In the realm of digital marketing, companies that excel often share common characteristics. They recognize the significance of monitoring the success of their online marketing endeavors and allocate resources to continually enhance the performance of their digital channels.
The term "web analytics" has emerged to encapsulate this crucial digital marketing activity. A web analytics association, comprised of vendors, consultants, and researchers in this field, has been established to advocate best practices. Their definition of web analytics underscores its importance:
"Web analytics is the measurement, collection, analysis, and reporting of Internet data for the purpose of understanding and optimizing web usage."
To thrive in a methodical approach to enhancing results in Internet marketing, organizations should establish four key prerequisites. These include defining appropriate improvement measures, acquiring the right tools, and implementing management processes. These processes entail regular staff reviews of results, followed by adjustments to marketing activities.
Performance management in the digital landscape
To achieve improvements in any facet of business, performance management is paramount. It involves processes and systems designed to monitor and enhance organizational performance. In the context of digital marketing, understanding the current improvement process and identifying organizational barriers is a crucial starting point.
Three critical elements of an Internet marketing measurement system are:
- The Improvement Process: A well-defined process for enhancing performance.
- The Measurement Framework: Groups of pertinent digital marketing metrics.
- Tools and Techniques: Evaluation of the suitability of tools for data collection, analysis, dissemination, and action.
Definition of performance measurement
Performance management hinges on the process of performance measurement. The essence of this process is encapsulated in the following definition:
"The process of assessing the efficiency and effectiveness of past actions through data acquisition, consolidation, analysis, interpretation, and dissemination."
Performance management extends this definition, emphasizing analysis and actionable change to drive business performance and returns. Online marketers can apply many aspects of business performance management to digital marketing since performance is predominantly measured through information on process efficiency and effectiveness.
Overcoming organizational barriers
Structured performance management processes are indispensable when considering the consequences of lacking one. Failure to implement an effective performance management system can result in a range of issues, including misalignment with strategic objectives, data inaccuracies, and missed opportunities for corrective action.
Barriers to improving measurement systems, as identified in research, include:
- Senior Management Myopia: Failure to prioritize performance measurement, misunderstandings, or targeting incorrect objectives.
- Unclear Responsibilities: Lack of clarity in roles and responsibilities for managing and improving the measurement system.
- Resourcing Challenges: Inadequate time, technology, and integrated systems.
- Data Issues: Overlays or poor-quality data, limited benchmarking data.
In a survey conducted by the Web Analytics Association, challenges in performance management for digital marketing were highlighted. The top challenges included data actionability, analytics-driven decision-making, handling social media, garnering management support for web analytics, and taking action based on data.
A structured measurement process with four key stages is essential to overcome these hurdles:
1. Goal-Setting: Define the aims of the measurement system, aligning them with strategic digital marketing objectives.
2. Performance Measurement: Collect data on various metrics as part of the measurement framework.
3. Performance Diagnosis: Analyze results to understand variance from objectives and identify marketing solutions.
4. Corrective Action: Implement solutions as updates to content, design, and marketing communications.
This continuous cycle repeats, possibly with modified goals, ensuring that your digital marketing efforts are constantly optimized for success.
Adapted from: Chaffey, D. and Ellis-Chadwick, F., 2012. Digital marketing: strategy, implementation, and practice (Vol. 5). Harlow: Pearson.