The Fallacy of the Digital KPI

Date: 2019-11-18 14:19:28
By: Zimmerman Advertising
Date: 2019-11-18 14:19:28

As marketers, we love to see immediate success from our advertising campaigns. The fruits of our labor becoming a reality as we incessantly measure performance, the same way we constantly check the ticker symbol on our favorite stock. We want to know how our campaigns are doing right after launch, our success guided by tracking, measuring, and optimizing as we go.

Digital has long been championed as the channel that allows us to judge success most quickly. However, it is all too easy to fall into the trap of saying a campaign is successful because there is a 20% lower cost-per-click or 24% cheaper cost-per-store locator interaction.

But at the end of the day, what is your business really trying to achieve with advertising – a 24% higher CTR or a 24% increase in sales?

Don’t get me wrong – digital KPIs can help us understand vital information about our campaigns. They can inform optimization decisions as they relate to creative, audience, channel, and partner performance; all key levers marketers need to understand how to pull when crafting the optimal media mix. But when you use a singular KPI across all marketing efforts, you risk suffocating your campaign.

Digital algorithms need to be told what to optimize toward, whether it be specific conversions, impressions, reach, video views, etc. When you become too focused on a singular KPI, campaigns will become artificially constrained, driving up the cost of each impression. Ultimately, what may be best for your business’ bottom line are qualified impressions. Optimizing toward a KPI that is too low funnel may come at the expense of those eyeballs.

There are certain campaigns, especially in the e-commerce space, where digital KPIs are leading indicators of a campaign’s success, and looking at a return on ad spend or cost-per-order can provide valuable insights. On the other hand, in the world of brick-and-mortar sales, digital KPIs can often be misleading. What percentage of people are actually searching for a location on your website vs. using Google maps or Waze?

There are a number of advancements happening in the digital space where we can now tie offline sales to digital campaign exposure. While this type of advancement is certainly exciting, it is not perfect as there are a large number of factors that may lead someone to make a purchase outside of marketing efforts. Often, only a percentage of all in-store sales or visits can be tracked and optimized. These types of technological advancements are certainly exciting and important to consider while acknowledging their current limitations.

Campaigns are most effective when you get the right message to the right people, at the right time. Don’t let the pursuit of immediate media metrics overshadow the true measure of your advertising’s objective – sales and profitability. The quest for instant gratification makes it easy to lose sight of the big picture. In today’s digital landscape, successful brands are investing in quality design, effective content, authenticity, brand amplification, and clear communication. While KPIs have their place, this forward-looking investment has been shown to maximize conversions while minimizing drop-offs over time. It is through this marriage of sales and marketing data that businesses will thrive. Additionally, putting tools in place to allow for seamless integration of data, and creating an immersive experience, will propel retailers to success.

All too often, the flashiness of digital algorithms overshadows what your campaign is actually trying to achieve – driving your business’ bottom line. Don’t let the pursuit of the cheapest cost-per-store locator (or other digital KPI) prevent your marketing from achieving that goal.

Don’t be afraid to take your judge of success a few levels higher – you may find that ultimately the digital metric most closely tied to success could be website visitors, reach or even simply impressions. Allow your digital campaigns to breathe; utilize KPIs, but not at the expense of the big picture. KPIs have their essential place, but are not the ultimate measure of a campaign’s success. That ultimate measure has, and will always be, sales.