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Measuring What Matters

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Here’s something I just don’t get: Why are so few retailers using sales increases to measure their mobile advertising return on investment?

Maybe it’s human nature; we are comfortable with the familiar. I get that — old habits die hard. But businesses sometime die hard too, like when their competitors use new technologies that give them an edge.

An example of just such an edge is the recently available technology giving retailers the ability to measure mobile ad spending success where it really matters: sales lift. Not just measuring “impressions,” “clicks” or “store visits,” but actual sales, measurably tied to their mobile campaigns.

Investing confidently

To justify any ad spending, you need to see that a campaign is giving you adequate bang for the buck. Across the mobile media industry, service providers are scrambling to provide this — to invent the latest, greatest, sexiest measurement of mobile ads — but only a handful of companies are able to actually deliver meaningful measurements.

Clicks and store visits are interesting data points along the path to purchase, but they shouldn’t be used to justify your ad spending. You most likely measure your other media based on return on ad spending — how much incremental sales lift the campaign produces. Why shouldn’t you use that same benchmark for measuring mobile advertising? Once you understand the returns of your mobile advertising, you can invest confidently in the mobile buys that prove profitable.

Retailers must measure true ROI so they can finally catch up to the fast growth of consumer mobile adoption. Today, 54 percent of U.S. consumers say the first thing they do upon waking is check their mobile phone, and 84 percent of all shoppers use their mobile devices to help them shop while inside a store.

In spite of this, businesses are still focusing on taps, clicks and app downloads.

A ‘holistic view’

Face it: The only thing that will truly ignite your mobile advertising is your ability to measure actual online and offline sales lift resulting from customer exposure to mobile ads. That’s what really matters. Anything short of this will fail to give you the confidence you need to make mobile advertising an integral part of your comprehensive advertising plan.

Are you nodding in agreement? Then I encourage you to demand nothing less than measuring actual sales lift to justify your ad spending.

With this as the new paradigm for accurately defining ROI, be wary of companies claiming to make mobile measurable. Make certain that they not only measure sales lift at the cash register, but that they measure precisely. Many vendors can tell you how many people visited a store after seeing an ad, but if visits increase while sales fall, is this ad worth your investment? Of course not.

One vendor with a new measurement suite recently said in the Huffington Post, “With the right type of tracking in place ... eventually, we will be able to tie everything together and provide a holistic view of the impact a single mobile ad made on the entire purchasing process.”

Eventually? Forget “eventually” — the technology already exists!

Don’t wait. Measure what matters — actual online and offline sales lift — and know what you are getting in return for your ad spending.