Insurance marketers, it’s time to re-evaluate your KPIs
With the impending death of cookies, traditional KPIs are also dead, but don’t worry – brighter days are ahead! Or so says a recent article in AdExchanger: Yes, Everyone’s KPIs Are Screwed, But It’s Going To Be OK, by Julian Baring of AdForm.
The author’s key point is this: with all the changes happening in digital advertising technology – from a greater focus on user privacy and control, to cookies and ad IDs going away, to the ever-growing types and amount of data available to advertisers for segmenting and targeting audiences – the landscape is changing incredibly quickly. And the best way for marketers to adapt to these changes is to acknowledge that their traditional KPIs, including unique impressions, clickthrough rates and conversions, are things of the past. In other words, it’s time to focus on new ways to measure success.
As a member of Arity’s Marketing Solutions team, I couldn’t agree more. Arity offers the world’s largest driving behavior database for targeted marketing, sourced from nearly 100 million drivers. And advertisers can now use this unique data not only for segmenting and targeting, but also as a new lens on KPIs to determine long-term success. Additionally, as more consumers get savvier about who they share data with and how they want their data to be used, advertisers will need to think outside the box about how to find and connect with their best customers — and how to measure success.
I believe this is a great time for insurance marketers to take a look at their KPIs and the types of data they’re using to connect with new customers. Historically, insurance marketers relied on proxy data to target some of their best potential customers: good drivers. These proxies included credit scores, home ownership and home address. In the past, there was no way to target drivers based on their actual driving behaviors, just an approximation of who might be the best customers out there.
But now, insurance marketers can leverage unique driving data at massive scale about how and where people drive to target the best drivers with ads and offers. These excellent drivers are statistically likely to become the most profitable insurance customers who have the fewest accidents and cost the least money. The very best drivers on the road have up to a 5x Customer Lifetime Value compared to average drivers, so these are people insurance marketers should be spending more to reach. Suddenly, insurance marketers have a way to determine up-front how to prioritize marketing budgets to reach people based on how they drive, which is a game-changer.
What this means for insurance marketers is that instead of focusing on short-term campaign metrics like clicks and conversions, they should be collecting data on how new customers perform over time, using benchmarks like profitability and lifetime value. By tracking this information over months and even years, insurance marketers will get a true understanding of the value of new customers, and be empowered to make data-driven decisions up-front that will result in long-term gains and the strongest book of business for their company overall.
So, as the AdExchanger article points out
, marketers may need to adjust the KPIs they’re using to measure the effectiveness of their campaigns. The very best drivers are often not looking to change insurance companies, so are less likely to click and convert. They may be a bit more expensive to reach and to get through the funnel – but they’re also much more profitable customers down the road, with a lifetime value many times that of average drivers. So instead of clicks and conversions as measures of success, insurance marketers should be looking at metrics like overall profitability, customer lifetime value, and retention.
To wrap things up, I’ll share a key quote from the article that resonated with me: “Most important of all, seek to get as much granular data as you can now and into the future, so you don’t just take your partners’ word for campaign success. Accessing log-level data and then mining that data now and continually over the next 18 months will give you the raw insights to revalidate campaign effectiveness.”
So, while change can be scary, there’s great value in embracing new data and strategies now in order to get ahead of the digital advertising curve.