A Guide To Unified Marketing Measurement

We are witnessing a period where the marketing industry is going through some seismic shifts with new consumer-focused privacy technologies and changing rules, which limits data tracking and usage. Traditional attribution models are losing accuracy due to signal loss. Furthermore, the complexity and opacity of the digital ecosystem have contributed to fraud and mistrust, with various "black boxes" that hinder transparency.

Yet, 41% of marketers still use the last-touch attribution model for online channels, which can misrepresent the true efficacy of the entire marketing journey. Even more telling is that 64% of businesses lack the quantitative tools necessary for demonstrating the impact of their marketing spend on company performance.

To combat these challenges, brands and marketers must adopt a unified marketing measurement approach that paints a holistic picture of their marketing efforts.

What is unified marketing measurement?

A unified marketing measurement approach refers to the use of multiple measurement methodologies to measure your marketing effectiveness. In the absence of a single source of truth, a unified approach combines both deterministic and probabilistic measurement methodologies to triangulate the truth.

This can include methods like surveys, marketing mix modeling (MMM), incrementality testing, last-click attribution, or multi-touch attribution (MTA). While methods like surveys and last-click attribution have historically provided valuable insights, newer, more advanced techniques offer enhanced accuracy and a better understanding of measurement data.

What is triangulation in marketing measurement?

In marketing measurement, triangulation refers to the practice of using any three measurement methodologies to provide a more complete picture that gets closer to the "truth." The “truth” here refers to measuring the true effectiveness of your marketing.

It includes the use of marketing mix modeling, multi-touch attribution, and incrementality testing to triangulate the truth of marketing effectiveness. With this integration, marketers can see the direct as well as indirect impacts of their campaigns, follow customers through all of their interactions, and make smart decisions based on both short-term actions and long-term strategy planning.

This allows the decision-makers (CMOs, CFOs, etc) to not only measure but also predict how their marketing strategies will impact their main business goals with UMM.

The below image illustrates how we approach triangulation in marketing

If you want to listen to a few experts talking about this triangulation approach then here's a podcast by the Google marketing platform on how attribution, experiments, and MMM are the future of media effectiveness measurement.

The three core pillars of unified marketing measurement

The three pillars of unified marketing measurement (UMM) are essential components that together provide a holistic view of marketing effectiveness. Let's examine each of these in detail.

1) Marketing mix modeling (MMM): The strategic component

MMM involves building statistical models that capture the sales relationship to marketing spending to determine how different marketing mix elements contribute to sales volume.

This methodology uses regression analysis to quantify the incremental impact of different marketing mix variables while controlling for various internal (advertising, promotions, etc.) and external factors (seasonality, competition, etc.).

Marketers should use MMM to set overarching goals for various marketing channels. Also, the decision-making at this stage must be based on strategic KPIs, which include incremental KPIs like incremental ROAS/CPA.

These metrics provide insights into the overall effectiveness of marketing channels and strategies, ensuring that spend and effort are aligned with business objectives.

2) Universal attribution (UA): The operational component

Universal attribution transcends traditional customer journey assessments by integrating signal-based and aggregate methodologies, offering a panoramic view of marketing performance.

Typically, it merges the granular insights of Multi-Touch Attribution (MTA) with the macro-level analysis of Marketing Mix Modeling (MMM). This dual approach ensures every customer interaction, from digital engagements to offline experiences, is accounted for, to deliver actionable insights.

While using universal attribution marketers focus shifts to the day-to-day optimization of marketing efforts. Here's how universal attribution aids marketers in the decision-making process:

• Campaigns: At this level, campaigns are designed and executed to achieve the strategic objectives set at the channel level. Decisions about campaigns are typically based on a mix of strategic KPIs (from the MMM) and more immediate performance metrics.

• Ad Groups: Within each campaign, there are ad groups that contain sets of ads targeted to more segmented audiences or thematic groupings within the campaign's broader target. Decisions at the ad group level focus on performance metrics that are more immediate and specific than at the campaign level.

• Ads/Creatives: At the most granular operational level, individual ads or creatives are evaluated. Here, decision-making is based on direct performance metrics such as conversions, Return On Ad Spend (ROAS), Cost Per Acquisition (CPA), and the lift (incrementality) that each ad or creative contributes. These metrics allow for tactical adjustments to optimize the performance of individual ads.

3) Incrementality testing: The validating component

Within the UMM framework, incrementality testing is designed to measure the additional value generated by specific marketing activities, beyond what would have occurred without those activities. This approach helps marketers identify the true effectiveness of their campaigns by isolating and evaluating the incremental impact of marketing spend on consumer behavior and sales outcomes.

The essence of incrementality testing lies in its ability to address a fundamental question: “Did this marketing activity drive additional outcomes that wouldn't have happened otherwise?"

It plays a crucial role across both levels, validating the assumptions made based on MMM and UA insights. It ensures that decisions are not just data-informed but also incrementally effective, adding real value to the business.

The value of geo experiments and causal inference in measuring marketing effectiveness

Geo experiments are a powerful method for conducting incrementality testing, where different geographic areas are exposed to different marketing treatments (or a control group with no treatment) to measure the differential impact.

This approach is particularly valuable for large-scale campaigns where marketers seek to understand the broader, aggregate effect of marketing efforts across different regions. By comparing performance metrics such as sales or conversion rates between the test and control groups, marketers can directly attribute differences to the marketing intervention, accounting for regional variations in consumer behavior.

On the other hand, causal inference takes incrementality testing a step further by applying statistical methods to infer the cause-and-effect relationships between marketing activities and outcomes. It moves beyond mere correlation, enabling marketers to establish a deeper understanding of how specific actions influence consumer decisions.

Causal inference techniques, such as counterfactual reasoning and structural equation modeling, help in isolating the effect of individual marketing tactics, and controlling for external factors that might also affect the outcomes.

This comprehensive approach not only quantifies the direct impact of marketing activities but also illuminates the pathways through which these activities influence consumer behavior, guiding strategic decisions and optimizing marketing performance for sustained growth.

3 ways to leverage unified marketing measurement to increase your brand's profit

Unified Marketing Measurement (UMM) stands as a cornerstone in modern marketing, offering actionable insights that drive strategic decisions and enhance profitability. Here's how UMM transforms key marketing activities:

1) Scenario planning and forecasting

UMM infuses scenario planning and forecasting with precision, enabling marketers to craft robust strategies based on predictive analytics and incrementality. This capability allows for nimble adaptation to market dynamics, ensuring that marketing efforts are not only responsive but also proactive.

The foresight gained through UMM facilitates efficient campaign planning, minimizes risk by preempting market shifts, and optimizes resource allocation to capture emerging opportunities.

2) Budget and campaign optimization

At the heart of UMM's value proposition is its ability to refine budget allocation and campaign strategies with a focus on incremental gains. This optimization process is rooted in a deep analysis of data across all marketing channels, ensuring that investments are directed towards efforts with the highest return.

The outcome is a streamlined marketing spend that maximizes incremental revenue and boosts return on ad spend (ROAS), translating into a more efficient and effective marketing operation.

3) Marketing impact assessment

UMM transcends traditional metrics, providing a clear view of marketing's contribution to key business objectives. This analytical approach dispenses with superficial metrics in favor of deep insights that quantify the genuine influence of marketing activities on revenue growth and customer engagement.

By doing so, UMM empowers marketers to eliminate waste by discontinuing underperforming channels and doubling down on strategies proven to yield tangible results. The result is a marketing strategy backed by empirical evidence, capable of demonstrating ROI with unparalleled clarity.

Tips for Transitioning into a Unified Measurement Approach

For marketers looking to adopt or transition to a unified measurement approach, here are some actionable tips:

• Start Small: Begin by integrating two methodologies, such as MTA and incrementality testing, before gradually adding others into the mix. This phased approach helps in managing complexity.
• Prioritize Data Integrity: Ensure that your data collection, storage, and processing practices are robust, compliant with regulations, and capable of supporting integrated analyses.
• Leverage Technology: Utilize advanced analytics platforms that can handle multiple measurement methodologies and offer integrated insights.
• Cultivate Expertise: Invest in training for your team or collaborate with external experts who can navigate the complexities of a unified measurement framework.

The path ahead

By leveraging UMM, businesses can optimize cross-channel performance, unlock deeper customer insights for superior personalization, make agile decisions with real-time data, and conduct a comprehensive analysis of the entire marketing funnel. The result is a more strategic allocation of marketing spend, improved ROI, and ultimately, a stronger connection with customers.

Book a demo with us today and discover how Lifesight can transform your marketing strategies, optimize your performance across channels, and help you make decisions with confidence.