When most marketers use the word ‘data’, what springs to mind are large sets of numbers, Excel spreadsheets, cloud-based IT systems and complicated algorithms. Big data speak is the mot du jour. There is even a big data Week in London called the Festival of Data.
Modern marketing and business are defined by one thing: The Web. And it’s safe to say that CMOs, CEOs and CFOs are keenly aware of the huge hole when it comes to measuring the business value of online marketing.
When they want to know if all the time and money they’re pouring into Web marketing is working, they’re handed reports generated by campaign management systems such as Hubspot, Marketo, Vocus and even Salesforce. Invariably, the next question is: Where are the KPIs?
Good question. And the answer lies in how the Web is viewed.
Not truly understanding the dynamics of the Web is what leaves executives making strategic decisions using tactical information. Intuitively, they know this is wrong, but they can’t quite put their finger on what to measure.
The Web is extraordinary. Never before have we seen anything quite like it. It’s a business, it’s a market and it’s channel, all rolled up into one enormous and complex package. And that’s what makes it a struggle to measure and manage.
The goal here is to lay out an argument, for the first time, that the Web is an economic market. It’s more than just a channel for generating leads and engaging people; it’s genuinely a market with competitive forces.
Why is this important? Because it finally opens up new ways to measure the Web’s strategic value using a standard set of marketing KPIs.
The Web is a market
Don’t be scared off, this isn’t a treatise on microeconomics. The Web as a market isn’t a complicated concept. However, it’s an extremely powerful one for those who understand its strategic importance and who want to be able to quantify the business value of marketing beyond just lead generation and engagement.
The best way to demonstrate that the Web is a market is to analyse three key elements of a market – structure, competition and information exchange – then examine whether or not the Web exhibits these elements.
1. Structure: A market is a place where buyers and sellers come together for the purchase and sale of products and services.
Yes, the Web is a marketplace.
2. Competition: A market has a competitive structure. There are several types of market structures, each defined by the number of buyers and sellers, barriers to entry and exit, product differentiation, and pricing power.
Yes, the Web has competitive forces.
3. Information exchange: A market allows products and services to be evaluated and priced.
Yes, the Web facilitates decisions on product offerings and their prices.
The conclusion? The Web is truly a market of the economic sort.
So, why isn’t the Web a market in the sense that it represents potential customers? Because it’s a thing (network of content), it has both buyers and sellers, and it’s not a person or group of persons to be studied, segmented and targeted.
But what about Web lead generation? Isn’t that about studying, segmenting and targeting people online? Yes it is, which is why the Web is also a channel. But it is not a target market, which is distinguished from an economic market.
Web marketing performance measurement
Viewing the Web as a market presents the opportunity for a much-needed standard set of KPIs that can measure market-level Web performance. There are two types of measurements:
- Channel-level metrics that measure campaigns
- Market-level KPIs that measure brand Web presence.
Nearly all Web marketing performance is measured at the channel level; degree of engagement and number of leads are two that come to mind. But the purpose here isn’t to weigh in on channel-level measurement, so let’s get to the meat.
Fundamental assumption: The Web Is a network of content, so Web presence is the unit to be measured
To be considered a KPI, it must:
- Measure market-level brand Web presence
- Produce a trend that acts as a leading indicator of possible future business success.
There are three categories of Web marketing indicators: Brand, competitiveness and website. Each category has two KPIs.
To illustrate, we’ll explore one of the KPIs in more detail: Competitive Webshare – an indicator of a brand’s market competitiveness.
Competitive Webshare is the percentage of paid, owned and earned Web presence that a brand holds vis-à-vis a defined set of competitors. It’s a bit like market share but focuses on comparing a brand’s Web footprint to its most important competitors. By isolating the competitive set, executives are able to focus on developing competitive strategies that are most impactful to the business.
Like market share, Competitive Webshare is a critical trend to track. If a brand’s percentage goes up over time, it’s a leading indicator that the prospect for sustained business growth is promising. On the other hand, if the percentage is deteriorating, the business outlook isn’t rosy.
Having a set of indicators that work together to track and measure important aspects of how a brand is faring on the Web is paramount. It helps executives understand whether their investments in online marketing are creating conditions that can help put and keep the business on a path for future success.
Much of today’s confusion about how to measure online marketing performance is attributable to not fully understanding that the Web is not just a channel for generating leads and engaging audiences, but also a market in its own right. Viewing the Web as a market with competitive forces introduces new ways to measure its strategic value.
Through the use of market-level, Web marketing KPIs in the areas of brand, competitiveness and website, CMOs, CEOs and CFOs are finally able to gauge how effectively their investments in the web are paying off.
About the author Kirsten Chapman is a 30-year veteran of technology B2B marketing and PR, co-founder of MeasureMyBrand, where she pioneered the development of four of the industry’s first standard Web marketing KPIs, and principal of B2B marketing and PR agency, KC Associates.
This article first appeared in CMO Council’s Marketing Magnified December 2015 newsletter.