What Most of Us Get Wrong about Measuring Marketing

Let’s say that you run an online store. You advertise that store using a range of different marketing channels — Google Search, Facebook, YouTube et cetera. If someone buys something from your store having seen ads on all of these channels; which one do you give the credit to?

This is the fundamental question of how you measure marketing. In a digital world, where consumers can see hundreds of your ads before deciding to make a purchase, it can be exceptionally difficult to decide which of your ads are really driving sales.

This isn’t just an abstract question either. If you want to increase your sales by spending more on advertising, you have to decide where to put your extra budget. But in order to know the best place to put that budget, you have to understand which of your ads are actually driving sales.

There are three different approaches to answering this question, which come from three different eras of marketing.

The Rule Era

The first approach to measurement uses rules.

A classic example of a rule-based approach is what’s know as last touch measurement. This says that sales should always be attributed to whichever ad a user interacted with last.