Marketing effectiveness down 23% in 2021 with less focus on metrics that matter

Marketing effectiveness hit a downward trajectory in 2021 as reliance on “vanity measures” came at the cost of metrics that speak the language of the boardroom or focus on the impact of the campaign, according to new research published by the UK’s Data & Marketing Association (DMA) and Salesforce.

In 2021 the marketing effectiveness of campaigns fell 23%, after experiencing an increased level the previous year in the early phase of the COVID pandemic. On average across those campaigns analysed by the DMA and Salesforce, 3.1 measures were used per campaign to assess their effectiveness. 

But, the research says, the lessons marketers learned from “doing more with less” in 2020 were undone a year later, and just 2.4 measures per campaign on average were recorded. While there was a slight improvement in the number of measures used to assess brand impact per campaign on average, there was a distinct drop in “response effects” primarily associated with performance marketing effectiveness.

The messages from the second Meaningful Marketing Measurement report is that a blended approach to measuring effectiveness and campaign purpose is essential to ensure impact on the areas that matter to businesses.

Speaking at the report’s launch this week, Ian Gibbs, Founder and Measurement Consultant at Data Stories Consulting said: “The industry is not placing enough focus on the metrics that matter. A continued focus on the short-term and an over-reliance on retention activity contributed to this picture.”

Too much focus on “vanity” measures

The research from the DMA’s Intelligent Marketing Databank, which analysed the metrics or results quoted in more than 1,050 awards entries submitted to the DMA Awards between 2017 and 2021, found that marketers were using 170 different measures across the board to feed back on the effectiveness of campaigns. 

The report breaks down the measures into four categories:

• Business effects: Metrics linked directly to business performance, including profit, market share growth and shareholder value.
• Response effects: Those linked with direct response and performance marketing campaigns. Measures include conversions, CPA efficiency, acquisitions, sales and response rates.
• Brand effects: Measures that consider brand effectiveness, such as customer satisfaction, NPS, brand trust and purchase intent.
• Campaign delivery effects: Media planning campaign inputs and those termed “vanity metrics” within the research. Measures include clicks, likes, shares and impressions.

Between 2017 and 2020, 41% of the measures identified across all campaigns were campaign delivery effects, with 36% of those relating to response effects, 13% brand effects and 10% business effects.

Fast forward to 2021 and the reliance on campaign delivery effects and response effects remained unchanged. But while brand effects saw a slightly higher reliance (17%) just 6% of the measures quoted in the entries reference business metrics. 

The report concluded that campaigns had too much focus on “vanity measures” - campaign delivery effects - that look at the planning and optimisation of campaigns but offer less tangible measures of impact on metrics such as sales, brand value or long-term business health.

“Response” effects - those the research identified as being closely aligned to performance marketing measures - have become aligned to a short-term approach to marketing strategy, according to the research. But the decline in the average number of response effects seen in 2021’s analysis per campaign (1.6 from 2.1 in 2020) was pitched against an increase in the number of campaigns assessed as being short-term (running for one to three months) between 2019 and 2021.

More than half the campaigns in 2021 (52%) were short-term campaigns, slightly down on 2020 but up on the 44% in 2019.

Medium-term campaigns (four to 12 months) were found to draw the optimum return on investment, though on average pinpointed the same number of effectiveness measures per campaign as short-term counterparts. However, there was a squeeze in medium term campaigns in 2021. Just under a third of campaigns were deemed medium-term (35%), compared to 40% in 2020 and 43% in 2019. The squeeze in the middle meant a move to longer-term campaigns which accounted for 13% of those in 2021, up from 7% in 2020.

Gibbs said: “It was all about survival, doing what you can to drive those short-term sales. As a sustainable strategy, it’s been very hard to maintain. We’ve been sweating our customers, with more and more sales, more and more units shifting and we haven’t been able to do that as effectively in 2021 apparently.”

The research found that those campaigns that had a dual focus of brand and response effectiveness were more effective than those that looked to almost exclusively one or the other as an objective. 

Acquisition or retention?

There was also a drop in the number of campaigns that focused on targeting new customers. The dial on campaigns notably shifted towards retention at the expense of acquisition in 2021, according to the research. Acquisition-led campaigns made up 53% of those in 2020, compared to 45% in 2021. Meanwhile, those with a pure retention purpose increased to account for 28% of the campaigns last year, from 22% in 2020.

The report concludes that marketers have an opportunity to “look outside their own CRM systems and reap the rewards of increased customer penetration”. However, acquisition remained at least in part an objective for the majority of campaigns in 2021, indicating that a focus on the loyal and the new was still considered essential for success.

B2B effectiveness

More than one in 10 campaigns (16%) assessed as part of the research related to B2B marketing, and the report noted that B2B marketers were “more able than their B2C counterparts in bridging the language gap between the marketing team and the boardroom”. The B2B campaigns in the database were found to contain slightly fewer brand and response effects on average but had a marginally higher number of business effects as measures. 

Among the top overall effects reported in B2B campaigns were revenue growth, lead generation and downloads - which accounts for whitepapers and report consumption. While B2C campaigns also listed revenue growth as a top effect, other focuses looked at sign-ups and unit sales. 

“Business effects speak to the long-term financial sustainability of an organisation and their focus for B2B campaigns is perhaps an inevitability of marketers who are simply dealing with the vocabulary of “business” on a day-to-day basis through their campaigns,” the report said.