The history of marketing measurement dates back at least 70 years.
Neil Borden, who served as a professor of advertising at the Harvard Graduate School of Business Administration, is credited with first coining in 1949 the term “marketing mix,” which birthed a model for statistical analysis of marketing tactics to measure sales impact and optimize results.
The fundamentals of a marketing mix model have held sway for decades, forming the basis for modern marketing analytics. Mr. Borden was ahead of his time. But this approach has one glaring limitation, which has become especially problematic in today’s B2B environment: It’s too slow.
The model is, by design, more retrospective than interventional, meaning it’s concerned with analyzing results in hindsight as opposed to actively optimizing. Additionally, its overt focus on short-term sales tends to undervalue long-term brand-building activities.
The new world of business requires an evolved view of B2B marketing analytics. Facing tight budgets and staunch competition, teams can’t afford to analyze results reactively or misinterpret the true impact of their campaigns due to short-sighted measurement.
It’s time to close the loop.
B2B Marketing Analytics and the Virtuous Circle
Today’s most effective approaches to marketing measurement are concerned with ongoing optimization and strategic ROI analysis. The idea is akin to a virtuous circle: constantly learning and improving throughout your campaigns, and then applying all of that knowledge you gained when you start the next one.
That’s why when we say “stay in the loop,” we’re not just talking about keeping up to date on B2B marketing analytics; we’re describing the very goal.
There are four key concepts you should learn in order to orchestrate a marketing measurement strategy that drives a virtuous cycle of consistent improvement. They are:
Sales cycles are getting longer. Measurement must adapt.
There is ample data showing that the average B2B sales cycle has grown longer and longer over the years, often running six months or more. And yet, a vast majority of marketers are measuring digital ROI within the first month of launching a campaign.
As LinkedIn’s Sean Callahan has put it, “most marketers are showing up to their book club having only read a sixth of the book.”
This sort of incomplete analysis is a dangerous practice. Not only does it threaten to undersell the impact of your marketing activities (and thus your budget) but it can also steer you toward costly false conclusions.
When we suggest you should slow down ROI measurement, however, that doesn’t mean you should be sitting around waiting to measure and analyze. Instead…
B2B marketers should strive to measure fast AND slow.
The idea of measuring fast and slow is one that Peter Weinberg of the B2B Institute has explored, springboarding off the book “Thinking, Fast and Slow” by Nobel prize winner Daniel Kahneman.
The basic argument here is that humans (including marketers) are wired to find easy answers, which is why strategies are so often focused on superficial metrics like click-through rate as a guiding light. Was your campaign really a success, for example, if all it did was click-bait a bunch of people onto a landing page they abandoned immediately?
Even something as seemingly sophisticated as cost-per-lead can be a misleading indicator in isolation.
The fast-and-slow model doesn’t encourage you to stop measuring activities while they’re in progress, but to consider all metrics in proper context and place heavier weight on the truly telling ones, such as Revenue Per Lead.
As Weinberg admits, it’s more difficult to measure a complex metric like RPL. But it’s getting easier. As one example, Bizible – a LinkedIn Marketing Partner – has an API integration with LinkedIn that helps deliver powerful big-picture insights through advanced multi-touch attribution.
ROI is the destination, and measurement is the journey.
Callahan’s earlier book club metaphor is a fitting one. It’s helpful to think about Key Performance Indicators (KPIs) as chapters building toward a complete story. Use them to tweak and optimize your campaigns while in progress (so-called “vanity metrics” can actually be very useful for this purpose), and then wait until enough time has passed to accurately assess the full ROI once the book is fully written.
“Performance marketing” doesn’t live up to its name.
Considering that 95% of B2B buyers are not “in-market” at any given time, it doesn’t make sense to narrowly focus on direct sales impact to evaluate marketing campaigns. That’s why performance marketing, as traditionally defined, doesn’t tell us what we really want to know. It’s only providing information on that 5% of active buyers. (Spoiler alert: they won’t carry your business long-term.)
As Rachel Abbe of the B2B Institute explains, “investing in mental availability to make future sales is necessary to building a profitable brand.” So how do we measure that?
Abbe’s colleague Afiya Addison has laid out a number of truly meaningful brand metrics that link to financial performance, along with recommendations for measuring frequency:
Measure What Matters and Make Your Mark
In the many years since the marketing mix model was devised back in the mid-1900s, what hasn’t changed is that marketers (and their bosses) need to be able to understand what’s working and why so they can confidently invest, plan, and strategize for future business success.
What has changed is just about everything else: the nature of business transactions, the measurement tools at our disposal, and the visibility we have into buyers' journeys at a granular level.
At LinkedIn, we’re proud to be tapping into the cutting edge of B2B marketing analytics so content marketers and advertisers on the platform are able to understand and optimize performance like never before. Learn all about Reporting and Analytics on LinkedIn.
Topics: Measurement and ROI
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