Ad tech is giving merchants and advertisers more opportunities than ever before to run powerful and successful campaigns to attract new customers, re-engage dormant ones, and drive deeper loyalty with existing ones. With card-linked offer (CLO) campaigns, in particular, sellers are finding great success. But it’s easy to get led astray when it comes to measuring the actual effectiveness of your CLO campaigns. And the variety of platforms and metrics can complicate things when it comes to making a compelling case for exactly how to evaluate a card-linked offer campaign within the broader context of your marketing media plan.
The good news is that with a little bit of diligence beforehand and some active monitoring throughout and after the campaign, you can get a very clear read on the success of your investment. And while, unfortunately, there isn’t a “did it work” button, by integrating the components of campaign success measurement into your process from start to finish, you’ll have a clear view of what worked and what you need to tweak for your next campaign.
The CLO-Shaped Hole in Your Media Plan
Card-linked offers, included as part of a debit or credit customer’s rewards program, have a lot of benefits, but a noteworthy one is the fact that they produce raw purchase-level data. There’s no need to estimate the sales during the campaign because you can see every individual transaction at every payment institution running the campaign. That makes a card-linked offer an excellent candidate for in-depth statistical analysis.
Before You Launch Your CLO Campaign
Defining Campaign Metrics
The first step is simple. Define your goals as a merchant for this campaign. Not every campaign has the same desired outcome. Some are targeted at acquiring new customers, others are focused on increasing spend from the most loyal customers, and yet others are concerned with converting casual customers into loyal customers.
After you identify your broader goals, you’ll need to determine which metrics you’ll use to measure success at the end of the campaign. You’ll get raw data from your partners running the offer (hopefully), and you’ll use that data to make some basic calculations. Definitions are vital here to make sure your data and your calculations tell the story you expect: What constitutes a “new” customer for this campaign, or a “lapsed” customer? How are you calculating return on advertising spend (ROAS)?
When you’re making calculations to measure campaign success, don’t fall into the trap of blindly trusting a simple comparison of purchase behavior before the campaign and during the campaign. There are too many confounding factors (like seasonality) that impact consumer purchase behavior to rely heavily on this kind of metric.
Measurements to Make at a Minimum:
- Total sales: This is your top-line revenue number for the time of the campaign, in dollars.
- Total orders: The number of purchases during your campaign.
- Average order value (AOV): This is total revenue divided by the number of orders. One common effect of a reward or cashback offer is that consumers end up purchasing a little more than they usually would. Monitoring AOV over the campaign can help determine this.
- New customers: New customers are usually calculated by looking back through a purchaser’s history for some time period, often 3, 6, or 12 months (depending on the merchant vertical).
- Lapsed customers: A powerful stat, but you need to define it clearly. What constitutes a lapsed customer? Like your “new customers” stat, it may vary based on your vertical.
- Repeat customers: There are a variety of ways to measure purchase frequency. Keep in mind that if you’re running a one-time cashback offer, you may not see customers return at the same pace you might see with a multiple-use offer.
- ROAS: Return on advertising spend is generally calculated by dividing the total revenue generated from a campaign by the cost of the advertising campaign. Calculating the return on your ad spend can be tricky. With card-linked offers, it gets a little bit easier; the amount you paid for a transaction is linked directly to an actual transaction.
Rewards Programs and Impression Reporting
You may also get impression reporting for your campaign from your partners. Impression reporting can be a powerful tool to determine what the effectiveness of a CLO campaign looks like within your broader marketing media plan. Impressions work a little bit differently with card-linked offers than they do with other marketing plays. That means impression reporting for CLOs takes care and consideration. For instance, cashback offers can have a certain surprise-and-delight component to them; just by happenstance, a number of cardholders will make a rewardable purchase without checking their new offers. After receiving their reward, they may even become loyal customers without ever having registered a proper “impression” on the cashback offer as it appears in their banking app. Any one piece of data cannot capture the entire truth, which is why establishing clear definitions and taking a holistic view come into such sharp focus.
Incrementality: The Gold Standard for Experimentation
As a rule, the best way to measure the effectiveness of any intervention (like an ad campaign) is to build a proper experiment. The effectiveness of your campaign is referred to as "incrementality." For a cashback offer, the best experimental design to measure incrementality is A/B testing using control groups (or “holdout groups”). This involves establishing a randomly-assigned group of cardholders who will not see the reward, and comparing their purchase behavior to that of cardholders who see it.
You won’t be able to make statistically-sound statements about the success of your campaign without some sort of robust experimental design like this. The obvious caveat is that fewer people are eligible for your offer; many merchants trust in their marketing mix enough that they won’t run holdout groups for every campaign.
That said, if you’re going to do it…do it right! Be sure to build a proper experiment, with large sample sizes and a clear set of goals and expectations, then try to gather as much comparison data as you can. Look at your competitors’ sales for the same period, and remember to account for any larger market trends as well.
During Your Campaign
Monitoring your campaign’s numbers while it’s running is important for a variety of reasons. To begin with, you may be getting regular reporting from the partner running your offer. This sort of live data allows you to check for things like performance boosts from other ad campaigns you’re running, as well as increase your budget if cardholders are redeeming at a higher rate than you expected.
Another benefit of live monitoring is that it reduces your tendency to rely on a “pre/post” analysis, which we warned against above. Seeing more granular trends in data as they happen, like normal increases in purchases on a weekend or a holiday, primes you to think about data as being fundamentally noisy. Noisy data requires more careful evaluation!
After Your Campaign
After you run your card-linked offer, the first questions you ask will naturally revolve around the metrics you focused on before you started. But the next ones are more qualitative and reflective:
- Did you choose the right metrics to measure?
- What worked about the process?
- What do you need to change about the process for future campaigns?
- What levers can you pull before and during the next campaign to affect the results?
- Did the type of offer and the value of the offer seem compelling?
- Did your target group respond to the campaign? Which demographics did?
- How did your brand perform compared to your competitors?
The answers to these questions will help you determine how to run your next campaign differently, if you need to.
Set Yourself Up for (Campaign) Success
Performance marketing is becoming a more and more powerful tool every day, as advertising technology evolves to capture attention at greater scale. Card-linked offers are some of the most powerful tools in an advertiser’s toolkit; it’s hard to beat direct integration with a customer’s banking app, followed up by cashback or credit card rewards points. That doesn’t mean you should charge in blindly, though. We’ve seen a lot of successful campaigns go through our network of millions of diverse cardholders at neobanks and other financial institutions; reach out today and we’ll get you started on yours.