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How Agencies Need to Leverage Marketing Performance Measurement

Last updated: December 21, 2020

When an agency presents data that exceeds ROI goals, marketers tend to be skeptical. So how can agencies build client confidence? Contributor Rex Briggs shares five suggestions. 

For decades now, marketing executives have demanded better marketing analytics and data to judge both the performance of their campaigns and their agency partners. Agencies are listening — but are they following the right procedures to accurately measure their success?

The ongoing drumbeat to prove ROI has led many agencies to start using attribution models to measure digital, but the outputs from digital attribution often are misleading. Other agencies have developed proprietary mix models to help prove their success. However, even if an agency produces good advertising and does their own measurement, they risk experiencing scrutiny and skepticism from their clients.

current state of marketing measurement and optimization

This leaves agencies facing an interesting Catch-22 - how do they communicate their success without that success calling their measurement methods into question?

The "Agency Measurement Paradox"

A wise agency executive, Dave Gantman, shared with me what he called “The Agency Measurement Paradox.” In his experience, Dave found that when agencies share performance metrics showing a campaign didn’t reach an ROI goal, the client often unquestionably believes the data is accurate. It may seem counter-intuitive, but sharing bad news can help the agency gain credibility.

Yet, when agencies share performance metrics that show the campaign beating ROI goals, clients are more often dubious. Skeptical marketers view the metrics as self-serving to the agency, thereby discounting the metrics that show the agency’s good work. Despite needing to deliver good news, agencies have their credibility called into question when they do so.

This may even lead the client to doubt the agency’s veracity. It’s precisely for this reason, Gantman argued, that the most important partner to a good agency is independent measurement.

But I would be remiss were I not to mention the number one reason agencies shouldn’t measure their own results. 

Quite simply, clients don’t want their agency to do it.

Nearly all of the marketers, or 97 percent, in an Association of National Advertisers survey indicated that they prefer third-party measurement. It’s no wonder why - transparency and accountability are more important than ever in an environment that’s rife with ad fraud and misattribution. As Mike Eichorst, a recently retired Citibank SVP of measurement, told me:

“Every part of our business is independently measured and held accountable to deliver agreed-to results. There is a clear need to have that same level of confidence in our agencies’ performance. We want to celebrate our wins together and quickly find ways to improve our performance. Independent measurement makes that possible.”

The issues of transparency are real for marketers, and they’re asking genuine questions about the motives of their agencies. This is especially true when they have multiple agencies and one is offering to measure the others. The proverbial “fox guarding the henhouse” paints the agency as having questionable motives. Are they really seeking to provide third-party measurement, or do they want to increase their stake in your business?

But let’s take a situation where the agency’s motives are 100 percent in the interests of the marketer, and the agency has no ulterior motive regarding their own revenue or profit. Gantman, who spent most of his career in agency research and rose to the level of managing director, captures the solution to the paradox when he says, “A good advertising agency’s best resource is an independent measurement vendor.”

This quote is compelling to me because I have witnessed agency relationships grow stronger through a tight, but independent, partnership with measurement companies.

How to Build Client Confidence

So, how can an agency avoid this fox-and-the-henhouse situation? Here are five suggestions for addressing the problem and building client confidence:

1. Be Transparent

Develop partnerships with measurement companies that are committed to understanding business goals and providing complete transparency. You want to know how they are measuring, what data they have, and perhaps what data may be missing.

2. Find Independent Validation

Any independent measurement company can claim they’re a good choice. Look specifically for partners whose measurement solutions and processes have been validated by independent third parties. For example, participants in Forrester’s recent “Measurement & Optimization Wave” all have had their methods independently validated by marketers.

3. Look for Flexible, Speedy Analysis

In today’s always-on, 24/7 world, modern marketers need flexible solutions that can respond to an ever-changing marketplace. Agencies should look for partners that can offer in-campaign optimization with direct links to your agency’s buying systems.

Keep in mind that the insights, solutions and plans provided by your measurement firm must be actionable. Otherwise, all your agency will get is a backward-looking report card, with no chance of improving the score. With agile, actionable results, the agency will have the opportunity to improve.

4. Become More Agile

Clients will want their agencies to have a fast and efficient measurement process. Look for a partner with whom connections to your media systems, such as digital logs and DMP (data management platform), can be set up once, then reused for future engagement.

Select a partner that will help make the process of onboarding clients seamless by providing the agency a rate card for the use of their service, a standard pitch deck, and answers to frequently asked questions.

5. Commit to Implementation

Agencies can find a significant opportunity to grow their revenue by turning results into insights that drive next-level marketing performance. In addition to driving a client’s business forward, subsequent learnings may be applicable to other clients in your portfolio.

A good measurement partner will also allow your agency to lead more “test and learn” to create more value for the marketer.

Modern agencies must be eager to find the tools they need to prove the value they deliver to their clients. They must also be interested in discovering solutions that work, and consistently learn from ideas that don’t work as intended. Once an agency can harness these insights, it’s possible to find competitive advantages for their clients - and themselves.

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Written by Marketing Evolution