Digital remains the trump card

The key to effective performance management is the link to the actual goal or the desired outcome—which is often sales, leads, and so on. It’s always important to look for genuine improvement—ultimately, ROI is always the incremental improvement, such as revenue, relative to the incremental effort. This should be applied clearly and holistically—and performance should be defined consistently across all marketing channels.

Digital interactions have increased during the COVID-19 pandemic. Is it even possible to filter out marketing-relevant information from this flood of data?

Definitely—but it’s crucial, first, to select the right data that allows for targeted management, and second, to make the best possible use of even imperfect data. There are gaps in digital interactions as well—for example, in the customer journey—and these must continue to be filled probabilistically.

«The most important opportunity lies in shifting the perspective on marketing—no longer viewing it as an indirect cost, but as an investment.»

What data sources are available, and how can they be linked most effectively?

Above all, it is essential to align external sources with internal sources. External sources—such as agencies or online channels—provide important insights into the effectiveness and success of marketing initiatives. Internal sources show how much has been spent and how to evaluate the success of marketing efforts—think of revenue, margins, or customer value. Customer-related data is the linchpin here and must be combined with transaction data.

How can the relevant data collected be used in a targeted manner?

Two approaches are crucial for the targeted use of the data collected: First, it is important to have a clear understanding of the goals and priorities—including how they relate to one another—in order to apply the data in a targeted manner. In the second step, advanced analytics (AI) help identify the most relevant data from the largest possible set of collected data and derive the right insights and actions.

What do companies need to keep in mind in this regard?

Throughout this entire process, it’s important to always maintain a big-picture view and prioritize the company’s goals. It’s also important to ask yourself: How does the data help me achieve these goals in a more data-driven way? The logic behind this is: analyze and understand, test, optimize. Otherwise, you can quickly get lost in the flood of data—which can easily happen when there are too many data points, especially digital ones. In addition, data protection is, of course, an important issue that must always be taken into account.

What impact does data-driven performance have?

Traditionally, data-driven marketing can increase the efficiency and effectiveness of marketing by 10 to 25 percent. This means achieving the same results with less spending, or greater results with the same spending. Above all, the question is: How much should I invest in marketing, in which tools, and for which campaigns—all the way through to optimizing creative content and improving the customer experience.

What are the challenges?

Common challenges in this context include, for example, having too much data or incomplete data. Allocation along the funnel—which becomes more difficult the higher up the funnel the activity takes place—can also cause problems. Then there is the skepticism toward data-driven answers and modeling; or data protection, for example, in online measurement and personalization. In addition to the classic technical and analytical challenges, challenges often arise in the way teams collaborate. Marketing performance cannot be managed in silos—these must be overcome through an integrated management approach within a more agile collaboration model!

And where do you see opportunities?

The most important opportunity lies in shifting the perspective on marketing—no longer viewing it as an indirect cost but as an investment—and managing these investments in an integrated manner. Marketing is thus no longer merely a «leftovers in the planning» but a core variable in a company’s investment decisions: How much do I need to—or want to—invest to achieve a certain level of revenue? How can I focus my activities on what makes the most sense? How can I best personalize communication for the customer?

Are there differences between B2B and B2C?

Of course, there are differences between B2C and B2B, but generally fewer than you might think. First of all, the goals are traditionally different: B2C tends to focus on revenue, while B2B often focuses on leads and customer lifetime value. In addition, different channels are often used—for example, Instagram versus LinkedIn. However, the basic logic of data-driven marketing applies to both—even if B2B has typically lagged behind a bit historically.

What about data protection—are there markets or countries where data-driven performance doesn't work as well as in others?

Data protection is an important issue that has a major impact on what we can measure and activate—and for good reason. The issue is addressed to varying degrees in different regions—in Europe, for example, more so than in the U.S. But many aspects are becoming increasingly similar, both in terms of regulation and technology. Fundamentally, data protection must, of course, be taken very seriously and forms the basis for data-driven marketing. Not everything will be measurable anymore, and we’ll have to shift—once again—from deterministic to probabilistic marketing. This is where the traditional (probabilistic) world of marketing and the (deterministic) world of performance marketing partially converge. In any case, first-party data is becoming increasingly important—that is, data that can be used with the customer’s consent and that helps fill in the gaps and improve predictions.

Will the trend toward digital marketing continue even after the pandemic? If so, why?

Yes, this trend will continue. The pandemic served as a catalyst for the general trend toward digitalization in many sectors. We don’t see a major shift back from online to offline—rather, online continues to grow, while offline is also rebounding after the decline during the pandemic.