Tech & Trends

You can’t achieve the right business outcomes without the right measurement

Nordstrom VP of Marketing, Digital, and Enterprise Data Jason Gowans explains how to move past marketing buzzwords and rethink your approach to achieving a better measurement strategy and greater growth.

I’ll be the first to admit I’m skeptical about anything that sounds like marketing jargon. I’m a numbers guy. If you can’t measure it, you can’t do it. So, some years back, when people started talking about organizing their brand around the customer, I thought, “Yeah, but what does that actually look like?”

Fast forward to today: We’ve turned that jargon into a reality. Because at Nordstrom, we put the customer at the center of everything we do, and it’s reflected in how we operate.

To explain how we did it, let’s travel back to 2016. In fashion, it was a great year for pantsuits and off-the-shoulder everything. For us, it was the year we began to re-evaluate how we measured success, with the goal of driving stronger outcomes for our business. Through data, we were able to identify the opportunity to evolve how we defined success.

Our data showed us that our marketing expense was outpacing our sales, and our rate of customer acquisition was declining at the same time, ultimately, driving the wrong outcomes for our business.

To combat this, we first had to look internally and put the customer at the center of our decision-making. Here’s how we organized our brand around the customer to measure what really matters.

Ditch the silos to uncover growth

Is your organization set up to give you a holistic view of the customer journey, or are your teams siloed by channel? If your answer is the latter, I can guarantee you’re getting a fractured understanding of your customer, and you’re not set up to measure for growth.

We had siloes of channels and siloes of merchant activity. As a result, we were miscalculating our value back to the business.

At Nordstrom, our marketing and analytics teams were organized by search, display, social, and email. Plus, we looked at each merchant within our brand portfolios separately: Nordstrom Rack versus versus brick-and-mortar stores. We had siloes of channels and siloes of merchant activity. As a result, we were miscalculating our value back to the business.

What did we do? We restructured our internal teams so that we were organized around our customer profiles. At the highest level, our business goals are to attract new customers and nurture existing customers, regardless of channel or merchant. Rather than individual channel teams, now we have two marketing teams — a customer acquisition team and a customer retention team.

Acquisition is about profitably investing for the future. For us, that means having a curated point of view on what’s next and how we can reach a new generation of customers. Retention is all about growing the lifetime value of current customers by increasing trips and spend. For example, we wanted to ensure our Nordstrom Rack customers had visibility to the sales promotions of our full-price channels. So during our anniversary sale, we encouraged our off-price Rack shoppers to consider our full-price product offerings.

Let measurement signals lead the way

The state of marketing today is too complex to rely on one, single measurement solution. That’s why the path to a better measurement strategy involves multiple solutions and customer signals. This gives you a holistic view of the customer and helps you better understand the effect of incremental marketing.

We fell into a trap many brands do by measuring marketing effectiveness solely through last-click return on ad spend. That skews investment to existing high-spend customers and sometimes even our own employees.

I’ll give you one example: In the past, when a customer made an order via last-click measurement, we would give all the credit to one particular affiliate publisher. But when we built our own multi-touch attribution (MTA) solution, we learned that some of that credit went to other affiliates, some of it went to other marketing channels, and some of that credit was attributed to our estimated baseline propensity of the customer to shop with us anyway, independent of marketing. Essentially, there was only a tiny slice of credit that was actually deemed incremental.

This was a huge a-ha moment for us. These days, we use four key signals to measure marketing effectiveness: a media mix model, MTA, last-click, and experimentation.

But these signals don’t provide the prescriptive answer of how exactly to move forward. This is where the expertise of your team comes in. They can use their judgement to determine what actions to take to drive growth based on the business outcomes you’ve all agreed to pursue. Judgment becomes even more important when we consider the shifting landscape around things such as cookies and their impact on our ability to collect a complete picture of marketing activity.

With potentially tens of millions of customers and prospective customers, it’s important to know what really drives customer lifetime value beyond the obvious trips and spend. Perhaps it’s introducing the customer to a new category or new brand or encouraging the customer to try a Buy Online-Pickup in Store feature, engage with a stylist, enroll in a loyalty club (like our Nordy Club), or even download your app. Being able to assess the value of each of these potential actions will help drive not just your marketing campaigns but also how much you’re willing to pay for any one of those actions.

By reorganizing around the customer, we have moved from a mindset of last-click return on ad spend to one of incremental marketing. As a result, we’ve bent the curve on our marketing model. Expenses are now in line with sales, efficiency has increased, and our rate of acquisition has gone up.

Posted by AdminV

Sparks fly when creative and media come together

Like me, people are jumping seamlessly from channel to channel and researching more, often in unexpected ways. This explosion of consumer touchpoints means more advertising opportunities — and more complexities — for marketers.

The brands and agencies I work with every day are tackling this complexity by bringing media and creative together to anticipate what matters to people and help shape their customer journey. Here are three ways I see them finding success.

Using rich signals to inform creative and media

Smart advertisers are using signals about viewers’ intent and context to inform not just who they talk to, but how and when they do so. A great example is this year’s YouTube Works Grand Prix U.S. winner, Xfinity Mobile. In a competitive category and cluttered market, the brand and its creative and media agency partners cleverly incorporated signals into the creative itself. The ads showed viewers how much it would cost to stream the video they were about to watch on their current mobile plan. The teams made use of signals like content type, file size, wireless carrier, and whether or not the viewer was on Wi-Fi.

In a deep-dive article on the campaign, I was struck by this insight from Kim Thompson, executive VP at Spark Foundry, the agency that worked on the campaign. “In today’s world, it’s as much about data as it is about a good idea. There is a symbiotic relationship between creative and media. Without having credible data, you may not see the success you want.”

When you get to know your audience on a deeper level … you can uncover unexpected insights.

In the end, these relevant, eye-opening ads created a sense of mass intimacy with the audience, helping the brand acquire thousands of new customers.

When you get to know your audience on a deeper level and understand who they are and what matters to them, you can uncover unexpected insights and reach them in moments when they’re most engaged and receptive.

Orchestrating a breakthrough story

Marketers can reach people more frequently than they ever could before. But seeing the same ad over and over again can be grating for viewers, especially now that they’re so accustomed to watching entirely on their own terms.

One way around that is through a tool called video ad sequencing, which allows marketers to serve up a series of ads in the order they choose, delivering repetition through variation, not redundancy. This is an opportunity for advertisers to tell stories that match how people watch today — and is a uniquely rich canvas to bring media and creative to life in effective ways

Research shows that sequenced storytelling that combines multiple creative formats boosts message retention compared to using a 30-second ad on its own.1 Brands like Adidas and 20th Century Fox are using sequencing to push the boundaries of their storytelling — and seeing record business results.

Optimizing creative based on marketing objectives

When media and creative are in lockstep, campaign creative can be optimized based on best practices for the platform and even for specific marketing objectives, which ideally ladder up to business objectives.

For example, when your media and creative teams know that the main goal is to, say, drive awareness, you can ensure the ads you’re creating follow best practices by including your brand logo within the first five seconds. You better believe this product ad from Lululemon caught my eye in the weeks before my friend’s birthday, even though I wasn’t specifically looking for men’s yoga pants.

In a recent study done in partnership with 4A’s, we analyzed beauty campaigns and found that when ads are created with a specific marketing objective in mind, results are supercharged, and have a 2X higher lift in the later stages of the purchase journey.2

Game-changing opportunities to breakthrough

It’s no longer enough to have a great media plan and a great creative concept. To anticipate what matters and reach consumers on their terms, advertisers will need to treat their media and creative as one, ensuring they complement one another. In working with brands and agencies, I not only know that it’s possible, but that it will help you create game-changing, breakthrough creative.

Posted by AdminV

Use video to drive results across your entire marketing funnel

Video campaigns provide many new opportunities for performance marketers to test and optimize in real-time. David Rodnitzky, CEO of 3Q Digital, shares ways to get started.

Last year, I made my case for performance marketers to take online video more seriously. Digital video, I wrote, is just as effective as the most bottom-of-the-funnel search engine marketing campaign. In short, video has significantly more potential than brand awareness.

Even if people don’t take direct action immediately after seeing a video ad, there is still a halo effect associated with video.

For example, we’ve seen recent cases in which videos meant to drive upper-funnel results increased conversions at the bottom of the funnel. In other words, even if people don’t take direct action immediately after seeing a video ad, there is still a halo effect associated with video.

An insight like this shows us that performance marketers have an edge in video advertising. We have a built-in instinct for seeking out KPIs that signal the real impact on our bottom line, like clicks and conversions. When applied to video marketing, that instinct can lead to better success at every stage of the funnel.

Today performance marketers have even more tools at their fingertips to test and optimize in real time, which means new opportunities to make the most of your digital ad dollars. Here are three ways better measurement, brand insights, and creative testing can boost success metrics in your next video marketing campaign — and win over new customers.

Understand the connection between upper-funnel video and search

Efficiency is an obsession for performance marketers. We’re always looking for new ways to do more with less, making sure we’re investing our resources in the channels that are most effective for our business.

That’s why it’s important to understand the growing connection between video and search. Eighty percent of people say they typically switch between online search and video when researching products to buy,1 meaning upper-funnel videos can lead to better performance for your search campaigns.

We tell our clients at 3Q that it’s worth investing in YouTube campaigns for this reason. CuriosityStream, an entertainment and educational video content site, has reported 32% lower search cost per acquisition when people watched a YouTube ad. This trend is consistent with Google research that shows that, on average, advertisers who run YouTube video ads in addition to Google Search ads see 3% higher search conversion rates and a 4% lower search CPA compared to advertisers who run Google Search ads alone.2

The takeaway is clear: Leaning into video marketing can lead to decreased customer acquisition costs, allowing performance marketers to reinvest those dollars into the channels that drive the most results.

Unlock growth opportunities with brand insights

Contrary to popular belief, brand insights like consideration and awareness aren’t just vanity metrics. When interpreted correctly, they can contribute to improvements toward the goal of the campaign.

At 3Q, we’ve written about the many new advantages that come with YouTube Brand Lift Study 2.0. Features like real-time results have helped our clients make smarter budget decisions with ongoing campaigns, boosting efficiency and serving that ultimate performance goal of doing more with less. For example, consumer genomics company Helix used Brand Lift 2.0 results to rework their budget mid-campaign and saw 2.3X higher consideration lift.

In short, brands that undervalue brand insights are leaving money on the table. These sorts of metrics can unlock tremendous value for performance marketers, and help brands better understand which creative resonates most with their audiences at each stage of the purchase journey.

Data’s potential for informing better creative and campaign strategies is now being used by marketers in every industry.

Take advantage of creative experiments

Gone are the days when we had to convince our creative teams that data is their friend, not their enemy. Data’s potential for informing better creative and campaign strategies is now being used by marketers in every industry, and performance marketers can get in on the action with experimentation and testing.

Data and machine learning are especially useful for helping marketers fine-tune their creative and media decisions. Bumper Machine, for example, is a machine-learning tool that can grab the most eye-catching parts of a longer video (like faces, brand name, product, or movement) and cut it into a sequence of six-second bumper ads.

Since shorter ads can help brands tell a story over time in nonintrusive, bite-sized clips, those small ads have big potential. In a study conducted by Ipsos, a video ad sequence of three six-second ads had a significantly higher impact than single 30-second TrueView ads on ad recall and purchase intent, with an increased average lift of 107% and 134%, respectively.3 Our teams have been impressed with the output of Bumper Machine, and initial testing is showing strong results.

Video has always been an effective channel to drive awareness, but performance marketers shouldn’t stop there. Embrace the power of digital video to boost efficiency in the short term and lay the foundation for growth in the long term.

Posted by AdminV