We talk a lot about the importance of collecting, analyzing, interpreting, and sharing data on this blog. The ability to do each of those things effectively is often what separates stagnant marketing teams from the ones that can scale advertising spend and — more importantly — returns, efficiently.
But even the most data-devoted marketers may not have the full picture. While it is crucial to have a single source of truth regarding performance over time, only having access to your own brand’s data is lacking one thing that is crucial in the new age of digital marketing: context.
To understand the power of contextual data, let’s take a look at the imaginary brand Beta.
Beta’s marketing team has done an excellent job of tracking and analyzing data over the last two years, and therefore has a solid grasp on their performance trends over time. But, despite the team’s rigorous, data-driven creative optimization, they’re seeing a year-over-year dip in ROAS. So they start experimenting — they lower spend, they increase spend, they test new value props, they scrap campaigns, and attempt to re-invent their strategy. They see small wins, but for the most part, they’re spinning their wheels.
What the Beta team can’t see by looking at only their own data is that their top competitors substantially increased their ad spend from 2022 to 2023, therefore gobbling up more of the market share on key advertising channels. If they had access to that real-time competitive benchmarking, they’d be able to make more informed decisions about what their next move could be — they could’ve scaled their spend to match on those key channels, or invested more heavily in a channel that their competitors are de-prioritizing that they know performs well for them.
This is the type of context that can’t be gleaned from bi-annual or even quarterly industry benchmark reports. In a marketing landscape that is moving increasingly fast, brands need to be able to see what their competitors are doing right now to be able to make strategic decisions.
That’s where our partner Varos, comes in.
Varos is the largest eComm & SaaS data co-op in the world — allowing marketers to see how their performance stacks up against their competitors and their industry at large using anonymized data from thousands of brands.
At Coast, we leverage Varos to create an objective source of truth for our clients. Being able to see how our clients compare to other brands in their industry with similar marketing budgets helps us quantify what success actually means. Having access to the ROAS, CPAs, or even thumb stop rates of the best- and worst-performing brands in a certain sub-vertical gives us exact KPIs and allows us to provide a clear goal that we can work towards with our campaigns.
That benchmark data also allows us to make data-driven strategic recommendations about the performance creative we produce for our clients. If Varos’s benchmark data reveals that a client’s CTR and CPCs are underperforming, we can immediately begin to build a creative strategy designed around a stronger call to action and more engaging ads. By digging into video-specific benchmark data, we can also build strategies and create ads designed to bring a client’s hook rate and thumbstop rates in line with their top-performing competitors.
Anchoring our creative concepts in the context of benchmark data helps our clients overcome analysis paralysis. It strips away some of the subjectivity inherent to creative production, helping brands understand the types of ads they need to produce, instead of the types of ads they want to produce.
So, how can you get the most out of benchmarking? Below, we explore four key best practices for leveraging benchmark data, but they all boil down to one thing — empowering your marketing team with context. But remember, the most successful teams will be able to use this context to drill down on their brand’s unique strengths and lean into what resonates best with their customers — not use it to become a carbon copy of their competitors.
One of the things that makes Varos so powerful is that it has very specific filtering capabilities. These allow you to filter down by industry, sub-vertical (cosmetic brands vs. cruelty-free cosmetic brands, for example), spend, geographic location, channel, etc.
The trick is to get as specific as you can with your filters so that you’re sure you’re looking at your competitors while still maintaining a statistically significant sample size.
Once you have that data set, you should first look at the areas where your brand is performing substantially worse than competitors. The high-performer category should always be the north star that you use to understand where you are falling short and then further diagnose the root of that underperformance.
For example, if you see your CPA is higher than top-performing competitors, you can dig deeper into what it takes to lower that cost. You can compare creative metrics against those top performers to see that you need to strengthen your average thumbstop rates or test more enticing CTAs to encourage higher CTRs on ads.
This data also allows you to tune out the metrics that don’t matter, and focus on the ones that do. Varos’s Marketing Mix dashboard allows you to see how your competitors are breaking down ad spend across various channels, and how those channels perform for them. In looking at this, you may discover that you spend significantly more than the rest of the industry on YouTube, but you also perform better on YouTube than anyone else. This data can empower you to continue to lean into that point of differentiation with the next iteration of your marketing strategy, and not worry so much about channels where you may not perform as strongly.
While Varos can show you real-time data, that doesn’t mean you should look at your industry benchmarks every single day. Doing so can lead to knee-jerk decisions and cutting campaigns short before they’ve had time to truly run their course and generate meaningful data for you.
There is a balance that needs to be struck between staying in your lane and looking at what the brands next to you are doing. So find a cadence that works for your team — whether it be monthly or quarterly benchmark reviews.
At Coast, we leverage benchmark data during the onboarding process with new clients to help everyone understand the most important areas of opportunity. Then, we incorporate it in our quarterly business reviews to track performance against KPIs and help further refine our creative strategy.
In addition to showing how you stack up against competitors in real time, the benchmark data Varos provides can help you see a glimpse into the future. By understanding how brands spending a level up from you perform, you can make a case for increasing budgets, investing in new marketing channels, and more.
With cutting-edge creative strategies and relationships with the partners your brand needs to succeed, Coast Digital takes the guesswork out of producing scalable campaigns. Set up a time to chat with our team today to learn more.