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Business KPIs and modern marketing: 5 Things to know


The Chief Finance & marketing officers (CFO & CMO) always had a good understanding in the days when marketing analytics were absent and advertising spending was less measurable.


Fast forward to the business environment we’re in today, and things look a lot different – thankfully so, for anyone keeping track of key performance indicators. In modern marketing, we face a set of new rules, many of which will become apparent as you consider these trends:

The Facebook / Google Duopoly is ever-present

Most businesses spend around 80% of their marketing budget online. Except for Russia and China, where the state opposes US control of their internal markets, most other countries have Facebook (FB.0) and Google (GOOGL.O), which together take around 60% of the advertising spend. What is bad about this, is that no longer can we spend money on local publishers (newspapers, etc.) to keep money from flowing out.
What is rather exciting though is that visitors from these sites are increasingly more measurable: not from our ad spend, but through analytic tools that will show the CMO & CFO exactly how revenues can be attributed. It also means that smaller businesses do not need training in a range of competing ad platforms – since understanding Facebook Ads & Google Adwords, would probably be more than enough for the average business.

Attribution modeling is on the rise, improving your analytic ability

Many of us know how to use tools like Google Analytics to track the source of our visitors. But more recently, attribution modeling made great strides – and now, we can track the precise path that individuals and cohorts of users followed prior to buying from our business. It takes the guesswork out of the equation when a CMO seeks to propose a new marketing plan – and helps the CFO say “Yes” I’m on board with a particular budget… or to decline politely based on data insights.

Facebook likes are no longer an indication of brand strength

Today, no company invests in “Facebook Likes” since the company now allows competitors to market directly to a brands’ followers – and charges a brand to market to its own Facebook followers. Therefore, the growth of silent but powerful elements such as the size of an email list, is a resurgent theme, as opposed to the size of a social following.

Loss of control is a good sign and a visible metric

If you now turn on business analytics and notice a range of new referrals from social channels where the brand did not engage in any efforts or email referrals to pages you never promoted to your own clients – it means that your business is well embraced by consumers for different reasons: it is manifested through the consumer to consumer (C2C) marketing which is supposed to spread in an uncontrolled way.

Regulators are becoming aware of inventory quality

Remember many years ago when the leaf letter went around the neighborhood and distributed 1000 leaflets, then they’ve put 5000 in the bin to take the day off? We faced a similar situation when we moved to pay-per-click (PPC) marketing: Businesses would pay for 2000 clicks, but only 1000 visitors seemed genuine whilst the rest produced an excessive bounce rate.
Well, today the federal trade commission (FTC) in the US, as well as the European Commission (EU), are aware of it – and so are many other governments around the world. Bankcard providers are also aware of this as many businesses initiate charge-backs against invalid inventory. A new KPI any business should measure is “ad validity” or “inventory quality ratios”.
Thanks to increased pressure from regulators and industry bodies, you can now take on ad networks, present them with analytic proof of ad validity, and in most cases receive a substantial adjustment to your business account.

Conclusion

The business world faces disruption with artificial intelligence but also incredible opportunities. Marketing automation is just one of those areas where things are moving fast and opportunities are vast. Redefining your KPI’s in view of trends in modern marketing is perhaps something to think of soon.
Ghostwriter of the article. Published in thesouthafrican.com. [Text altered]. 
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