Marketers typically rely on digital marketing metrics such as CPA, CPM, and CPC to measure digital advertising performance. However, these measurements tend to mask the bigger picture, leaving them without a clear path to increased campaign effectiveness or maximised ROI.
By focusing on these traditional metrics, marketers are missing out on a whole host of other factors which could help to improve margins, streamline efforts, or simply provide greater impact. This approach leads to brands hitting a ‘performance ceiling’ when it comes to their digital marketing. So what is a performance ceiling and how can marketers break through it?
What is a performance ceiling?
A performance ceiling is created by the structure, setup and management of ad accounts and a poor setup means a lower ceiling. In order to raise a performance ceiling, brands or agencies need to enhance the effectiveness of their marketing campaigns, optimising it as far as the budget will allow.
Brands hit a performance ceiling because of problems in how campaign success is evaluated. A setup that involves click vs. spend metrics such as CPM or CTR is easy to measure and can reveal interesting anomalies and trends across campaigns. But fixation on these numbers causes brands to focus on efficiency, rather than effectiveness, so they don’t seek better ways of deriving value from their marketing budgets.
These metrics simply do not provide enough detail about the trajectory of a marketing campaign, such as which factors are affecting it, or why spending is increasing or decreasing. Therefore, they offer no meaningful insight, and budgets are spent long before marketers can plan how they should be.
Beyond the glass ceiling of traditional metrics
Marketers need to move beyond this traditional-metric mindset to make the most of their digital media budgets. By looking at campaign structure, ad creative, and audience demographics, as well as using a broader range of metrics, they can improve the setup of ad accounts while consequently building a more layered and holistic view of their campaigns, raising performance ceiling in the process. This will enable them to understand the performance scores needed to inform their decision-making well before they make an investment.
Since customer needs and behaviours can change rapidly, knowing how a campaign performed months ago is not always useful – marketers need to know what’s happening right now. Therefore, they need to be able to access live data, building a real-time view of campaigns, their performance, and any opportunities for improvement.
Using an approach based on campaign effectiveness, rather than merely efficiency, brands can start to measure real impact, improve best practices, and have the confidence to build more strategic media plans going forward.
Raising the ceiling to transform marketing performance
Measuring the true performance of digital marketing involves shifting focus to different types of KPIs: from efficiency and media exposure, to outcomes and measurement quality. For instance, ROI, CLV, and brand safety serve marketers far better than CPM, frequency, and viewable impressions.
Ad platforms and media owners have an incentive to increase spend, rather than make budgets work harder, so their recommendations may not be in a brand’s best interests. Using an agency also has its flaws, since they cannot always determine their own effectiveness, let alone the impact of Google, Facebook, etc. Typical issues are poor allocation of keyword match type, wasteful bidding strategies, and ineffective audience targeting. An Independent, objective, analysis is needed.
Crucially, brands should prioritise brand equity over financial saving. It’s important to bear in mind, though, that a brand’s agency should take just as much responsibility for this as the brand itself. After all, it’s their job to deliver the best results possible, through quality ad creatives and messaging, and through building meaningful engagement with audiences. And if they’re not delivering, brands should not be afraid to hold them to account and adjust their strategy as necessary before investing in future campaigns. Only by working together throughout the media buying journey can brands, agencies, and partners ensure they are driving the best possible digital media campaigns.
Ultimately, brands want to maximise their campaign effectiveness while minimising their spend. To achieve this, they must raise their performance ceiling to its highest level. But for this to happen, they must first look beyond efficiency and exposure metrics, and embrace a more holistic approach focused on customer understanding, inspiring experiences, and effective messaging. Only then can brands break through their performance ceiling and achieve their full potential.