With a looming recession, marketing budgets will be scrutinised. The importance of effective measurement and data has never been greater
To succeed in a business landscape that is changing at an ever-greater pace, marketing as a discipline has become much more business-critical and complex. At CvE we believe that marketing should sit at the top of the board agenda as a company’s primary route to growth, and we enable companies to achieve that.
This is one of three 2023 Marketing Trends articles written by CvE’s marketing growth consultants. Don’t miss Robert Webster’s 2023 Top Predictions for the New Marketing Era and Retail Media Networks Trends for 2023.
Marketers Need to Adopt Broader Datasets to Accurately Deploy Zero Based Budgeting
In tough times, marketing budget is usually the first to face scrutiny, often resulting in budget cuts. This happens despite there being growing evidence that, dollar for dollar, pound for pound, marketing budgets work hardest during a recession due to lower media costs and competitors being less active with their own marketing, or even going out of business completely.
Of course, it is no use in having a bountiful tomorrow when you’re struggling to survive today. With this backdrop, most businesses want to know the lowest possible marketing budget that will deliver the commercial results that will allow the business to survive the recession. It is this thought that will bring an inevitable rise in Zero Based Budgeting (ZBB), a management approach that projects the incremental benefit of every dollar or pound invested, using $0 or £0 as a starting point to identify the optimal budget.
To successfully deploy ZBB, businesses need to be able to predict with accuracy the commercial impact of each additional $ or £ spent in marketing. This is not an easy task and is made even harder with privacy legislation and the death of the 3rd party cookie. Yet despite our digital marketing industry chatter, the ZBB challenge for 2023 is not primarily driven by the policy changes making the headlines.
Businesses will need to adopt a mixed measurement approach to best understand the incremental impact of marketing. This requires a big leap forward for the large volume of businesses that rely on basic attribution to quantify marketing contribution.
But the real challenge comes in forecasting marketing-driven results in an ever-changing world. Simply put, we use data from the past to predict the future. Marketers must ask themselves whether data from the past can accurately predict how marketing will perform in the shadow of Covid, global war, climate change, inflation and the long list of events that have brought the word permacrisis into our collective consciousness.
To forecast marketing and business performance in this environment takes a deeper and more thoughtful approach that seeks to understand how these many variables interact with each other in a complex ecosystem. Ultimately, this involves forecasting human behaviour. Brands that successfully deploy ZBB will need to take data from home and abroad on biggest factors that influence consumer shopping behaviour. This might involve the collection and analysis of economic data, consumer sentiment, political policy as well changes in culture and media consumption. Successful brands will need to become expert on using bigger data to isolate the contribution of marketing against this volatile consumer context.
As with war being the mother of invention, challenging times often results in innovation and improvement, and the pressures facing businesses in 2023 are no different. Whilst the reduced data availability in digital media is generally spoken about as a negative thing for marketers, it forces businesses to take a more mature approach that will result in a better understanding of marketing’s real impact in delivery of commercial targets.
The importance of data has never been greater. But instead of a data land grab, the real winners will be those that use data intelligently to ensure that all the drivers of consumer behaviour are accurately quantified. ZBB means that marketing should be seen as just one driver, amongst many others.
Aidan Mark, Global Director, Performance Strategy
Select the Right KPI’s for Each Campaign’s Purpose
Next on the agenda. ‘Attention’ the metric. What is it? A metric, a feeling, a trendy term to confuse both client, publisher, and brand partners? Many may agree that you can’t measure ‘attention’. Perhaps you can but what does it mean for your insights, and does it really make sense?
Think about mapping the correct KPIs for your always-on marketing and from a campaign perspective selecting the right ones for the campaign purpose. Some if not most are using the same metrics since 2009 with a pinch of salt…It’s time for a change and time to think differently about what your campaigns mean for your department within your business.
Jonathan Brown, Marketing Technology Consultant
Stop Grabbing Every Piece of Data You Can Possibly Collect and Start Leveraging the Insights Behind the Data
Let’s face it, we live in a world with a tremendous amount of data. At the end of 2021, Google estimated there was 44 zettabytes of data being collected and stored. We also see every type of data “accessory” business around it, from visualization tools to storage solutions, anything and everything about data is being sold as the next big thing.
One of the trends that I see developing is the idea that businesses and teams should stop grabbing every piece of data they can and start realizing that it is about the insights or analyses behind those data points that is key to unearthing real value in data. Collecting and visualizing the data via multiple dashboards is one thing, but true insight is a far bigger deal. As I have said many times to clients, “Data isn’t really important unless it is driving you toward growth or learnings”.
You need to begin with a sound insights or analytics strategy to try to develop the key data challenges facing your business or organization. This just can’t be a list of KPI’s for SaaS businesses or different types of things that others tell you are important. It needs to be a genuine approach by your entire organization to think about what really tells you what is driving your business. If it is just one key metric, then don’t worry about all the others…especially as you grow this analytics muscle within your organization. Focus on the 1 or 2 or 3 that are impacting your daily business. Just because Tableau or PowerBI or other tools are trying to get you to visualize and measure everything, resist the urge to do so. Instead, take a measured approach that allows you to understand the true KPI’s of YOUR business. Look into the “Attribution Playbook for Marketing Teams” as well.
The next key part of this process is to think scientifically about your data. I have written before on S.M.I.L.E. and it is incredibly valuable to most businesses. S.M.I.L.E. stands for “Scientific Method is Literally Everything”. Using the scientific method to develop hypotheses (both null and alternative) and then find data within your organization or outside that helps provide the basis of modeling to prove or disprove those hypotheses. Getting an organization to think this way is part of the data literacy talk going on across the data science landscape right now. You need to get everyone thinking about how data to inform, provide insights, and ultimately learnings that you can use to drive better customer engagements or sales. Aidan Mark discussed many of these ideas in his recent piece called “What is Marketing Effectiveness?”
Ultimately, you want to move the organization away from discussions around how and where data is stored or processed, to what is the data doing for us. You can’t run an ML model on garbage data. You can’t employ AI on garbage data. However, you can draw quick wins and insights from careful analyses via the scientific method and your existing data because part of the method is iteration. Continuing to test and iterate on findings.
Heading into 2023 will be an exciting time for analytics and data. But if you want to really get ahead within your organization, you need to develop a strong insights strategy to leverage all sorts of data to drive understanding and learnings specifically to your situation. You cannot wait on insights from Google Analytics or Facebook Insights. Those 3rd party data aggregators and collectors are out to tell you a story that you want to hear, not necessarily what your customers are saying and doing digitally. Go back to basics and develop a strategy around what you want to measure and why it is important to your business or organization. I’ve seen so many times where companies just want to plough forward and not think about what/why of data. Your entire organization will benefit from a sound analytics or insights strategy.
Dennis Still, Senior Consultant, Analytics Solutions & Insight Strategy
The Growth of AI in Adtech and its Limitation
This is an interesting topic. Many of us have been fearful that machines will take over our jobs. Westworld, iRobot and other films of that ilk paint a pretty picture of what the future looks like. Meanwhile in Adworld Excel documents are still being filled in manually which makes me think; when are things going to become easier?
Software providers within the Martech and Adtech space have introduced Machine Learning/Artificial Intelligence technology which has made getting to from A to B to Z very easier to a degree. However, in recent months the question of ‘How does technology get to the outcome’ has come into question. When image recognition technology thinks a gun is the same as a wooden spoon and serves a dynamically produced ad, most of us lose confidence! We have heard these sort of horror stories before and this is the reason why media teams are choosing to trust in themselves for approval, content production and execution more closely. This will stem the flow of mistakes that can occur in the future from AI technology.
I conclude, 2023 is going to provide great opportunities for all within the Adtech and Martech space. Time will determine which topics will take the lead, I feel that many companies are being proactive and putting measures in place for cookieless future. Those that are struggling will have to invest heavily to create harmony across all teams, technology and data attribution/governance. AI and Machine learning will provide further support with stronger human governance. Companies will look towards Brand response detail and move away from KPIs that can’t provide comprehensive insights.
Jonathan Brown, Marketing Technology Consultant
Conclusion
2023 will bring challenges as with an imminent economic crisis, there will be even more scrutiny on budgets and a close eye on ROI indicators. Challenging times often result in innovation and improvement, and the pressures facing businesses next year are no different. The importance of data has never been greater.
To stay ahead within your organization, marketers need to develop a strong insights strategy to leverage all sorts of data to drive understanding and learnings specifically to your situation. Brands must stop grabbing every piece of data they can and start realizing that it is about the insights or analyses behind those data points that is key to unearthing real value in data.
Select the right KPIs for each campaign’s purpose. Some brands are still using the same metrics since 2009. It’s time for a change and time to think differently about what your campaigns mean for your department within your business.
AI and Machine learning will provide further support with stronger human governance. Companies must continue to be proactive and put measures in place for cookieless future.
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