Agency clients’ KPIs evolve with a focus on retail and post-pandemic economy

The way agencies deliver performance metrics is shifting, as brands seek to expand in retail media and shift priorities following the pandemic.

In some ways this was inevitable. As the continual digital transformation shapes advertising, clients are asking for different metrics to reflect trends ranging from immersive and social content to connected TV. And with the pandemic continuing to impact consumer trends, agencies and brands are finding that they need to reprioritize some metrics that faded into the background over the last few years.

Where previously an agency’s KPIs might have emphasized return on ad spend or click-through rates, now firms are exploring other kinds of metrics with their clients. Amy Lanzi, COO of Publicis Commerce, explained that there has been a recent shift from measuring return on ad spend or investment to looking at new-to-brand and lifetime value of a customer.

“Early days it was very much about ROAS … something we need to really move beyond,” Lanzi told Digiday. “Because if you think about how much the general world has changed in the role of consumers, some people are buying things on digital shelves and [then some are] actually buying something in a physical store.”

Moving beyond ROI

This doesn’t mean ROI isn’t important anymore, but it is about going beyond that to understand “total sales and however your client wants to talk about that,” Lanzi added. “But I would say that in the last month, there has been a definite tempo change from our clients, particularly around the metric of new-to-brand.”

Especially when it comes to a digital marketplace such as Amazon or Instacart, clients want to know if investing in a virtual shelf will bring new customers. New customers mean “new pathways to get a new sale,” Lanzi said. Within retail media, this is where her agency is focusing on new-to-brand and incrementality as KPIs, which tell clients that they might get a new consumer that only buys through that marketplace.

Within commerce, Publicis is also expanding data on multi-touch attributes, said Paul Williams, head of commerce product strategy at Publicis. Williams said the agency is partnering with Amazon’s ad tech team to build a joint product with the aim to measure multi-touch attribution, which has ebbed and flowed in interest over recent years, but again seems to be gaining client interest.

“[Clients] started thinking more holistically about investing in different channels and how to media-mix and model out how commerce plays a role against some of these other markets, familiar channels that they’ve been running media against,” Williams said. “There’s a lot of the original kind of performance marketing lanes of social search and programmatic that are starting to leak into the commerce space.”

For example, Amazon by default gives all the credit to the last touchpoint from a user, so a sponsored product ad gets 100% of the attribution. But Amazon and Publicis are now “infusing different data sets” (such as from Amazon Marketing Cloud), to split the sale credit across multiple touchpoints, Williams explained. This means marketers can ultimately get a better sense of upper- versus lower-funnel performance.

“So kind of just one example of how we’re really trying to dial into some of the more advanced KPIs we’re getting asked from clients,” Williams said.

Lanzi added, “I think we’re seeing more pressure from clients related to retail media — big players asking for more and more dollars, who don’t have more and more dollars to spend. So they’re very much interrogating what this looks like from a measurement standpoint.”

Bringing together new and old data

Michael Solomon, COO of PHD USA, part of Omnicom Media Group, also said he sees retail media influencing the KPIs that clients seek. Solomon agreed that there is a desire to move beyond ROAS and media mix modeling (or MMM) data. There are more advanced tools and a plethora of data available, which enhance the way agencies can collect and report measurement.

The KPI evolution also varies based on how a client uses data in their organization. “There’s a lot of clients or a lot of different kinds of journeys in the sense of how they use data inside of their organization. But you are seeing some of those walls and some of those silos [break down],” Solomon added.

There is a move toward this holistic data, including marketing and performance analytics and other consumer data in other parts of an organization, that together paint a richer picture of the business outcomes. As Solomon noted, “It’s all data that’s existed, but you now have the stitching of it starting to really come together.”

David Matathia, head of strategy at independent media agency Fitzco, noted that recent years have also brought about a shift from focusing on performance metrics during the pandemic to reprioritizing some previous metrics, such as brand awareness and attributes.

“In 2023, everyone that spent the last couple of years really rotating towards performance marketing, this need to drive demand coming out of the pandemic between isolation and supply chain issues and business drying up,” Matathia said. “Everyone just went after the next most efficient buyer and shopper I can find.”

Matathia said recently Fitzco has seen more refocusing on top-of-funnel measurement, with client discussions going back to measuring brand awareness metrics.

“How are just good old-fashioned awareness metrics moving?” Matathia said. “It’s not necessarily that the metrics are new. I just think it’s a refocus and a reprioritization on some of the more traditional brand metrics that people have lost sight of, in a time when they were so focused on the bottom part of the funnel.”






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