truth in marketing: global marketing leaders on the value of marketing

MARKETING ROI SURVEY REPORT

April 09, 2013

CONFIDENTIAL AND NOT FOR DISTRIBUTION

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EXECUTIVE SUMMARY

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Executive Summary

• Many marketers would argue that they have always delivered results and offer up metrics like brand awareness, impressions, page views, click-throughs, and downloads. And while that may well be true, when pressed, few can actually provide a definitive, quantifiable answer to the question, “What is marketing’s financial impact on the business? What is the ROI of our marketing efforts?”

• Marketers that express the highest satisfaction with their ability to measure and report on marketing ROI approach the task differently than their counterparts: they are more technologically enabled in their reporting, experience fewer data challenges, and integrate with their counterparts in other departments. There also appears to be some lack of consistency as to what the definition of marketing ROI actually is.

• Technology — and the ability to leverage it effectively — is a critical factor in the marketing organization’s perceptions of its effectiveness or lack thereof.

• Specifically, possessing accurate data and then being able to effectively integrate disparate data from multiple sources is the defining capability and difference between those who can and those who can’t report the return on investment in marketing.


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About the research

• Winsper conducted an online survey of senior marketing leadership (director and above) randomly recruited from large, global enterprises (1,000+ employees and $1B+ in revenues) in both business-to-business and business-to-consumer industries. Eighty-five respondents from industries ranging from financial services, pharmaceuticals, and CPG, to enterprise technology, medical devices, and transportation completed the survey.

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FINDINGS



Importance of measuring marketing ROI

• Not surprisingly, our respondents indicate that measuring marketing’s ROI (ROI) is important. In fact, no respondent indicated that measuring marketing ROI is Unimportant or Of Little Importance, with 100 percent assigning marketing ROI at least some level of importance and fully 73 percent saying it is Very Important.

• While virtually all respondents indicated that measuring marketing’s ROI was important to their organization, nearly 30 percent did not measure it.


Measurement and reporting challenges

• There are multiple reasons preventing organizations from measuring and reporting on marketing’s ROI. Challenges relating to marketing data present the greatest difficulty. And, somewhat surprisingly, challenges relating to things like company culture, politics, and organizational structure represent less of an impediment.

• With regards to the latter, we hypothesize that this is further proof of the broader importance of understanding marketing’s impact on the business and the increased expectations placed upon the marketing organization to be able to measure and report on its activities and the associated benefits.


Satisfaction on ability to measure ROI

• Of the majority of organizations that do measure marketing’s ROI, most express some level of satisfaction, with no respondent selecting Extremely Dissatisfied and only 18 percent choosing Dissatisfied.

• However, only 5 percent chose Extremely Satisfied, with the majority of respondents selecting Satisfied (44 percent) to Moderately Satisfied (33 percent).

• We believe part of the reason so few respondents were Extremely Satisfied with their ability to measure marketing’s ROI is due to the difficulties they face in trying to establish it. The majority of the challenges are all data related: collection, integration, and accuracy.


Marketing ROI measurement challenges

• It is worth noting that the single greatest challenge is the process of collecting marketing data. A possible reason for this is that marketing is one of the last departments to embrace technology, automation, and the level of quantifiable performance metrics that many other areas of the enterprise utilize on a regular basis.

• The challenges preventing an organization from measuring marketing’s ROI are primarily related to marketing data

• The challenges for organizations currently measuring marketing’s ROI extend across multiple departments and data silos.

• The inference is that marketers don’t know what they don’t know: marketing data is challenging enough on its own, but the actual ROI exercise requires data from multiple other sources, each with its own set of challenges and difficulties.


Most important measures of marketing ROI

• The three most important criteria for measuring marketing ROI are business metrics.

– Revenue attained by investment made– Market share growth/capture– Incremental revenue growth within

customer base

• Reflecting the continuing evolution and increasing expectations of the marketing organization, department and individual contributors’ focus on measures like brand awareness and preference, reach and frequency, impressions, etc., have been supplanted by quantifiable financial measures.


Value of measuring marketing ROI

• The ability to make more informed decisions is the primary value of measuring marketing ROI, selected by 82 percent of respondents. Demonstrates effectiveness of investment follows closely behind, chosen by 79 percent.

• It is worth noting that respondents placed less value on those items that were less marketing-centric and involved cross-departmental interactions and/or necessi-tated a broader view beyond just the marketing organization.

• We believe this is likely due to the challenges related to accessing, collecting, and integrating data that is non-marketing related.


Communicating marketing ROI

• There are a number of reporting mechanisms utilized by respondents when it comes to reporting on marketing ROI.

• Presentations and spreadsheets are still the most used formats, used by 38 percent and 36 percent respectively. These approaches are likely much more labor-intensive than communicating via reporting tools, dashboards, and applications.

• It is likely that these more technology-enabled and automated mechanisms will see growth moving forward, along with additional technology enhancements for mobile access, real-time reporting, etc.


• While the primary value of measuring marketing’s ROI is the ability to make more informed decisions and understand the effectiveness of marketing’s performance, only 16 percent of respondents actually use marketing ROI as a tool for determining investment in marketing activities.

• Indeed, nearly two-thirds of respondents determine marketing investment using criteria that is not directly tied to the actual performance of said marketing investment, with 38 percent planning based on revenue projections and 27 percent based on the previous year’s budget.


Marketing budget approval criteria

• Only 16 percent of respondents approve marketing budgets based on actual performance.

• And with nearly 70 percent using metrics that are not performance based but are more arbitrary in nature, marketers will find themselves struggling to justify their budgets, much less prove their financial impact on the business.


Conclusion

Expectations for the marketing organization are on the rise and there is a fundamental shift from marketing tactically driven performance metrics to financial, quantitative metrics to measure marketing’s ROI. The good news is that the marketing organization understands the new landscape and the importance of moving in this direction. But while the importance of measuring marketing’s ROI is obvious: • Marketers are challenged to do it • 30 percent of respondents are not measuring marketing ROI • Most efforts around measuring marketing’s ROI are not viewed as highly successful • Most marketers are not using ROI to inform their planning and budgeting

Not surprisingly, the marketers most satisfied with their ability to report on marketing ROI: • Use marketing ROI for planning and budgeting exercises • Are better able to address the associated data challenges, across all sources • Utilize less labor-intensive reporting • Better integrate with their peers and colleagues in other departments

To survive and thrive, the marketing organization and marketers need to be able to deliver proof, not conjecture; marketing ROI is that proof.

THANK YOU.

CONFIDENTIAL AND NOT FOR DISTRIBUTION

truth in marketing: global marketing leaders on the value of marketing

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