Last week, Movéo’s director of data and insights, Jiani Zhang shared her expertise on the topic with the team at one of our biweekly CRAVE sessions. Today, we’re bringing you highlights from her talk.
As your organization and your new marketing firm work together to create a strategic plan, one of the best tools you have to aid in goal-setting are benchmarks. Benchmarks provide a context for your marketing measurements, giving your team a view of how you stack up against your competitors and how successful your campaigns are relative to each other. Let’s take a closer look:
Without benchmarks, your team cannot draw meaning from the data you collect. Say you’re looking at the performance of a banner ad, which has a 0.08% clickthrough rate. This number seems very low intuitively — it’s under one percent. And yet, once compared to Google’s benchmark for banner ad success, 0.06%, it becomes clear that the banner ad in question is actually significantly outperforming the average.
In a similar way, benchmarks provide the basis for evaluating and setting goals in your strategic plan and in individual campaigns. When planning your marketing, test whether your goals are achievable based on your results to date. For example, perhaps your first instinct is to set a goal of gaining 2,500 leads in the next quarter. Take a look at your past performance and do the math. What conversion rate would this require on your landing pages? If it would require a 30 percent conversion and you’re currently achieving a 5 percent conversion rate, it’s time to reconsider and set a more realistic short-term goal.
Benchmarks can also help your team decide on whether a given campaign idea makes any sense at all. Consult past reports or industry data on the cost of a lead in a certain type of campaign, and compare it to how much each lead will bring back to the organization. If the margin is too small to be worth pursuing, or if it in fact would cost more to acquire the leads than they would bring in, your organization can easily cross that campaign off your list.
As you craft a strategic plan or work with a marketing partner who will craft one for you, there are several valuable sources of information that your organization can use as benchmarks.
These include:
Your own historical data. In many cases, the best predictor of your organization’s future success is its past performance. You should be able to vouch for the accuracy of the data, and it will be consistent with your organization’s unique circumstances. These data are particularly useful if your organization operates in a niche market, has a unique business model, consistently performs far above or below industry standards, or is significantly larger or smaller than your competitors. The downside? These data don’t provide contextual industry and competitor information when considered alone.
Industry data: To learn about your industry, consult the work of research firms, industry analysts and industry associations. While information from these sources will contain sampling and self-reporting biases, they still offer an excellent look at your industry as a whole. Ideally, your marketing team or partner firm will consult several sources of such research to gather the fullest picture of the industry.
Competitor data: Data from competitive intelligence sources such as SimilarWeb give your marketing team a glimpse into the web traffic of your competitors, including referral sources and keywords. This information is most reliable when you are dealing with sites with large amounts of traffic, as smaller data sets are more prone to show an outsized impact from a few outliers. All the same, the direct measurement tools these sites employ make them valuable sources to consult for benchmarks.
Media vendor data: If you are working with a media vendor, the vendor can provide volunteered website data from industries and companies. These data allow you to truly compare “apples to apples” by looking at the same tracking approaches your organization uses across others in your industry. These analytics can offer valuable insights that you can use to shape marketing decisions.
To learn from these data sources and create useful benchmarks, conduct thorough research using all these sources, but always bring it back to focus on your own organization. Make sure to take into account any major changes in your organization or industry that will make past data a poor predictor of future outcomes.
For more insight into the role of data and analytics in modern marketing, read our white paper, The new marketing value chain.
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