Marketers, Let's Put Key Performance Indicators Into Perspective

When we speak only in terms of scalability, relevancy, viewability, and CPI, we can lose sight of what we’re actually trying to achieve and what those metrics really mean.

All too often, RFPs come our way that say something along the lines of “show us how you can get us 80% viewability on $ 50,000 on mobile and reach an eCPI below $ 5.” A lot of metrics are crammed in there, but there’s no indication of what the client wants as the end goal.

Does the client realize that a CPI goal indicates that we’re guaranteeing an install that can only occur after a download, which happens after a click, which means that an impression was seen? At that point, guaranteeing viewability is superfluous, but it’s put on the plan for the sake of comfort.

As Tommy Boy said in his titular movie, “Here’s the way I see it, Ted. Guy puts a fancy guarantee on a box ’cause he wants you to feel all warm and toasty inside.” And that’s exactly it.

We’ve lost sight of the purpose of a key performance indicator (KPI).

What do you really want?

The problem with looking at any metric in isolation is that you begin to deprioritize your ultimate objective. Marketers need to define their end goal and work with media providers to determine the best stepping stones to get there.

But this whole process needs to start with open communication.

Asking for and paying for viewability without identifying the final goal puts both teams in a bind—buyers can’t optimize toward what works and planners don’t get what they’re looking for.

Sure, impressions are the top of the funnel. Increasing the number of people that see your ad will boost the chances that the next step in the path to purchase will be realized… but simply asking for a metric doesn’t get anyone anywhere.

Metrics have a purpose. And a KPI should be just that—an indicator that another action should follow. Understanding the path to purchase for every advertiser—and the logic behind that path—is vital to success on both ends.

Breaking it down

There are so many areas of our lives where we use KPIs to help us understand progress against an ultimate goal. For example, imagine you want a job. You work on your resume, and you are proud that you sent it out to 20 companies. Someone has to bite, right?

Think of those 20 resume submissions as impressions. You hope all 20 people read your resume, but the only way to know for sure is some sort of validation (e.g., an email or call from the company telling you that your resume was received).

You’re realistic, and you understand validation of its reception is unlikely for 20 responses, so you set a goal for yourself. You really want three of those 20 companies to get back to you.

You found your first KPI. In reaching this moment, you haven’t met your goal, but you know you’re that much closer to getting there.

Now for the big moments… call-backs, interviews, coffee dates, etc. Each item feels like a win in the moment, but the reality is that they are all subsequent stepping stones to getting you to that paycheck. You wouldn’t submit your resume to 20 companies in hopes of three responses without ultimately wanting a job, so why ask for 70% viewability without explaining that you’re really hoping for a 3% conversion rate on your loyalty program sign-up?

* * *

Mini goals are important. They break down large tasks into bite-sized chunks that feel achievable—and therefore are achievable. But you need to understand how metrics contribute to your ultimate goal. You know what you’re working toward—whether it’s gaining an email sign-up, an Instagram follower who sees your posts daily, a one-time customer who makes a $ 20 purchase, or a loyal customer who spends $ 3 every couple of days at the same coffee joint. Whatever the target objective may be, the most important thing is to make sure that it is universally understood.

It’s time to be open and transparent with your agencies, tech providers, and media companies.

Explain your end goal and the path to purchase your users take. Recognize the value in each individual KPI. Listen to feedback from your partners regarding whether they think you’re looking at the wrong KPI—you hired them for their expertise, after all.

There isn’t “one metric to rule them all.” Many things contribute to success, but marketers and media teams need to be aligned on where they’re going in order to reach it.

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