Question

Why should marketers keep metrics in mind as they set objectives?

Answer 1

Marketers must keep metrics in mind while they set objectives otherwise,

• how will they measure their achievement of objectives?
• how will they figure out the effectiveness of the strategies or methodologies deployed?
• how will the success be measured or failure be quantified.

Let's understand this by an example. Let's say a firm had traditionally been using print media for advertisement. It has now started using digital media for advertisement. It has started advertising its products on its own website and many other websites for which it has to pay some charges.

Objective is to increase sale volume. Let's say tomorrow the sale volumes increased from 100 to 103 and revenue increased form $1,000 to $ 1,030 because of digital campaign and advertisement. assume that money spent on this campaign was $ 2. Let's say there is no metric in place. Now, how do you know whether you have achieved your objective or not? How do you know whether digital campaign had been effective or not, successful or not?

Consider another situation where i had put in some metric to measure success and effectiveness. A dollar spent on print advertisement fetches me an incremental revenue of $ 10. So, i put in place a metric say incremental revenue per dollar of advertisement spend.

Now i know that in case of print media advertisement, incremental revenue per dollar of advertisement spend = $ 10. Here, in case of digital campaign, incremental revenue per dollar of advertisement spend = (1030 - 1000) / 2 = $ 15 > $ 10. Hence, i can now safely conclude that:

1. My digital campaign had been successful
2. Digital campaign does better than conventional print media campaign
3. Our strategy to shift from print media advertisement to digital advertisement had been effective.

Hence, marketers do keep metrics in mind as they set objectives.