DISCUSSION

Retailers and brands are using the wrong KPIs to make digital and social media buys

May 28, 2021Written by Tom Ryan

Photo: Getty Images/jacoblund

The “most used” KPIs (key performance indicators) for digital and social media investments are generally not the “most important” ones, according to a survey of U.S. marketers by the Association of National Advertisers (ANA). Thirty-nine KPIs across six categories (Audience Measurement, Efficiency, Exposure Counting, Measurement Quality, Outcome, Other) were identified in a survey of 93 marketing professionals conducted in January and February. The five most used KPIs were:

CPM (cost per thousand)
CPC (cost per click or interaction)
Unique reach
ROI/ROAS (outcome versus marketing investment) based on spending or lift
Site visits

The five most important KPIs were determined to be:

ROI/ROAS (outcome versus marketing investment) based on spending or lift
Exposed ROAS (spending and lift, only using valid measured exposures as a base)
Brand safety ketrics
Customer lifetime value
Conversion

The “Media KPIs That Matter” study found that the most used KPIs are primarily efficiency (CPM, CPC) and exposure counting KPIs (unique reach). ANA said, “This suggests that media KPIs that are the most used are mainly focused on the top of the marketing funnel, favoring measurement of the ‘stimulus’ over the measurement of the ‘response.’” The most important KPIs are based on outcome and measurement quality. ANA said, “This suggests that media management today is being held directly accountable for driving business outcomes, and that the quality of the media exposure is more important than the quantity of the media exposure in driving results.” ANA saw the findings as “highly encouraging” despite the most-valued metrics being less used. The most used KPIs include many metrics that have long been industry staples, can be constructed from available data, apply to a wide variety of campaigns and goals and are relevant to almost every situation. The highest value KPIs put a premium on outcome measures that provide reads into more efficient and impactful campaigns. “There is apparently demand for measures of quality (e.g., brand safety, customer lifetime value) that are seen as important, but not widely in use,” said Scott McDonald, ARF’s president in a statement. “In the meantime, everyone is making do with exposure KPIs that are available, but viewed as less desirable (reach, site visits, impressions, viewable impressions, etc.). It would seem that there is opportunity for companies that can address this gap.”

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