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Enhancing relationships: Lead versus Lag indicators

Effective collaboration between advertisers and their communication agencies requires continuous evaluation and feedback. While lag indicators offer insights into past performance, focusing on lead indicators can significantly enhance the strategic direction and outcomes of campaigns.

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What is a lead and a lag?

In the context of advertiser-agency relationships, lead indicators are forward-looking indicators that predict future campaign effectiveness. These metrics help anticipate the outcomes of marketing efforts before they fully materialize. Examples are the level of expertise, effective processes, and positive attitudes. These metrics forecast potential success and provide early warning signs for necessary adjustments. Lead indicators look forward.

Lag indicators, conversely, are backward-looking and reflect the results of past actions, such as campaign metrics and financial performance. Examples are the traditional metrics like brand preference, past campaign reach, and historical sales growth. These are essential for understanding what was achieved but are often outdated by the time they are analyzed. Lag indicators look backwards.

The importance of focusing on lead indicators

Focusing on lead variables in the feedback and evaluation process offers several advantages:

  • Predictive Insight: By monitoring these early indicators, advertisers can proactively tweak strategies or shift resources to optimize performance before final financial outcomes are determined.

  • Enhanced Communication and Collaboration: Regular analysis of lead indicators fosters a culture of continuous feedback and collaboration, helping build a more responsive and adaptive relationship between advertisers and their agencies.

  • Optimal Resource Allocation: Utilizing lead indicators for decision-making helps in allocating resources (budget, manpower, time) more efficiently, ensuring that they are invested in high-potential areas that maximize impact.

  • Competitive Advantage: Early insights provided by lead variables enable advertisers to stay ahead in the market by adapting to trends and audience behaviors faster than competitors who may rely solely on lag indicators.

Maintaining a productive relationship between advertisers and their communication agencies is key to campaign success. While understanding past performance through lag variables is necessary, the strategic focus on lead variables provides actionable insights that directly influence future results. By prioritizing these predictive indicators, advertisers and agencies can collaboratively refine strategies, optimize resources, and achieve better outcomes.

The PitchPoint 180° evaluation tool, COLLAB, can help you focus on the forward-looking indicators that predict future campaign effectiveness. Do you want to measure your lead indicators and get the early warning signs for necessary adjustments? Contact for a free demo of our 180° COLLAB evaluation tool.


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