December 6, 2010

Upgrading Your Interactive

Measurement Strategy
by Joanna O’Connell
for Interactive Marketing Professionals

Making Leaders Successful Every Day

For Interactive Marketing Professionals

December 6, 2010
Upgrading Your Interactive Measurement Strategy
Why You Should Make Multichannel Measurement A Priority
by Joanna O’Connell
with Emily Riley, Kate van Geldern, and Jennifer Wise

Execut i v e S umma ry
Marketers measure digital channels in isolation from one another. However, consumers don’t act within
channels; they act across channels. Cross-channel measurement, a nice-to-have for most marketers
today, will be table stakes in just a few years as its value in driving tangible benefits to the bottom line
becomes increasingly clear. Marketers can achieve these benefits today by diving into cross-channel
measurement full on: creating an analytics center of excellence, working with an agency on a cross-
channel measurement strategy, or investing in a technology solution from companies like ClearSaleing
or MarketShare Partners.

tabl e of Co n te nts N OT E S & R E S O U R CE S

2 Marketers Fall Short When It Comes To Forrester fielded its May 2010 US Interactive
Measuring Business Objectives Marketing Online Survey to 309 interactive
Multichannel Measurement Can Improve Your marketing professionals. Additionally, we
Bottom Line interviewed the following companies for
this report: Adobe (Omniture), ClearSaleing,
Look To Your Partners — Internal And External
— For Help Coremetrics (an IBM company), FedEx, IBM,
iCrossing, MarketShare Partners, Razorfish, and
recommendations
Starcom MediaVest Group.
10 Make An Investment In Analytics To Improve
Efficiency And Sales Related Research Documents
11 Supplemental Material “Selecting An Attribution Vendor”
December 3, 2009

© 2010, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available
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2 Upgrading Your Interactive Measurement Strategy
For Interactive Marketing Professionals

mARKETERS fall short when it comes to mEASURING bUSINESS oBJECTIVES

Interactive marketing is about driving revenue to a company’s bottom line, plain and simple. This
can take a circuitous path, where the focus is on constructing a strong and recognizable brand,
connecting with consumers, and building and maintaining loyalty. Or it can be very straightforward,
where the promotional message is clear and the expected return is immediate. We found that:

· Interactive marketers have classic business objectives . . . Of the interactive marketers that we
surveyed at companies with more than $500 million in revenue, 52% cite brand awareness as
important in determining how to invest in interactive marketing, and more than 40% cite sales
objectives (see Figure 1). Very few — just 10% — note that “engagement,” an oft-referenced
digital metric, is a key business objective.

· . . . but fail to use metrics that provide guidance . . . While these interactive marketers at larger
companies certainly point to sales as their most important measurement metric, there are a
broad number of intermediary digital metrics that also bubble to the top (see Figure 2). Leading
analytics experts at large agencies such as Starcom MediaVest Group and Razorfish confirmed
that it’s not uncommon to see marketers, in the words of Andy Fisher, executive vice president,
global director of data and analytics at Starcom MediaVest Group, “substituting what they can
get from the direct response path and pretending they are brand metrics.” For example, this can
occur when marketers regard the download of a brochure as engagement.

· . . . and rarely use multichannel measurement best practices. Fifty-seven percent of the
interactive marketing professionals we surveyed measure results for each channel, but less
than half, only 28%, measure the influence of one channel on another (see Figure 3). Analytics
and measurement firms such as Adobe (owner of Omniture), ClearSaleing, and cross-media
analytics company MarketShare Partners agreed.1 According to Wes Nichols, co-founder and
CEO of MarketShare, “The industry has historically measured in swim lanes — email, search,
display, TV . . . The 21st century consumer doesn’t make decisions in swim lanes” (see Figure 4
and see Figure 5).

December 6, 2010 © 2010, Forrester Research, Inc. Reproduction Prohibited

 Upgrading Your Interactive Measurement Strategy 3
For Interactive Marketing Professionals

Figure 1 Brand Awareness And Sales Are The Most Commonly Cited Business Objectives

“Which of the following business objectives are the most important when determining
how to invest in interactive marketing? Select top three.”

Brand awareness 52%

New customer sales 43%

Overall sales 40%

Loyalty 28%

Leads 24%

Cost savings/efficiency 24%

Return customer sales 16%

Brand sentiment 12%

Sponsorship/brand association 10%

Engagement 10%

Don't know 1%

Base: 67 US interactive marketing professionals at companies

with more than $500 million in annual revenue
Source: May 2010 US Interactive Marketing Online Survey
58080 Source: Forrester Research, Inc.

© 2010, Forrester Research, Inc. Reproduction Prohibited December 6, 2010

4 Upgrading Your Interactive Measurement Strategy
For Interactive Marketing Professionals

Figure 2 Marketers Ignore Brand Metrics, A Key Business Objective

“Which of the following metrics are most effective when measuring the success of your
interactive marketing campaigns? Select top three.”

Sales 61%

Site visits 40%

Impressions 28%

Clicks 24%

Return visit or loyalty metrics 24%

Lifetime sales 19%

Conversions 15%

Share of voice 13%

Engagement metrics 10%

Social activity metrics (e.g., posts,
friends, fans, tweets, etc.) 6%

Cross-channel lift metrics 4%

Lifetime profit 3%
Virality or pass-along metrics (e.g.,
number of videos or emails shared) 1%

None of the above 1%

Listening platform metrics 1%

Base: 67 US interactive marketing professionals at companies

with more than $500 million in annual revenue
Source: May 2010 US Interactive Marketing Online Survey
58080 Source: Forrester Research, Inc.

December 6, 2010 © 2010, Forrester Research, Inc. Reproduction Prohibited

 Upgrading Your Interactive Measurement Strategy 5
For Interactive Marketing Professionals

Figure 3 Channel-Specific Measurement Is Common, Multichannel Is Not

“Which of the following statements do you agree with?”

We measure results from each of the

marketing channels we use 57%
We rely on a marketing planning document
to summarize when and why we use 51%
different marketing channels
We measure customer engagement 37%

Our marketing plan is based on facts

developed through statistical analysis 37%

We have IT resources dedicated to

supporting marketing activities 36%

We need more advanced technology to

better meet our marketing goals 31%

We measure the influence of one 28%

interactive channel on another
The interactive team has the support
of our CMO or other executives 27%
Our interactive marketing team has a good,
cooperative relationship with other parts 25%
of marketing and sales 57% of respondents
We coordinate our media buys for traditional measure each of their
25%
and interactive marketing channels channels, but only 28%
measure the influence of
The interactive team pushes the 25%
marketing agenda at our company one interactive channel
on another.
We automate multichannel 18%
campaign execution
Base: 67 US interactive marketing professionals at companies
with more than $500 million in annual revenue
(multiple responses accepted)
Source: May 2010 US Interactive Marketing Online Survey
58080 Source: Forrester Research, Inc.

© 2010, Forrester Research, Inc. Reproduction Prohibited December 6, 2010

6 Upgrading Your Interactive Measurement Strategy
For Interactive Marketing Professionals

Figure 4 Measurement Today Exists In Swim Lanes

Display (reach, click through rate, cost per action)

Lane 1

Search (click through rate, conversion rate, cost per action)

Lane 2

Site-side (pages viewed, searches performed)

Lane 3

Email (open rate, conversion rate)

Lane 4

Affiliate (volume)
Lane 5

Offline (reach, frequency, in-store sales)

Lane 6

58080 Source: Forrester Research, Inc.

December 6, 2010 © 2010, Forrester Research, Inc. Reproduction Prohibited

 Upgrading Your Interactive Measurement Strategy 7
For Interactive Marketing Professionals

Figure 5 Consumers Don’t Make Decisions In Swim Lanes

Sees TV Browses Clicks on

commercial client site branded
search ad

Sees Clicks on Browses

display ad display ad client site

Receives
and opens Browses Purchases in
email client site retail store

58080 Source: Forrester Research, Inc.

© 2010, Forrester Research, Inc. Reproduction Prohibited December 6, 2010

8 Upgrading Your Interactive Measurement Strategy
For Interactive Marketing Professionals

Multichannel Measurement Can Improve Your Bottom Line

Multichannel measurement is happening — and the smart marketers doing it will beat the
competition hands down. What you can gain from investing in multichannel analytics is:

· Cost savings. A large online subscription site used Omniture to assess potential over-counting
of conversions across affiliates, search, and display. Through the analysis, the site found that
it had over-allocated its online marketing budget by more than 20%, representing millions of
dollars in over-allocation. As a result of this discovery, it tweaked the mix to more effectively
capitalize on its available spend.

· Increased sales. A large retail client of agency iCrossing was able to see the true value in
nonbranded search terms as a result of an advanced attribution study. While the traditional last-
click attribution model showed that its search program was driving $1 million in revenue, more
advanced attribution proved that nonbranded search was driving an additional $800,000. This
finding helped the retailer justify continued spend in nonbranded search, a tactic that otherwise
was headed for the chopping block.

· A more effective sales process. IBM has developed a sophisticated scoring system that assigns a
specific number of points to each action a consumer takes in the purchase funnel (downloading
a whitepaper, opening an email, etc.). IBM sales, which is responsible for follow up with
potential customers, receives information on the cumulative point score in advance of making
contact. Sales now has a rich store of information from which to draw during the sales process,
a significant improvement over the old model where salespeople were passed leads with very
little knowledge of the potential value of those leads.

Look To Your Partners — Internal And External — For Help

Current approaches to interactive measurement run the gamut (see Figure 6). Marketers may already
have the necessary tools at their disposal, but may not be taking full advantage of them. Partnering
with a solutions provider that meets your specific needs can be extremely useful in helping you move
toward a multichannel approach to measurement and attribution. The answer could also lie within
your organization, in the form of organizational restructuring or additional hires.

· Partner with an agency. With a historic focus on tracking and measurement, agencies like
Razorfish can make excellent partners in developing a strategic multichannel road map and
executing against the same. In partnership with a major retail client, Razorfish created a
robust measurement system that allows its client to look at how online activities affect offline
sales. Other agencies with strong measurement capabilities include Rosetta and iCrossing;
although increasingly, search engine marketing firms like 360i are also rolling out multichannel
measurement capabilities (with a current focus on digital).

· Look to a technology provider. Companies like ClearSaleing and MarketShare Partners, as

well as more traditional Web analytics firms like Omniture (owned by Adobe) and Coremetrics,

December 6, 2010 © 2010, Forrester Research, Inc. Reproduction Prohibited

 Upgrading Your Interactive Measurement Strategy 9
For Interactive Marketing Professionals

an IBM company, offer technology-based solutions to attribution.2 For example, a large auto
insurance customer of ClearSaleing keeps an eye toward profitability across its media mix using
ClearSaleing’s advanced attribution solution. If the lifetime profitability of online customers
is less than that of call center customers, for instance, the mix is shifted accordingly, lifting
performance overall.

· Evolve your own organization. Analytics capabilities are key to moving toward more robust
measurement. Where internal resources permit, it is not uncommon to see the most sophisticated
marketers building out internal analytics teams. For example, FedEx recently reorganized its
marketing group to create an interactive marketing center of excellence (COE). A key objective of
the new COE is to consolidate and improve digital marketing analytics capabilities.

Figure 6 Measurement Tools And Methodologies Run The Gamut

“How do you currently measure the success of your interactive marketing spend?*”

We have developed our own measurement tool in-house,

which we use to measure our interactive marketing 37%

We use our site analytics tool (e.g., Omniture)

as our primary measurement source 36%

We take the data sent to us from our media partners and 27%
compare results in an Excel spreadsheet
We use our search analysis tool (e.g., Google analytics)
as our primary measurement source 24%

Our agency does most of the campaign measurement for us 22%

We have a sophisticated team of quantitative and qualitative
analysts in-house to measure the success 21%
of our interactive marketing
We use our ad serving tool (e.g., DoubleClick)
as our primary measurement source 13%
We use methodology to assign partial credit to all
of the site or partners that lead to a click or 13%
conversion, etc. (AKA attribution)
We use a listening platform to determine the success of our
interactive marketing campaigns 10%
We rely mostly on the “last click” method of measurement,
in other words, we give credit for a click, conversion, 7%
etc., to one site or one partner
We don’t currently measure the success of our
interactive media spend 6%

Base: 67 US interactive marketing professionals at companies

with more than $500 million in annual revenue
Source: May 2010 US Interactive Marketing Online Survey
*Multiple responses selected.
58080 Source: Forrester Research, Inc.

© 2010, Forrester Research, Inc. Reproduction Prohibited December 6, 2010

10 Upgrading Your Interactive Measurement Strategy
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Recomme n d a t io n s

Make An Investment in Analytics TO Improve Efficiency and Sales

The importance of accurate multichannel measurement and attribution cannot be overstated. It
can mean the difference between a profitable, growing marketing budget and shrinking dollars
and resources. To get started, spend the necessary time understanding your data, consider
forming partnerships with agency or technology providers, and invest in analytical capabilities if
you have the resources to do so.

· Align your digital metrics with your stated business objectives. Digital metrics are
useful indicators only after you have benchmarked which of them map to your key business
objectives, such as sales or brand awareness. For example, look at your branding metrics
through the lens of financial outcomes. ClearSaleing recommends questions like the
following: Is this branding initiative driving people to buy? Do your branding initiatives
increase average order value? Are you shrinking the customer buying cycle?
· Understand your customers’ purchase path. You should have strong measurement
capabilities at each step of your consumers’ path to conversion. For example, if your Web
site is your primary source of conversions, focus on deep site-side analytics and customer
intelligence to improve the site experience.3 If your consumers tend instead to convert offline,
have a mechanism with which to tie offline sales to your digital marketing activities.
· Take baby steps, but don’t get complacent. Pick the biggest contributors to your overall
success and begin by looking at them in connection with one another, for example how
display ad impressions might drive search behavior. However, be mindful that other
channels are likely contributors as well — develop a road map as to how and when you will
incorporate them into your attribution model down the line.
· Talk to your current partners, be they technology providers or agencies. They may
already offer multichannel measurement solutions that you’re not taking advantage of.
· Think about analytics as “cost savings” not “added expense.” While it may feel like
yet another expenditure, investing in smarter measurement can more than pay for itself.
MarketShare Partners noted for example that their clients see 10% to 30% improvement
in marketing effectiveness in the first year as a result of moving toward multichannel
measurement and optimization.

December 6, 2010 © 2010, Forrester Research, Inc. Reproduction Prohibited

 Upgrading Your Interactive Measurement Strategy 11
For Interactive Marketing Professionals

Supplemental MATERIAL
Methodology
Forrester fielded its May 2010 US Interactive Marketing Online Survey to 309 interactive marketing
professionals. For quality assurance, panelists are required to provide contact information and
answer basic questions about their firms’ revenue and budgets.

Forrester fielded the survey in May 2010. Exact sample sizes are provided in this report on a
question-by-question basis. Panels are not guaranteed to be representative of the population. Unless
otherwise noted, statistical data is intended to be used for descriptive and not inferential purposes.

If you’re interested in joining one of Forrester’s research panels, you may visit us at http://Forrester.
com/Panel.

Endnotes
1
Several measurement companies, including ClearSaleing and MarketShare Partners, noted that clients
come to them specifically because they wish to improve what they consider to be suboptimal measurement
techniques and practices. These represent a more sophisticated set of marketers, those who are actively
addressing their own need for better measurement in the pursuit of meeting stated business objectives.
2
For more information and recommendations on the subject of advanced attribution, marketers are
encouraged to see the December 3, 2009, “Selecting An Attribution Vendor” report.
3
A simple first step is putting a survey on your site that validates who you think your customers are and
marrying that to how they navigate to your site, recommends Andy Fisher, Starcom MediaVest Group’s EVP,
executive vice president, global director of data and analytics.

© 2010, Forrester Research, Inc. Reproduction Prohibited December 6, 2010

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