Gain Theory’s Jon Webb identifies the five key drivers of advanced measurement. Improvements to all five can dramatically increase the probability of revenue growth.

When American computer pioneer and mathematician Grace Hopper said, “One accurate measurement is worth a thousand expert opinions,” she probably didn’t have marketing effectiveness front of mind. But her quote is as true for marketers today as it was for programmers at the dawn of the computer age.

Measurement is one of the essential building blocks of marketing effectiveness – you can’t achieve profitable growth without it. As Raj Kumar, Chief Customer and Marketing Officer at HSBC Life, succinctly puts it: [Measurement] is hugely important. If you didn’t do it, how would you know if you’re doing well?”

But research we’ve undertaken shows that not all measurement strategies are created equal. Companies whose marketing measurement performance is rated as ‘good’ have almost 50% probability of recording revenue growth in excess of 5%. In contrast, companies whose marketing measurement performance is rated as ‘poor’ have just a 5% probability of achieving the same result.

This means companies lacking an advanced measurement approach are leaving growth on the table. Let’s look at how you can ensure you don’t fall into this category.

What do we mean by advanced measurement?

First, let’s define what we mean by advanced measurement. It’s an approach that transforms the raw material of data into actionable insights using a range of analytic techniques to measure the full impact of marketing over the short and long term.

There’s quite a bit to unpack there, but a key point I want to highlight is that you will not improve your measurement strategy simply by investing in a new marketing mix model or attribution tool. Instead, advanced measurement requires a more considered, holistic approach.

It’s also important to note that there is no one-size-fits-all approach – every company is different, and the specific needs of individual brands need to be accounted for in a measurement strategy.

The link between advanced measurement and growth

Many companies have a way to go before they can say their measurement programs are advanced. Respondents to a survey for Accelerating growth with marketing effectiveness: A playbook, from WARC and Gain Theory, scored their companies’ marketing measurement programs 5.8 out of 10 on average.

But I wanted to take this a step further to find out if there was a link between how respondents scored their programmes and the level of revenue growth that they said their companies had achieved. The analysis was conclusive.

Companies whose marketing measurement performance was rated as ‘good’ – which we defined as being scored at least seven out of 10 – have almost 50% probability of recording revenue growth in excess of 5%. In contrast, companies whose marketing measurement performance is rated as ‘poor’ – which we defined as three out of 10 or lower – have just a 5% probability of achieving the same result.

Improving measurement performance has a clear business benefit. It won’t guarantee strong revenue growth, but it will increase your chances of strong growth ten-fold. The next obvious question is: what defines ‘strong’ marketing measurement performance?

Five key drivers of advanced measurement

Further analysis of the survey revealed that there are five key drivers. In descending order of importance, they are:

  • Quality data: data that is clean, complete, and accurate enables businesses to make decisions with increased confidence
  • Granular data: disaggregated data that is updated frequently enables businesses to identify trends, anomalies, and opportunities that might otherwise be overlooked
  • Timely insights: insights that reach the right person at the right time enable the business can take action
  • Detailed tactical measurement: the ability to drill down beyond the channel to publisher, audience, and campaigns is now table stakes
  • Creative measurement: the ability to quantify the value of creative execution and tie it to sales rather than likeability or recall is an emerging and important area.

Advanced measurement is a journey – you don’t need to complete it all at once – but what is clear is that, no matter how sophisticated your measurement algorithms are, data comes first.  

In addition, while improving any of these five drivers individually will make your measurement capabilities more advanced, it is improving them all in combination that can dramatically increase the probability of revenue growth. 

I hope these findings push you to take a long, hard look at your current measurement strategy and find ways to make it more advanced in the future. To paraphrase Grace Hopper, advanced measurement is worth a lot of extra revenue.