Marketers are measuring more of their activity today than ever before. With an increase in measurement comes an increase in results (well, at least we hope so, right?). But what if we as marketers aren’t measuring the one thing that can have a large impact on our ROI?
You are likely familiar with the famous words of John Wanamaker, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Looking at the returns marketers have come to expect on their marketing efforts, it’s become clear to me that we are in-part focusing on the wrong metrics. Don’t get me wrong, I think it’s very important to measure reach and conversion rates, but when you are achieving click through rates of 1%, clearly, there is room for improvement.
I believe one of the metrics we should be focusing more of our attention on is how we can reduce our marketing waste. Since our waste tends to be significantly larger than our productive activities, we can create more value by reducing our waste than by increasing our productive activities.
For example, if we are digital marketers and we focus on increasing our productive activities, we might aim to increase our CTRs by 10% (ie from 1% to 1.1%). However, if we focused on how we can reduce our waste by 10% (ie from 99% to 89.1%), we would improve our overall returns by 9.8%.
So, what do you think? What can you start doing to measure and reduce your waste?