Metrics Madness

It seems all we hear about these days is ROI (define) and metrics, and with good reason. As businesses are required to get more cost-efficient, marketers are increasingly being held to the same bottom-line standards as other departments. And procurement officers are more and more often involved in agency/marketer relationships.

In some ways, interactive marketers are perfectly positioned to thrive in such an environment. Digital media is incredibly measurable, whether you’re talking clicks, views, forward-to-a-friends, or even conversions. But something is getting lost in the sea of numbers: good creative. And interactive marketing — precisely because of the data overload — may be especially prone to getting caught up in the metrics madness.

I got to thinking about the topic at the Advertising Research Foundation’s “Advertising: What’s Next?” event in San Francisco last December. Despite the fact the workshop was ostensibly about research, speaker after speaker talked about the perils of being overly reliant upon metrics.

“I really struggle with the notion of marketing ROI,” confided Steven Wilhite, SVP of global marketing at Nissan. “All of this energy in the world today is being spent on measuring media effectiveness rather than on measuring the total product.”

Andrew Saltzman, VP of corporate marketing at Siebel Systems, shared a similar sentiment. “There is such a premium on immediate return on investment,” he lamented.

It’s not that people aren’t trying to measure the “total product.” Attempts at measurement are at an all-time high. Efforts to measure word of mouth online, especially, are exploding. It seems like every day I get a press release from a company trying to get its arms around one or another aspect of marketing or its impact on consumers. Nielsen//NetRatings is measuring engagement (as monthly page views/user) and the ARF folks are working on developing a new cross-media “engagement” metric.

But as my colleague, Rebecca Lieb, wrote in these virtual pages, “engagement,” in its current state, is “a pretty flabby goal, marketing-wise.” Consumers can watch cool viral videos or play advergames all day long, but does that convince them the product — and not just the ad — is great?

Is there a way to really capture the feeling consumers develop about a brand when a marketing effort — an ad, a video, a Web site — really hits home? Nissan’s Wilhite had a great analogy to describe the intangible nature of these types of things.

“What are the most important relationships in your life?” he asked the audience at the ARF event. Invariably, spouses and children were mentioned as the top two. “What’s the metric or the KPI [key performance indicator] for the quality of that relationship?” Is it the number of times you say “I love you,” he asked, or the number of hugs and kisses?

I fear the relentless focus on the bottom line may be reflected in corporate and agency priorities. What happens when we spend all our time and energy recruiting researchers instead of hiring the creative genius to concoct a way to genuinely connect with the target audience? What happens when we’re so busy measuring immediate page views or conversions, and fail to do the brand-building work that makes people want to buy in the first place?

The most dramatic and telling anecdote on this subject came from Wilhite. He showed a chart in which one line measured purchase intent — whether people planned to buy a Nissan in the next several months. The line showed three distinct precipitous dips. Another line on the chart measured sales. Ironically, sales shot up at the same time purchase intent fell dramatically. What was going on? Turns out the company was having a “sales event” during those periods, solely running ads that pushed incentives and sought to move units. The dealerships loved it. “Let’s run campaigns like this all year,” they thought.

If Nissan hadn’t also been measuring purchase intent — admittedly a more slippery and soft number — how skewed would the company’s perspective be? In year-round “sales event” mode, purchase intent would probably slide lower and lower, until no one really cared whether Nissans were on sale or not.

The picture Wilhite painted was one of a constant struggle, in which he regularly butts heads with president and CEO Carlos Ghosn. “There are some questions that aren’t necessarily going to be answered in the terms that he’s looking for,” Wilhite conceded.

The industry should continue to work to find common terms that meet the needs of both CMO and CEO, whether they be engagement or something else entirely. What to do in the meantime? Keep fighting, keep struggling, and remember you can’t measure everything.

Meet Pamela at Online Video Advertising Forum in New York City, June 16, 2006.

Pamela is off this week. Today’s column ran earlier on ClickZ.

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