Measuring marketing performance is of utmost importance to marketers because it is used by upper management to evaluate the success of a campaign and to drive future budgetary requirements (Rotfeld, 2007: 132). However, measuring the effect of the marketing activities discussed in this paper is a difficult and complex task. Traditionally, measuring marketing activities has required the use of ‘reliable aggregate market information’ and attitudinal responses obtained from surveys (Barwise and Farley 2004: 260). In addition, firms commonly adopt a number of internal and external marketing metrics such as return on investment (ROI), brand awareness, sales and market share and then compare these with short and long term financial performance. Whilst these metrics may be useful at measuring the performance of traditional forms of marketing, they are not as useful for measuring the effectiveness of modern activities such as online communities, WoM, Viral and online interactive communication for a variety of reasons.
First, online communities do not always have a prime function of increasing sales or market share and therefore cannot be measured effectively using traditional metrics. As discussed, companies such as Sunsilk and Threadless have built communities with the intent to foster strong relationships, increase brand awareness and provide consumers with insight into their products. These companies also see their communities as a way of increasing loyalty and creating a way for consumers to provide feedback. Given the relationships formed within these communities are intangible benefits, their positive impact is unlikely to be captured in ROI calculation and will be of better use to marketers if captured by more qualitative means.
Similarly, measuring the effect of viral communications is problematic and provides another example of the need to use alternate metrics. Measuring viral communications based on ROI and market share is difficult because of the variety of ways consumers can participate in viral marketing (Cruz and Fill 2008: 746). Moreover, whilst academics outline the importance of viral campaigns, there is limited literature relating to how companies actually go about measuring its effect (see Cothrel 2000: 19). Notions of success are also dependent on what a viral campaign sets out to achieve thus impacting the ability of a marketer to measure its level of effect. For instance, Helm (2000: 158) believes viral marketing has a paramount objective to maximise a company’s reach. In contrast, Ferguson (2008:181) outlines that a successful viral campaign will influence, convert and retain new consumers. Accordingly, the purpose of the campaign will drive the metrics used to evaluate its level of success. If the campaign sets out to increase sales, then ROI is a viable measurement tool. On the other hand, if the campaign’s mission was to raise consumer loyalty, then other evaluative measures related to this must be undertaken.
On a practical level, it is evident that a company can ‘isolate the incremental effect’ of word of mouth techniques yet they cannot undeniably tell you that the campaign increased sales or market share (Ferguson 2008: 181). For example, a company like Burger King can measure the number of hits www.subservientchicken.com receives yet cannot definitively say that this lead to an increase in burger sales. What it can rely on is the amazing effect the website had on its main objective; increasing brand awareness. Similarly, Bazadonna (2006: 3) outlines that the current use of ‘hits’ and ‘clicks’ is useful for explaining Internet activity but is not a suitable way for measuring the success of interactive media such as online promotions because these methods cannot be directly linked to an increase in sales or market share.
Given the issues presented above, it is proposed that in order to measure the effect of viral and other online interactive campaigns, companies need to divest from traditional sales based metrics and move towards a focus on other criteria (Cruz and Fill 2008: 747). For example, the lack of measurement methods for online marketing has seen the creation of the Word of Mouth Marketing Association (WOMMA) which was formed to ‘define standards, best practices and metrics for this new discipline’ (Ferguson 2008: 180). Such metrics which have since emerged from this association to help describe the impact of a campaign include ‘WOM units, Polarity, Source Diversity, Clarity and Depth’ (Ferguson 2008: 180). It is yet to be proven in the literature, but it is suggested these metrics could be a good starting point for evaluating the success an activity is having on reaching and influencing the target audience.
It is clear that changes in the current environment have had a huge impact on the way companies go about marketing their products and services. Fragmented media channels and a greater portfolio of marketing and communication tools has meant marketers can no longer rely on traditional channels as they are no longer reaching and influencing consumers with the same impact. This paper has discussed some of the newer forms of marketing activities which companies have used to achieve successful ‘cut through’ including the use of online communities, WoM, viral and interactive communication. It is clear throughout these examples that consumers are no longer passive and require companies to provide more empowering and interactive forms of marketing communication. Furthermore, these examples reiterate the need for companies to focus on knowing the characteristics of their target audience and to ensure marketing messages are tailored to reach these consumers at the right location, and in a form which will be well received. It is also evident that a number of problems exist when it comes to measuring the effect of marketing communications. Rather than rely on traditional methods of evaluation such as sales based ROI calculations, it is shown that companies will obtain more useful information if they choose to focus on metrics that relate to the overall objective of their marketing campaign.
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