Marketing’s measurement moment
The game has changed, but opportunity awaits
“This is marketing’s moment - as a team and as a function, to harness AI and become champions and leaders in this space.”
Sarah Byrne, director of sales for agency, UKI, Google
Google’s largest UK Measurement & Effectiveness Summit in London took marketers, agencies and partners on a journey into the world of future-ready, AI-led measurement. With an exclusive press pass to attend, The Drum recaps the learnings for marketers to embrace this moment, accelerate their journey to success, and unlock growth.
Marketing starts and ends with the consumer. With that, it has a unique opportunity to be the ‘unifier’ within organizations, to ensure connectivity between brands and consumers, people and partners, channels and conversions. It is the gateway to the tools and strategies that help to not only drive immediate marketing wins, but also long-term business success.
But it’s not easy being a marketer. McKinsey research shows that only half of CEOs see marketing as a top growth driver. This puts immense pressure on CMOs and practitioners to drive outcomes for their business, to prove the value of marketing to the wider business, to be seen as a profit center and not a cost center, to build brands and drive growth - in a time of complex consumer behavior in a shifting, privacy-centric media landscape.
Digital marketing is at an inflection point. The work marketers do is being fundamentally remade by two significant changes: the rapid acceleration of artificial intelligence (AI) and the growth opportunity it creates, and the planned departure of third-party cookies. With these transformational shifts happening, the core role of marketing hasn’t changed, but the way marketers do it has.
Those who remember the shift to digital advertising, and then the shift to mobile, will also recall that each time, those who got ahead, often stayed ahead. Things are now shifting very quickly into sixth gear as AI becomes a catalyst for change; there’s not a single area of marketing it’s not going to reach, from brand to creative to measurement.
To meet this moment, marketers must figure out how to best leverage AI to drive growth and create opportunities for efficiency. And we know it’s possible. Against the backdrop of various commercial applications, a recent McKinsey study shows that marketing and sales will benefit disproportionately from AI adoption versus other functions - both in terms of cost decrease and revenue increase.
When 89% of marketing decision-makers say they feel more need to demonstrate the ROI on marketing investments, the opportunity is clear: those who seize the moment and act now, by shaping their strategies around future-facing measurement solutions, will be the ones to ignite growth.
“This is marketing’s moment - as a team and as a function, to harness AI and become champions and leaders in this space,” says Sarah Byrne, director of sales for agency, UKI, Google. Scroll on to find out how.
The new power couple: Marketers + AI
It’s no secret that the industry is already moving away from third-party cookies, a method that marketers have relied on for decades to reach consumers and measure results. This major milestone makes it all the more important to build and strengthen ways to capture and use consented first-party data to keep up with harder to reach audiences.
The customer journey is increasingly fragmented and convoluted; the average customer switching from web to app five times in one journey. This increased complexity is more evident than ever - with today’s choice of channels, devices and formats creating more touchpoints, in turn, creating more work for marketers in optimizing the path to purchase.
Not only do you have to figure out where your customer is going to be and how best to reach them, you also have to meet their increasing expectations for more relevant, personalized experiences. 66% of consumers consider it important to have a personalized experience with a brand. To keep and win those customers, marketers need to forge new relationships with them - relationships which are built on trust and a true value exchange.
Under immense pressure to both engage audiences and drive outcomes, now is the time to reframe marketing from a cost center to a profit center, by figuring out how to best leverage AI to boost efficiencies in combination with the knowledge only marketers’ possess. According to a Google study with BCG, the combination of AI plus the skills and experience brought by people delivers a 15% increase in potential performance, versus AI on its own.
“It’s not AI versus humans, but with humans,” says Dyana Najdi, managing director partners and specialists UKI, Google. “AI is the enabler to help you transform and grow businesses and realize the value from your marketing investments. But despite all of the incredible power that AI can drive, AI is not a marketer. AI is the enabler that will support you, the marketer.”
Automating some lower value activities not only frees up time for marketers to spend on the strategy and application of insights that will be more meaningful to driving growth, but allows for more flexible budget allocation towards user demand, and the ability to find customers via signals that allows the systems to find similar users. Advertisers using Performance Max, for example, which optimizes audience signals, creative assets and first-party data feeds for the best performance across all of Google’s ad inventory, including Search and YouTube, get an average of 18% more conversions at a similar cost per action.
This power combination of people and AI working together will be a key driver for future-ready measurement, at the same time elevating the credibility of marketing in the boardroom. But that can only be achieved if marketers are ready to act now through a culture of testing, learning and scaling within their business.
“AI is the enabler to help you transform and grow businesses and realize the value from your marketing investments.”
Dyana Najdi, managing director partners and specialists UKI, Google
of marketing decision-makers feel more need to demonstrate the ROI on marketing investments
of marketers are overwhelmed by the amount of data, measurement and analytics solutions available
1. Brilliant basics: fueling AI with data
The effectiveness of marketing dollars begins and ends with data, measurement and analytics. After all, marketers can’t manage what they can’t capture, prove and measure. That’s the foundation for AI-powered advertising success, and why it’s essential to ensure the AI models are fueled with unique insights that will deliver the competitive advantage.
In a world of increasing regulation, privacy concerns and browser changes, it’s important to note that marketers aren’t losing any capabilities; rather, technology is unlocking new abilities to be able to measure with more precision.
A study from Google and BCG found that 90% of marketers agree that first-party data is incredibly important in their digital marketing - yet only 30% feel they are truly collecting and integrating this data across channels. With AI, marketers can multiply expertise and deliver results. But AI is only as good as the data it's given. Higher quality inputs equal better outputs, which means training AI on the signals that matter most to your business.
The first step is to capture durable signals in a smart and responsible way and then assign the values that best reflect your business goals - to define how much each conversion is worth and then be able to connect the dots across web, app and store sales. The guiding principle here is to import the value which is closest to your ultimate business goal, but that still meets all the data quality criteria.
“Getting the brilliant basics right is important - better targeting, better measurement, speeding up the whole process [and leading to] decreased waste,” says Richard Wheaton, managing director, fifty-five UK. “You need to really understand how data is operating with platforms and apps, working with media partners to consistently adhere to best practices. Based on that, you’ll be able to build robust results.”
“Getting the brilliant basics right is important - better targeting, better measurement, speeding up the whole process (and leading to) decreased waste.”
Richard Wheaton, managing director, fifty-five UK
2. Measurement mix: proving value
With a strong durable foundation in place, the next step is to prove value - finding a way to clearly demonstrate ROI, make better decisions and set up for long term success.
“It’s no longer acceptable to have assumptions. [We need] proof that investment is driving growth and not being a cost center,” says Dimi Mittev, measurement specialist at Google.
But be warned: “celebrating metrics that look good on screen but don’t mirror business outcomes is a dangerous game to play,” says Rachael Green, finance business partner, ASDA. “ROAS is only half the story - an indication of campaign efficiency but not a multipler for revenue.” The key, she says, is to establish trust around a golden metric: “not all metrics are the right metrics that give you all the answers''. It’s important to be transparent, introduce a better way of business planning and find a sustainable way to establish business growth.
With increased scrutiny from stakeholders to justify value, what helps is the ability to translate metrics that matter for short-term and long-term impact. Understanding the how behind the what, through collaboration with partners, requires a robust, harmonized measurement framework to connect everything. “As our evaluation needs change, our measurement evolves, enabling more empowered conversations,” says Vanisha Vaghela, media lead, Vodafone.
We’re in an age of accountability, and while there is no silver bullet for all businesses, the key is to remove guesswork for making media decisions. Two particular techniques are increasingly being used together to corroborate marketing impact: incrementality studies and marketing mix models (MMM).
Modernizing MMMs
“Marketing mix modeling is at the next wave of renaissance,” says Aleksandra Algina, MMM lead at Google. Impressions don’t tell the full story, while MMMs are durable, holistic and incremental. They can provide accurate and granular data across the funnel, innovative modeling methodology, actionable insights beyond impressions, optimization and calibrated measurement.
With the launch of Google’s open source, fully transparent MMM solution Meridian, methodology innovations have helped make MMMs more accurate, actionable and analytically rigorous - including calibration with incrementality experiments, reach and frequency incorporation to link outcomes with planning, and guidance on measuring search.
As one of the early adopters of Meridian’s open source technology, Tom Evans, head of data science at ASOS, says it allows “more holistic, strategic decision-making from a budget perspective” which “a lot of media measurement available today doesn’t support”. This means that the brand can look at its entire media mix and move budget across channels - including investments in upper funnel activity which has traditionally been more difficult to measure.
Advertisers that ran at least 15 incrementality test experiments in a given year saw a 30% higher ad performance that year
Brands and modelers that partner with Google on best practices over time see a +108% growth in ROAS
Agile marketers are 25% more likely to report stronger performance compared to their industry competitors...
and 45% more likely to exceed internal expectations…
but only 10% of marketers, agencies and partners are practicing that in reality.
3. Agile advantage: driving growth
In this rapidly evolving ecosystem with fast changing consumer behavior, the final piece of the measurement puzzle is accelerating a competitive business advantage with marketing agility.
“All the work that you put into fueling AI with data and proving value is futile if you’re not flexing your marketing to drive growth,” says Biren Kalaria, managing director, data, measurement and analytics, Google. “Agility is essential for the change we’re embarking on.”
Measurement is a journey; one that requires constant testing and iterating to be able to move the top and bottom line. It might be unrealistic to have a source of truth for data these days - marketers just need some triangulation in the right direction.
But without all the right stakeholders on board, the train is not going to move. That’s why alignment across the business around the measurement strategy is important.
“You cannot solve the measurement challenge alone. That will not revolutionize the way your business approaches marketing,” says Nadia Sotiropoulou, head of marketing and product analytics, Carwow. “Don’t expect it to happen overnight. Expect to have to make decisions along the journey, and be prepared to pivot, carve out time, focus and attention from teams.”
The checklist for modern measurement
1
Set a universal, meaningful and actionable KPI framework around business and customer outcomes that allows for alignment across teams
2
Select your methods, using multiple tools as your GPS to triangulate growth drivers. Testing delivers ground truths to make decisions to help drive growth
3
Devise an annual test and learn plan that allows everyone to be able to schedule their priorities around the objectives, with the opportunity to feedback
4
Adopt a scientific mindset. Testing is a continuous cycle so it’s key to always be testing. Be open to failures along the way and learn from them to adapt, evolve and activate
5
Create a culture that fosters space and time for innovation and collaboration between marketing, agency partners plus legal, finance and tech stakeholders
Embracing the new future
Being future-ready is not just about using data and measurement to surface what’s happening now, but to use it as a capability to project and predict. Looking ahead to what’s next, Paul Stringer, managing editor, research and advisory, WARC sees huge potential for synthetic data, which is modeled on human data and real world observations, but generated artificially by computers: “It has interesting advantages over real world data, can be generated at low cost, can be privacy safe if used in the right way, and can speed up the marketing research process.”
“There’s a tendency in our industry to treat numbers and data as an objective truth,” he says. “While it’s true that data is useful for challenging our preconceptions about the world, it also comes with its own limitations and biases that we need to be aware of if we want to make smarter, and better informed decisions. Measurement is a fantastic tool for calibrating human-decision making, but we mustn't forget the human in that process.”
He spoke of three key areas to consider as we look to the future of measurement:
- Credibility: Ensuring the responsible use of AI - transparency around the understanding of these tools, clear ethical frameworks and standards, and explainability.
- Quality: Marketing is moving towards a multifaceted definition. Marketers need to get comfortable with balancing a range of objectives, not just driving profitable growth but thinking about the societal and environmental impact.
- Experimentation: Focus on building first-party data, partnerships and getting comfortable experimenting. There’s no silver bullet and no one size fits all. This requires a culture of curiosity, with support from agency partners, to figure out what works best.
“Measurement is a fantastic tool for calibrating human-decision making, but we mustn’t forget the human in that process.”
Paul Stringer, managing editor, research and advisory, WARC
Get ready to meet this moment
“The future of marketing belongs to those who embrace the powerful combination of capturing durable signals, proving value and driving growth.”
Biren Kalaria, managing director, data, measurement and analytics, Google
Despite all of the incredible power that AI can deliver, it’s worth remembering: AI is an enabler - not a marketer. “Your understanding of people - and how to connect with them - is going to be key to putting AI to work for you,” says Google’s Najdi. “For some it will be improving reach and ROI on media spend, for others it will be delivering cutting edge creative, but those who are embracing AI, creating a culture of testing, learning and scaling will be the ones to get ahead.”
Data and measurement lays the foundation of all AI powered advertising. Now is the time for marketing to put itself front and center and accelerate the journey to business growth by focusing on three key areas critical to success in an AI-powered advertising ecosystem:
- Fueling AI with data: by collecting consented, durable, high quality data to build sustainable competitive advantage over time
- Proving value: by building a holistic view of media effectiveness with a mix of measurement strategies ike incrementality, attribution and media mix models, to understand its contribution to sales or profits
- Driving growth: with budget agility to capture all available demand, with actionable insights and tools that maximize AI-powered solutions.
“Whilst all this change is exciting, it can be uncomfortable - it feels like having to change the engines of an airplane when it’s still in flight,” says Kalaria. “The future of marketing belongs to those who embrace the powerful combination of capturing durable signals, proving value and driving growth.”