5 — One currency: Compare apples to apples as you make trade-offs between instruments

Why does one currency matter?

Marketing mix optimization can feel a lot like travelling in medieval Europe, with its dozens of currencies and unpredictable conversion rates. There are several dozen marketing instruments already – from TV to Twitter – and new ones keep popping up all the time. Many of these instruments come with their own metrics and KPIs (Exhibit 5.1). While media agencies often rely on established metrics like GRPs (gross rating points1) or CPM (cost per mille2) for classical advertising, new media bring their own currencies, such as the number of likes and followers in social networks. To make things worse, a lot of specialized vendors work with proprietary performance indicators. And for some instruments – such as out-of-home advertising – there are no well-established metrics at all, or advertisers just don't track them. As a marketer, you have no easy way of comparing all the different indicators. How do you convert prime-time TV ratings into Facebook followers? What is more valuable, a thousand clicks on a thumb-sized online banner, or a hundred visitors exposed to larger-than-life banners for three hours at a sponsored sporting event?

Chart shows marketing instruments like online, direct, POS, PR/event, and media and their metrics. For own website it is unique visitors, time spent and bounce rate and for Facebook link it is likes, shares, page views, and sentiment.

Exhibit 5.1 Marketing instruments and common metrics.

Source: McKinsey

All this is tricky enough for one brand competing in a single ...

Get Marketing Performance now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.