image credit: photofarmer [Flickr]
The recent recession has been difficult on everyone — consumers, manufacturers, service providers and marketers alike. With inventories growing, revenues shrinking and consumer sentiment falling off a cliff, it is easy to understand why marketers have shifted their highly-scrutinized communication resources on lower funnel, direct response activities. There is nothing like a serious recession to focus everyone on ROI – especially lower funnel ROI.
But as we start to see the fragile tenants of recovery take hold, it is time for good marketers to focus less on short-term tactics and start planning brand building activities again. If there is one thing that good analytics teaches us, it is that every brand needs to build the top of its purchase funnel. Simply investing in, or harvesting from, the bottom of the purchase funnel will have dire consequences for even the healthiest of brands.
Within the world of the good “analysts,” the ability to create an upper funnel ROI is akin to what separates athletes in “Major” versus “Minor” leagues. To be clear, creating a good, attribute based lower funnel ROI isn’t easy. But it is much more difficult to create an accurate upper funnel ROI. Imagination, creativity and a deep understanding of the business vertical are costs of entry for this process. It often involves more complex modeling or less direct measures than a lower funnel ROI.
Difficulties aside, every marketer needs an upper funnel ROI. Here are three ways to get started with a smart upper funnel ROI strategy:
1. Quantify the impact that upper funnel activities have on lower funnel activities. Spending on brand focused, upper funnel campaigns, eventually leads to an impact in lower funnel activities. Understanding media lag or decay functions by channel will be critical to this process.
2. Quantify the impact that changes in key brand attributes have on ROI measures such as sales, loyalty or customer life time value. ROI measures that are more long term, such as loyalty, more accurately reflect the true value of upper funnel activities. The addition of survey data and holding out control groups to better understand lift are often necessary to quantify these causal relationships.
3. Ensure attribution between multiple touch points is accounted for. Otherwise, several high value upper funnel activities may appear to have a negative ROI, when in reality they are adding considerable value.