Benchmarking is a foundational practice in digital marketing that helps marketers understand their performance against competitors and industry trends and standards. In social media, the practice is critical to understanding a brand’s current performance and a necessary step in uncovering ad strategy weaknesses and strengths.
The challenge of benchmarking today
One important insight that marketing managers are looking for is knowing exactly how much money their competitors are spending across their paid activities. This is particularly important when it comes to data associated with costs and performance.
When it comes to benchmarking costs, marketers mostly rely on historical analysis to scale their advertising budgets and look at their past performance to determine baselines. However, analyzing budget performance just based on internal KPIs associated with it (Return on Ad Spend and Return on Investment) can be misleading and give marketers a false reading of their standing in the industry.
Using benchmarking to maximize business performance
It also opens a door for marketers to diagnose what’s impacting their performance on a deeper level. By looking at what content is working for competition versus their own content, marketers can uncover what’s costing them the most. It’s the next step marketers need to take to identify gaps and opportunities, optimize their content strategy and ad spend, and improve the benchmark results in the long run.
The future of digital benchmarkingThe future of benchmarking in digital will be a real time numbers game - built on data that is timely, accurate, reliable and with a robust methodology. It will leverage the most effective part of social media - the ability to measure all your performance at any given time. For marketing managers, this means they can compare the impact of their advertising spend as new campaigns unfold.
Marketers with access to performance data in paid media will be equipped to make better investments in paid media and demonstrate their ability to manage budgets efficiently. Exactly how fast, how precise and how effective these benchmarks are will be determined by the availability and accuracy of that data.
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