Editor, IQ Advisor
Most marketers utilize some form of optimization to help achieve their organization’s business objectives. Our experience working with hundreds of marketers has taught us that your marketing campaign optimization efforts will be most effective when the following essential attributes are in place:
- Definitions of specific goals, targets and objectives
- Mechanisms to accurately measure the key performance indicators associated with those goals
- A process to cost-effectively execute optimization actions, such as:
- Media budget reallocations across and within channels
- Creative asset rotation adjustments
- User touchpoint and/or path adjustments
- Message, offer and/or content refinement
But not all optimization efforts will have the same impact, so first you need to consider the factors required to calculate the impact of your optimization efforts. These factors include:
- Proper Measurement
- The accuracy and timeliness of the information sources used to track performance
- The methodologies used to assess optimization opportunities
- Effective Utilization
- The ability to execute program changes
- The ability to produce test results and performance benchmarks
Proper Measurement: Identifying Optimization Opportunities
The obvious first step is to determine which factors have historically had the most positive or negative impact on your marketing performance. For example:
- Which media buys were most cost effective?
- Which offers generated highest return on advertising spend or rate of new customer acquisition?
- Which messaging most positively impacted audience engagement?
Marketers typically depend on their program performance reports to provide the answers to these questions. But all too often these reports are poorly designed or are of dubious accuracy, making it difficult to make significant improvements to your programs. To help navigate around noisy data and uninformative reports, experienced marketers will develop program-specific Measurement Plans that are used as companions to an associated Communication Plan or Media Plan. The Measurement Plan documents all of the details inherent with tracking, reporting and market testing, including:
- Definition of program objectives
- Key Performance Indicator (KPI) definitions and program projections
- Locations of data sources and other inputs
- KPI report design and frequency
- Definition of any tests and questions they seek to answer
- Resource, cost and timing requirements
Effective Utilization: Maximizing Impact
At program launch, you will hopefully be tracking performance via your marketing dashboard or through timely performance reporting, but how do you decide which optimization actions you should execute? This assessment can be fraught with missteps that lead to less than optimal optimization return. To make the most informed decisions, you need to consider the following:
- The impact of the recommended optimizations to overall performance. Establish reports/methods that help you prioritize your optimizations options based on their ability to directly impact the performance of your programs. For example, do you want your media agency to cancel that low-volume, disproportionately high cost per conversion placement, or is their time better spent negotiating an increased spend level on one of the high volume, very cost efficient placements?
- The resource costs to implement your optimization steps. How many optimization actions can be afforded within your budget? Have you fully accounted for all the costs associated with the changes? You may find it more cost-effective to perform only the most impactful optimization actions, limiting the strains on various execution resources, which could include:
- Media personnel executing changes to the buy contracts and/or insertion orders
- Finance and accounting resources to resolve more complex billing issues
- Trafficking and QA resources to ensure the accuracy of the implementation
- The time required to implement optimization actions
- Some optimization efforts can happen relatively quickly (e.g. creative rotation changes via ad server tools can take just a few minutes) while others may take longer to properly execute (e.g. user path development changes could depend on availability of high-demand website technology resources)
Perhaps even more impactful is the marketing intelligence gained from your past program performance and test results, to be applied to any future marketing programs via:
- KPI benchmarks that provide historical reference to better establish expectations or forecasts
- Knowledgebase of test results that helps you focus on successful tactics, and avoid those unsuccessful tactics
Program optimization is critical to maximizing your organization’s marketing and business performance. With some detailed up front planning, the proper consideration of any resource or execution constraints and the leveraging of historical results and benchmarks, you can significantly improve your chances to smooth, accurate and impactful optimization results.
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