Retailers and brands use the wrong KPIs to make digital and social purchases – RetailWire

May 28, 2021

The ‘most used’ KPIs (key performance indicators) for digital and social media investments are generally not the ‘most important’, according to one investigation of American traders by the Association of National Advertisers (ANA).

Thirty-nine key performance indicators divided into six categories (audience measurement, effectiveness, exposure counting, quality of measurement, result, other) were identified in a survey of 93 marketing professionals in January and February.

The five most used KPIs were:

  • CPM (cost per thousand)
  • CPC (cost per click or interaction)
  • Single scope
  • ROI / ROAS (result versus marketing investment) according to expenses or increase
  • Site visits

The five most important KPIs were determined to be:

  • ROI / ROAS (result versus marketing investment) according to expenses or increase
  • Exposed ROAS (expense and increase, using only valid measured exposures as a basis)
  • Brand Security Ketrics
  • Customer lifetime value
  • Conversion

The “Multimedia key performance indicators that matterThe study found that the most used KPIs are mainly efficiency indicators (CPM, CPC) and exposure counting (single audience). ANA said, “This suggests that the most used media KPIs are primarily focused on the top of the marketing funnel, favoring the measurement of ‘stimulus’ rather than the measurement of ‘response’.”

The most important KPIs are based on the results and the quality of the measurement. ANA said, “This suggests that media management today is directly responsible for business results and that the quality of media exposure is more important than the amount of media exposure in driving results. “

ANA rated the results as “very encouraging” despite the fact that the most popular metrics are used less.

The most widely used KPIs include many metrics that have long been industry staples, can be built from available data, apply to a wide variety of campaigns and goals, and are relevant for almost all situations. Highest value KPIs focus on outcome measures that provide readings in more effective and impactful campaigns.

“There is apparently a demand for quality metrics (eg brand safety, customer lifetime value) that are seen as important, but not widely used,” said Scott McDonald, president of ARF in a statement. “In the meantime, everyone is content with exposure KPIs that are available, but perceived as less desirable (reach, site visits, impressions, visible impressions, etc.). It would appear that there are opportunities for companies that can fill this gap. “

DISCUSSION QUESTIONS: Do you agree that there often seems to be a mismatch between the KPIs that retailers and brands use for digital and social media and their actual effectiveness? What do you think are the most and least effective KPIs used to make purchasing decisions on digital and social media?

Braintrust

“This is the digital manifestation of an age-old disconnect between the way brands and media agencies / companies perceive the role of advertising.”

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