Year-end planning should include performance measurement. David Sitton, Consultant at The Observatory International, explains why it matters.

Right now, many of us are scrambling to sort out a long list of end-of-year jobs and planning for 2021. One of those jobs on the to-do list for many marketers will be to set up performance measurement schemes for the new year.

These will be designed to shine a light on what has happened in 2020 and the results will help them understand which of their agencies truly stepped up to the plate in the most testing of conditions, and which did not. This will show them where they and their teams performed and what needs to be improved or adapted quickly during these turbulent times. 

Such metrics are hugely important, not least because they can help build a strong relationship between marketer and agency. 

Yet, surprisingly, the research we conducted among ISBA members recently indicated that 15–20% of advertisers do not carry out such work.

That is a huge mistake because, done well, performance measurement sustains relationships by quickly identifying issues and enabling the client-agency partnership to deal with them. Ongoing tracking of trends also provides learning points from past mistakes, which leads to a more productive and constructive relationship.

Not only that, but it also helps brands improve the output of their partnerships. Giving agencies a voice through the same evaluation channels that the client uses promotes a culture of openness and fairness and provides an opportunity to look from the outside in.  

Agency assessment can also highlight operational and behavioural issues that may be imperceptible to those inside the loop. By conducting such assessments across the whole roster, marketers can discover if the issue is just with one agency or if it is endemic in their current ways of working.

The best performance measurement also helps agencies feel like part of the team, by transitioning suppliers into partners who become trusted advisers to your business. Agencies see this process as a commitment to the relationship because it promotes a culture of honesty and integrity and increases trust, transparency and collaboration.

Consistent and regular measurement enables performance to be tracked over time as well as generating reliable, robust and unbiased data to inform ‘payment by results’ mechanisms. Ideally, measurement should take place bi-annually and, where closer monitoring is required, quarterly. 

Just as in any area, however, there are ways of doing this well and ways of doing it less well. The five key principles of world class performance measurement are:

1. Alignment

Ensure marketing and procurement are aligned on the purpose and process of the evaluation and have a performance measurement champion at a senior level to provide credibility to ensure the programme is aligned with business goals and objectives.

2. Independence

Independently managed evaluation processes, managed by a third party, generate unbiased reporting and a neutral line of communication between client and agency. This reinforces impartiality, instils best practice and can provide benchmark and reference scores from similar clients and sectors.  

3. Reciprocity

It’s not about seniority. Holistic feedback from everyone is valuable – especially from those who are most involved. Providing a structured process enables feedback to be collected in an organised way and helps team members feel valued. Marketers must also commit to follow-up sessions to discuss feedback.

4. Commitment to change

To be impactful, evaluations must be more than just a monitoring device, advertisers need to develop action plans with responsibilities assigned and timings for resolutions agreed. Participants will quickly lose motivation to complete the evaluations if they see nothing happening as a result of their input.  

5. Simplicity

Don’t ask unnecessary questions. Use a consistent and purposeful set of questions and keep evaluation surveys as short as possible to encourage a good response rate. Clients and agencies have a day job to do, therefore it is important to keep fatigue low and evaluation surveys short. 

So, when you prioritise your to-do list in the run up to Christmas keep performance measurement high on the agenda. Keeping a finger on the performance pulse will allow you to be agile and adapt with partners and processes for a strong 2021.