CMOs highlight importance of measuring right marketing metrics in digital era
By Zion Rufus
Today, marketers are increasingly advocating for the use of data-driven marketing metrics to guide their strategies and measure success.
According to these professionals, embracing data-driven marketing metrics allows marketers to optimize their efforts, enhance ROI, and stay ahead in the competitive business landscape.
“These metrics provide a clearer understanding of customer preferences and enable marketers to make informed decisions about targeting, messaging, and resource allocation,” says Helen Akue, a brands and marketing consultant. She emphasized that by analyzing relevant data and metrics, such as customer behavior, conversion rates, and revenue growth, marketers can gain valuable insights into the effectiveness of their campaigns.
Everest Nwagwu, the Chief Marketing Officer (CMO) of Zabira Technologies also discussed the importance of measuring the correct marketing metrics in an interview with Marketing Edge. Everest, who is a Google certified Data Analyst, emphasized the need for data-driven marketing and decision-making in today’s digital landscape.
Using an analogy which compared statistics to a mini-skirt to explain their role in modern marketing, the marketing professional highlighted how tech startups often rely on impressive numbers, such as valuations, projected revenues, and user acquisition figures, to attract investors.
However, he cautioned marketers against getting caught up in these “vanity metrics” and urged them to focus on metrics that truly reflect return on investment (ROI).
According to Everest, the success of a marketing department or company can be accurately measured through numerical values as he quoted John Tukey, an American mathematician, who emphasized the focus of numerical quantities on expected values.
“Marketers must understand when and what to measure in order to evaluate the impact of their marketing activities effectively,” he said, referencing the book “Key Marketing Metrics” by Paul Farris et al, which explains the importance of using metrics to gauge success.
While metrics like impressions provide insights into ad visibility, Everest dismissed them as inadequate for determining real ROI. He cited John Cutler’s four indicators of vanity metrics: lack of context, unclear intent, failure to guide action and learning, and the absence of true ROI. Instead, he recommended concentrating on valuable metrics aligned with business goals and profitability.
Cautioning marketers to desist from relying solely on social media metrics like likes, shares, comments, followers, and views, Everest argued that these metrics do not provide a comprehensive understanding of marketing performance or facilitate data-driven decision-making.
“As a Founder or Investor, knowing what metrics to focus on is as good as knowing what platform gives you the best return on investment (ROI); vanity metrics do not tell you the whole story, neither does it help you in making data-driven marketing decisions,” he said, adding that many classic web “engagement” metrics like Page Views, Time on Page, and Average Session Duration are remnants of a pre-mobile, pre-device-swapping, pre-30-browser-tab, pre-single-page-app era.
“They were the best proxies for engagement and value exchange available at the time, but aren’t the best measures we have available now,” he continued.
Encouraging marketers to focus on metrics that provide accurate insights into their marketing performance and drive business growth, Everest identified essential metrics that should be prioritized.
Firstly, revenue serves as the primary indicator of profit and overall marketing performance. Additionally, analyzing the website traffic to lead ratio alongside other metrics provides valuable insights into the quality of Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs).
Calculating the cost per lead which also aids in understanding audience behavior by assessing the expense of user acquisition; measuring the conversion rate from leads to paying customers for evaluating the effectiveness of marketing campaigns; and lastly, understanding Customer Lifetime Value (CLTV) which aids in determining the long-term value a customer brings to the business based on metrics like purchase volume, value, and time spent on the platform.
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