Bain & Company, the global management consultancy, released a new report suggesting that deliberate, well-conceived measurement practices and enhanced measurement capabilities provide a significant boost to businesses. The report noted that the modern marketer faces a diverse array of challenges, both internally in the form of rising performance expectations from the C-suite and externally, with privacy regulations and dynamic rules of engagement. Proactive measurement allows companies to form a clearer picture of their customers, which in turn allows them to tailor messages and campaigns that will be perceived as relevant and useful, rather than intrusive.
Conceivably, the corporate world’s ability to follow through on that goal, with the right technologies and tone, will influence the privacy debate and the data regulations that are formed in consideration of the public. But for marketers working through their daily grind and operating within the context of a few weeks, public relations and policy are simply not as relevant as actual business results. Here, proactive measurement also confers an advantage.
In their published analysis, the Bain & Company authors ranked the extent to which companies integrate measurement into their growth strategies on a maturity curve. They concluded, “Companies at the highest level of measurement maturity outperform others in attaining their business goals.” Specifically, they found that “marketers on average could realize 25 percent to 30 percent higher revenue over the first year for each dollar spent on advanced measurement capabilities that inform bidding and automation strategies.”
If it’s true that the most mature companies are four times as likely to grow revenue and market share and exceed goals, as Bain’s analysis indicates, why would companies ever deviate from this approach?
Wendy Grad, an expert vice president in Bain’s San Francisco offices and co-author of the report, said that some marketing organizations rely on their gut instincts and they budget annually. But she added that very few organizations are completely refraining from engaging in measurement activities.
“They’re probably measuring in silos, they might be optimizing in silos, and so it’s very rare we don’t see any measurement at all,” she said.
The measurement advantage happens when business leaders think more deliberately about measurement across multiple channels and across the customer journey. Given the vast quantity and diversity of digital touchpoints, it isn’t always easy to see what is happening with a customer.
“If anything, maybe people have too much data and they’re not actually sure how to make sense of it or how to synthesize it,” said Grad.
John Grudnowski, a co-author of the report, and whose company was acquired by Bain, said, “I would echo that complexity is a major issue for most clients, whether it be complexity in too much data or just legacy structures.”
Many marketing organizations are trying to move away from metrics related to audience reach and frequency and they are putting their focus on meaningful business results instead. Grudnowski said that business results should act as a “source of truth across the organization” and measurement activities should be aligned with that truth. This truth transcends arbitrary and outdated media metrics.
But it’s not just about measuring. It’s about timing.
The report states, “In fact, the marketing leaders in our analysis are nearly 2.5X as likely as laggards to use automation to manage bids and budgeting across more than one channel in real time.”
Bain & Company aims to help its clients transform and scale by embracing measurement, testing and learning. This gives businesses an iterative ability to drive demonstrable results within a tight timeframe.
Businesses also need to think and work beyond their silos. In previous decades, technology teams and marketing teams were detached; a far cry from the lively marketing tech scene with which DMN readers are acquainted.
Grudnowski explained, “Organizations that are not digital natives had already built-in complexity based on the fact that over the last couple of decades, they’ve been bolting on different skill-sets to their teams to kind of keep up with technology. And that system created a significant amount of overlap and lack of clarity on who’s leading the charge and what single decision should be made, which is why I think those companies still operate in silos.”
Although better measurement and better results often come from the adoption of powerful marketing technology, people matter, too. Bain’s report noted that a tactical shift in an organization’s practices can help turn all that analysis into action.
