one cited by more than 40% of respondents is brand awareness, with other metrics seeing around 32% or less response, including customer retention rate, brand attributes, customer lifetime value and net promoter score.

It is important for companies to consider the balance between short-term and long-term measures. While there is recognition of the importance of brand building, it is clear that with the challenges around the economy and pressures on budgets, marketers are still being driven by the need to generate sales and deliver on short-term measures. As highlighted in Figure 2, this will generally lead to more of a focus on short-term metrics, as opposed to taking a longer-term view based around business outcomes.

Findings from Marketing Week and Kantar’s Language of Effectiveness survey point to marketing effectiveness needing to be better aligned to business priorities and senior leadership.[3] The report argues this should be achieved by embedding an understanding of the full commercial return of all short- and long-term marketing activity throughout organisations, as well as building the culture and capability to measure it credibly.

To respond to taking a more long-term view there is a need to focus on outcomes. While the metrics shown in Figure 3 can provide some insight into how audiences have responded to a campaign, companies should have a set of clearly defined objectives, which then link directly to business outcomes such as customer satisfaction, retention and lifetime value.

Figure 3: Metrics vs outcomes

Source: Econsultancy

Understanding what success looks like will help a company determine the outcomes and goals they are looking for and what needs to be measured.

“Understanding if a particular measurement approach is successful will depend on the success metrics defined upfront. For example, for most of the investment, is it profitable or helping to grow share? For some part of the investment, is this helping to grow brand health metrics, such as spontaneous brand awareness or top of mind?

“Defining what success looks like upfront has helped us to make sure we are on the right track and keep the confidence of senior stakeholders regarding how we are managing marketing investments.”

Mauricio Ferreira, Marketing Effectiveness Lead, Confused.com

This was a key point highlighted in discussions with the IAB in terms of having established objectives at the outset and being clear on what success looks like.

“Setting clear objectives and key performance indicators (KPIs) before launching a campaign is vital in allowing for targeted tracking and measurement. This is even more important given the industry’s shift away from third-party identifiers. The right approach hinges on defining what success looks like for that particular campaign from the outset and the metrics that will most clearly indicate whether those objectives are being met.

“Secondly, the use of various measurement and tracking solutions aids in assessing campaign effectiveness. These include brand studies and attribution modelling, which allows for the tracking of customer interactions and conversions.

“Thirdly, the ability to track the customer journey across different touchpoints provides valuable insights into what led to a sale and where improvements can be made. This is facilitated by industry-wide insights from UKOM on how audiences behave online, as well as ad tech that provides accurate data on customer interactions.

“And finally, the use of attention metrics allows for a deeper understanding of what content or creatives are having an impact, enabling more precise media planning and campaign optimisation.”

The IAB’s Measurement Toolkit breaks down the key steps involved in creating a measurement plan and outlines methodology options.[4]

Figure 4: A blended approach to the use of measurement methodologies

A chart showing the features of a blended approach to the use of measurement methodologies

Source: IAB UK

Chloe Nicholls, Head of Ad Tech, IAB UK

As illustrated above, different measurement approaches can help determine how a campaign has performed at different points in the customer journey, but there is a need for companies to have a holistic view of how their campaign has performed. In order to achieve this, a common suggestion among the interviewees for this guide was that companies can consider using a combination of methods. Adopting a blend of approaches can provide companies with better insight into how their marketing activities are performing, and what is driving incremental sales, as well as counteract the challenges around the continuing decline in access to third-party cookies and having to rely on last-touch attribution.

“Understanding effectiveness needs to provide a holistic view of all our activities. From a sales perspective, we’re offline and online. We do a lot of PR, events and influencer marketing as well as traditional print and
out of home.”

Sebastian Cruz, Regional Digital Marketing and Media Director, Shiseido, Asia Pacific

 “You can’t just measure digital activities on their own. Companies need to know how they compare to other channels so they can have a holistic view. The benefits of using an approach such as marketing mix modelling to measure effectiveness is it puts all the different media channels into one comparable framework.”

Dr Grace Kite, Economist and Founder, Magic Numbers

The following chapters cover the different marketing measurement approaches that can used by marketers, and some of the key benefits and challenges to be considered when determining which approach or blend of approaches would work best:

Laura Chaibi, Director of International Ad Marketing and Insights at Roku Inc, describes that when focused on performance metrics tied to digital outcomes, the volume of performance data can feel like instant gratification due to the speed of outcomes. Whether it be an increase in search, website visits or even direct conversions to immediate sales, an overdependence on these metrics to grow indefinitely can happen. At some point, a ceiling is reached and marketers need to anticipate this.

“When a brand or category maximises or exhausts all their digital channels (search, social, video, mobile, display) and needs to seek growth elsewhere, they also need to prepare to reorient around what success looks like and the associated metrics. This might be brand health metrics, share of category volume or value and seeking white space opportunities for the brand to be associated with i.e. brand attributes that are not a natural fit. Mental shortcuts then need to be made through advertising, such as a toiletry brand moving into beauty, or a snack brand into a main meal association.

“CTV advertising is a great bridge from digital into TV, as a direct leap would open up huge absolute reach and demand, and the brand (if a scale-up brand, for example) may not be equipped to manage the distribution and demand. As cited from Dr Grace Kite, the absolute volumes of conversion she has seen typically stay the same, so if a brand converts 3% sales in digital and moved to TV, for example, they need to be prepared to manage the sales volume at mass reach and the distribution needs to be in place.”

  • Measuring the performance of digital marketing activity is central to understanding its effectiveness and value to the business. It also enables campaigns to be optimised and for high-performing channels and activities to be prioritised.
  • To truly understand effectiveness, marketers must make sure they grasp the full range of effectiveness measures available and their role in driving short- or long-term gains.
  • In order to define success, clear objectives, KPIs and metrics must be established from the outset. Whether they are focused on performance or brand marketing, or both, the KPIs and metrics should align with the growth strategy for the business.
  • Consider using a blend of measurement methods to gain a deeper understanding of how marketing activities are performing over time.

This guide is based on primary research which involved exploring findings from two reports:

  • Econsultancy’s 2023 Future of Marketing report, which was based on a survey of 835 client, vendor and agency-side marketers. The survey was fielded to Econsultancy and Marketing Week’s audiences between 9 June and 3 July 2023.
  • The Language of Effectiveness 2023 report has been produced using responses to an online survey of 1,369 qualifying marketers conducted by Econsultancy’s sister brand Marketing Week between 27 March and 28 April 2023.

In-depth interviews were carried out with industry experts. Econsultancy would like to thank the following interviewees for their invaluable contribution of time and expertise to this guide:

  • Kumar Amrendra, Head of Digital Marketing, Sky UK Ltd
  • Amy Blasco, Partner, Enterprise Data, Experience and Marketing Lead, IBM
  • Laura Chaibi, Director, International Ad Marketing and Insights, Roku Inc
  • Sebastian Cruz, Regional Digital Marketing and Media Director, Shiseido, Asia Pacific
  • Gary Danks, General Manager, AIM, Kochava
  • Mauricio Ferreira, Marketing Effectiveness Lead, Confused.com
  • James Hurman, Founding Partner, Previously Unavailable
  • Gabriel Hughes, CEO and Founder, Metageni
  • Dr Grace Kite, Economist and Founder, Magic Numbers
  • Chloe Nicholls, Head of Ad Tech, IAB UK
  • Roxane Panopoulos, Group Manager, Regional Measurement & Insights – Netherlands and Nordics, Snap Inc
  • Marina Peluffo, Head of Business Intelligence, Prima (speaking as industry expert)
  • James Sharman, Northern Europe Digital Acceleration Lead, Haleon
  • Steven Silvers, EVP, Global Creative and Media Solutions, Kantar

Lynette Saunders is a Senior Analyst at Econsultancy, where
she works on delivering industry-leading research, briefings and
reports for the digital marketing industry and speaks at a number
of external conferences.

Lynette’s previous experience includes delivering web analytics, measurements and insights, as well as leading usability and
customer experience programmes focusing on improving the
overall online customer experience for Cancer Research UK
and the Royal Mail Group.