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Methods for Evaluating Marketing Performance

Methods for Evaluating Marketing Performance

KPIs, ROMI, and Accountable Marketing are all metrics that are used to track marketing performance.


Illustrate the purpose and characteristics of marketing performance evaluation methods


Key Points

  • When evaluating marketing performance, companies should measure marketing outcomes from the consumers ‘ points of view, include all marketing activities, measure across a continuous time period, and meet statistical and technical criteria required of all measurement systems.
  • To accurately measure the effectiveness of marketing activities, KPIs must be integrated within the business and management of the company.
  • To ensure meaningful comparisons among activities, companies should employ a common scale, and measurement error must be quantified so that managers can react to changes in conditions.

Key Terms

  • Advertising Research Foundation: The ARF is an association where practitioners from every avenue of advertising—agency, academia, marketer, media, and research—gather to exchange ideas and research strategies.
  • return on investment: Return on investment (ROI) is one way of considering profits in relation to capital invested.
  • key performance indicators: considered industry jargon for a type of performance measurement, KPIs are commonly used by an organization to evaluate its success or the success of a particular activity in which it is engaged.

Evaluating Marketing Performance

Organizations use various methods to evaluate marketing key performance indicators (KPIs) or metrics. Marketing Performance Measurement, Marketing Performance Management, Marketing Return on Investment (ROI), Return on Marketing Investment (ROMI), and Accountable Marketing are all metrics that companies use to connect marketing performance to the financial performance of the organization.

A diagram that shows how companies (for example, YouTube, LinkedIn, Twitter, and Facebook) execute marketing strategies (responsibility, analytics, creativity, processes, guidelines, measurement, policy, support, monitoring, objectives, and business needs).

Marketing Performance: Using an established methodology to evaluate marketing effectiveness helps companies measure performance and assess business needs.

In order for marketing KPIs to be integrated within the business and management of the enterprise, and ensure consistency and reliability across the marketing mix, they must meet these minimum requirements:

  • Measure marketing outcomes from the consumers’ points of view
  • Include all marketing activities
  • Be repeated over time
  • Meet statistical and technical criteria required of all measurement systems

Consistency is Key

Marketing materials can be designed to inform, portray products and services attractively, and influence purchasing behavior. The methods for evaluating the performance of, and responses to, these materials range from simple calculations measuring return on investment, to tallying the number of visits to a website. Since marketing campaigns are typically integrated across all channels (e.g., print, email, and social media), these channels are measured together to understand the overall effect on target markets.

To ensure meaningful comparisons among activities, brands, markets, and time periods, organizations may employ a common scale to analyze performance metrics. Using different measurements to evaluate different communications activities, competitors, and markets does not allow direct comparison and results in lost synergies. Companies using formalized methodologies continually gather and monitor marketing data to understand where the marketing plan is strong and where it needs improvement. Long-term observation also brings true insight about unanticipated changes and “red flags” in the data.

All measurement systems should take into account accuracy, repeatability, reproducibility, bias, data shifts, and data drifts. Measurement error must be quantified so that managers can react to changes in conditions, but not to changes due to measurement variation. Independent organizations such as the Advertising Research Foundation evaluate the validity of commonly used measurement systems to produce standards and best practices for evaluating marketing and advertising data.

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