Blackwood Seven Support

In our platform (and indeed in our AI framework), we distinguish between "Objectives" and "KPIs". Please see the definition and use of each below.

Objective

The objective is the marketing planning metric that you are looking to increase from your paid media investments. It is the metric that you as an organisation measure business success on from a marketing perspective. Subsequently, it is also the metric that we model to be able to help you increase it.

This could for instance be actual sales, leads or subscriptions for which there is a distinct count (a distinct and countable transaction). This is not to be confused with e.g. revenue and/or profit. These are metrics that express the monetary value of the units counted for the objective.

Example: as a company you have the objective of generating as many subscriptions as possible for a given product or service. Each subscription has a monetary profit margin of 50$. When planning a campaign you aim to generate 1.000 new subscriptions (your objective). If successful, you reach your target of 1.000 new subscriptions which in turn yield a revenue of 50.000$.

KPI

KPI or Key Performance Indicator is defined as just that; an indicator which lets you understand how well you are performing in reaching your objective targets. The defined KPIs that we provide are:

• Media Investment (how am I tracking actual investments vs. budget?)
• Media generated sales (how am I tracking actual sales vs. target?)
• Media-generated profit (what is the monetary profit value of my media-generated sales?)
• CPA or cost per action (what is the average media investment per sale generated?)
• ROI or return on investment (what is the ratio of media generated profit to media investment?)

Why we do not support having a monetary value (such as revenue or profit) or "branding" as your objective?

In theory, you have only the objective of generating as much revenue and/or profit as possible. And indeed, this is the final overall objective of many organizations. You could also - which is quite common in marketing organizations - have "branding" as your objective. But these are not very useful as marketing objectives, as you would have a hard time optimizing the efficiency of your media investments.

This is because both profit margins and branding figures are dependent on many factors (both internally and externally) that marketing is not able to influence or control, making it difficult metrics to optimize directly through media investments. You need an intermediary marketing planning metric that paid media investments can influence directly (and that we are able to isolate properly), such as sales, leads or subscriptions, to optimize your investments.

Example: if your objective is profit, your media-generated effect would provide only a profit figure without you knowing how many sales, leads or subscriptions helped generate this figure. But as your media revenue/profit could fluctuate considerably due to other factors than how you planned your media investments, it becomes impossible to consistently track the efficiency of those. Subsequently your media generated effect would be identical to your media-generated profit and your CPA would not be cost per sale but cost per dollar earned in profit. Also, optimizing only on your profit, would make it impossible to influence your market share through media investments, as increasing market share might sometimes mean increasing sales beyond what is most profitable (generating sales beyond the point of diminishing returns).

Example: if your objective is "branding", we would need to associate some kind of metric to that notion, that could be used for model optimization. This could for instance be awareness %, NPS or similar. But once again, this metric would be very dependent on many other factors than just the effects of paid media investments (such as, product characteristics, service levels, social media "shitstorms", positive/negative PR, social responsibility policies etc.), making it very hard to optimize these as well as achieve your objective targets through efficient paid media planning only. Not only that, but we would not be able to provide you with ROI and profit KPI metrics unless there is some sort of monetary value associated to uplifts in "branding". And figuring out the immediate monetary value of "brand uplift" would once again require some sort of intermediary metric such as sales or similar.

Note: This does not mean that you can not optimize the increase in your objective, such as sales, while at the same time staying as profitable as possible. The KPIs of media generated profit, Media ROI and CPA are all included when predicting future activities giving you the option to activate investment plans where you optimize your sales, while staying as profitable as possible.

This also doesn't mean that we can not quantify the impact on sales coming from your branding related activities. Only, this impact is given as a positive (or negative) contributing driver to your total sales (not attributed directly to media investments), on the same terms as e.g. product pricing, internal and external events etc. So, for any given period, you can track the impact on sales, from factors impacting your brand (if you provide the data needed to attribute this in the model)