Old-school marketing metric is making a comeback
As LL Cool J would say, “Don't call it a comeback, I been here for years.” We’ll pause here for any readers who are compelled to play “Mama Said Knock You Out.”... And, welcome back.
But just as old school hip hop will never go out of style, neither will fundamental advertising metrics.And the retro stat that is making a resurgence is marketing effectiveness ratio.
As Digiday recently outlined, MER is more holistic look at ad spend that goes beyond the more modern Return on Ad Spend or ROAS that contemporary marketers are more accustomed to.“It’s a metric agencies used for decades, prior to the digital advertising boom when marketers had to account for everything from television ads to media placements. Instead of looking at the immediate revenue an individual campaign drummed up, the industry is taking a second look at marketing efforts over time and what that means for their ad dollars, both now and in the future,” Digiday writes.
Basically what it does it takes the very detailed and timely look that digital marketers are used to and zooms out and extends the timeline.Dan LeBlanc, CEO and co-founder of e-commerce analytics and data company Daasity, summarizes it in more direct terms later in the article.“What you do is basically take all your spend, look at how much revenue you’re getting from all your spend. So you’re not doing it at that very detailed digital level. You’re doing it in bulk.”So why should your campaign consider this vintage analysis when evaluating performance? Because extremely granular data often doesn’t tell the entire story.Customer touchpoints, actions, and attribution methods are increasingly complex. Just as a film or TV show cannot tell a story with a single character, supporting characters are needed to extract a complete narrative full of context and nuance.While hard conversion metrics such as CPA and ROAS do a fine job of illustrating immediate returns across a very limited window, real ad return is better conveyed with MER as it doesn’t disregard things such as brand awareness, lifetime value, and customer retention.
And recent tracking changes only make a revival of MER all that more relevant. Campaigns are becoming more and more intricate and diversified to better drive performance. And in this new digital marketing era, properly attributing an entire campaign in aggregate has become more and more important.