In the digital world (as in traditional marketing), agencies dominate the landscape. In our client-base (which is heavily weighed to the very large enterprise), the typical customer has many agencies. Even where our clients have a large “Agency of Record” relationship, there are often multiple smaller relationships or even multiple agencies of record across either channels or significant business units that somehow sneak into the picture. Most of our clients have an SEO Agency, a PPC Agency, and a Digital Agency for their Website, not to mention a host of alternative agencies for specialized tasks like video, Test&Target, email, database marketing, etc.
There are perfectly good reasons for this rich mixture – not the least of which is that no single Agency is generally the best choice across different areas. Web creative and PPC management are fundamentally different skills and it’s a rare agency that does both well, and let’s not even mention areas like Database Marketing that are as mysterious to most interactive agencies as the mathematics of quantum physics. Even within narrow areas like Search, it’s rare to find an agency strong in both paid search management and natural search optimization.
While multiple agencies do frequently make sense, the way companies have chosen to handle measurement across those agencies doesn’t. Digital is a supremely measurable channel. It’s a channel where careful, unbiased and aggressive measurement is the key to success. Unfortunately, that’s not what most companies get.
The vast majority of companies have become heavily dependent on their agencies to provide basic program measurement and reporting. Many companies buy Web analytics from their interactive agency. Nearly all get their PPC reporting from their SEM Managers. Most rely on their SEO teams for natural search. Almost all rely on their T&T vendor for testing results. Etc. Etc.
Relying on your agencies to measure themselves is a terrible idea. Why? Let me count the ways.
Most agencies are very poor at measurement. The culture for a great interactive shop (heaven knows!) is not the culture of great measurement shop. The skills necessary for SEO optimization aren’t the same as those for careful reporting. When you rely on your agencies for reporting and measurement, you’re nearly always paying for inferior measurement.
And yet, if inferior measurement were the only problem it might still be worth it for the convenience of one stop shopping. It’s not the only problem. Siloed measurement by channel inevitably leads to optimization mistakes and reporting that overstates (often grossly overstates) the success of each channel. Senior Management, faced with a multiplicity of channels all of which report dramatic marketing success in the face of relatively stagnant business numbers will quickly learn to dismiss or discount all the measurement and analytics they receive. You can damage the credibility of an entire analytics program simply by allowing siloed reporting of marketing performance.
Siloed measurement is bad, but the biggest problem with agency self-reporting is simpler and even more obvious – it’s bias. In a world where there are lies, damn lies, and statistics, why would you let your Agencies measure their own performance? If you’re agencies are siloed, they have every incentive (and ability) to make their channel look maximally successful. If you’ve concentrated everything in a single agency, that agency has every incentive (and ability) to make their entire program look successful and not delve too deeply into any single piece.
It’s hard enough to tell the truth in measurement even when you have no stake in the programs or budgets or work that you are analyzing. It’s impossible when you have that stake. It’s not just a matter of bad faith (though bad faith can certainly exist) – the desire to find the answer you want is inherent and powerful in all of us.
Inferior measurement cultures and tools, narrow and siloed views of the customer, and self-interested bias in analyzing and interpreting the results add up to bad measurement. In many cases, they add up to really bad measurement.
As our business at Semphonic has grown, we’ve realized that there is a role for an analytics company that transcends the traditional niche of Omniture, of Excel Reporting, and of classic analytics. Increasingly, we see our clients relying on us to provide an independent measurement voice across their entire digital marketing effort. It’s an even bigger bonus that we’re a measurement company deeply versed in the concepts of customer database marketing that are increasingly driving digital marketing efforts.
We’re not the only ones seeing that. In the last few months, I’ve been working with Bob Heyman (Managing Director at the Digital Engagement Group) on a more formal program to provide that agency watchdog role. Bob’s got a distinguished agency background in the digital space (he’s the guy who invented the term Search Engine Optimization). He’s also done something I’ve never quite managed to do; namely, produce a couple of outstanding books. In fact, it was our discussions around his latest book Marketing By The Numbers (How To Measure And Improve the ROI Of Any Campaign) published by the American Management Association, that got us both thinking about the whole idea of an Analytics Agency of Record program.
So we’ve combined forces to create an offering that combines Semphonic and Digital Engagement Group into a cohesive Analytics Watchdog program across a broad range of Digital media. It’s a program that covers everything from careful audits of the measurement infrastructure, to reviews of the Agency reporting you receive, to setting the proper success metrics for your Agencies to measure themselves by, to driving best practices in and across channels. Our goal in this offering is to create a measurement relationship with ABSOLUTELY NO STAKE IN ANY MARKETING PROGRAM OR BUDGET DECISION. That’s the way measurement should be. I really do believe that digital measurement is just too important to be left to the wolves.
Bob’s joining me to talk through the whole concept of an Analytics Agency of Record in a webinar near the end of this month (free of course). We’ll cover why we think it’s necessary, what it takes to create one, and why you should be thinking about it right now. Bob’s perspective from the Agency side (and what it takes to have healthy Agency relationship) and my perspective from the measurement side are a terrific combination around this particular topic. I hope you’ll join us!
I also wanted to mention a survey we’ve been running (and I’m about to close down) that covers various approaches to Digital Analytics Warehousing. If you’ve been involved in a sizeable Analytics Warehousing project, I’d love to have you take the survey. Here’s a link – it’s about 20 questions – and if you provide your email we’ll include you on the final results. It’s heavily focused on the total costs and effort required for various approaches to analytics warehousing (of which there are a plethora). Appreciate the help!