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.
A key challenge that marketers confront today is having access to timely and accurate data within industries, regions and industry competitors. While there are multiple industry reports available from specialist agencies, much of the data needed for efficient benchmarking in social media is highly dependent on access and timely release.
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.
One of the main drives for benchmarking paid media is a lack of deeper, insightful understanding of budget performance. Access to this data helps marketers place their efforts against the brand competitors; knowing the average industry or regional rates for CPC, CPM, CTR and other paid media KPIs can aid them in securing higher paid media budgets.
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 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.