Marketing leaders are increasingly measured by their contribution to their company’s revenues and less on traditional campaign metrics. However, a significant number still struggle to define and validate the level of their contribution according to a new study of over 400 local marketers.
The Marketo research report called “Can You Demonstrate the Value of Marketing?”, revealed that growing revenue is the top expectation for marketing departments. And while marketers say they are “comfortable with being judged on the revenue performance”, the majority also admit they struggle to demonstrate it in any meaningful way.
“61 per cent of marketers say they are only fair or poor on this [contribution to revenue] measure. Only nine per cent rate themselves as excellent,” the authors wrote.
According to the research report, five key research trends stood out.
1. Asked to identify the top organisational goals for the business, companies expect their marketers to grow revenues (20.75 per cent), acquire new customers (20.6 per cent), and improve the customer experience (17.9 per cent), as their top priorities.
To achieve this, marketing leaders say they are expected to improve operational efficiency, invest in new technology and commit to improving the capabilities of their people through education and training. But while revenue emerges as the key benchmark in the study, broadly speaking, marketers rate themselves poorly when it comes to demonstrating their contribution: 61 per cent say they are only fair or poor on this measure and less than ten per cent rate themselves as excellent.
In fact, almost a third (31 per cent) do not even measure their contribution to revenue, and only 14.8 per cent say they contribute to more than 50 per cent of company revenues. And, when pushed on the matter, half admitted to guessing the number.
2. Marketers are investing in programs to better demonstrate the value of their work. However, these are often unsophisticated. Attribution models tend still to be immature. Less than half the marketers surveyed said they used a combination of multi-touch and first-touch models. In fact, it is still more common for marketers to rely on traditional campaign metrics like clicks, downloads or customer satisfaction ratings such as net promoter scores, than on the financial metrics that underpin what marketers themselves identify as key organisational goals. More than ten per cent of marketers (12.6 per cent) make no attempt at all to measure the success of their activities.
3. As such, marketing is still poorly perceived by its management peers. Barely 15 per cent of respondents said their peers saw marketing as a primary business driver and revenue generator. Marketers can’t quite shake off the image of what Liz Miller at the CMO Council in the US famously derided as the “colouring-in
department”. In fact, marketers say they are still largely considered to be brand managers and event organisers. On the upside, almost a third said their companies recognised the support they provided to the sales department and therefore to achieving revenue goals.
The CMOs interviewed as part of the report’s deep dive behind the numbers said that while their management peers had a better sense of what they contributed now compared to five years ago — largely because of the accountability provided by digital marketing — the current leadership groups of many organisations still see marketing as anchored in the world that digital marketing has largely displaced over the last 20 years.
4. Marketing technology has made huge strides improving the lot of CMOs over the past decade, and most companies have made investments across a range of disciplines. The top five functions identified by marketers in the survey were CRM, Social Media Engagement, Email Marketing Platforms, Marketing Automation, and Data Management.
Meanwhile, in the coming year, Marketing Automation tops the wish list. And while it is still early days for technologies like Artificial Intelligence — the percentage of companies making investments in this space remains in the single digits — expect a big spike in this number next year.
5. As to their own goals, marketers want to build a bigger personal profile (interestingly, in the deep dive this was partly motivated by wanting to demonstrate the value of thought leadership to their peers). They also aspire to taking a larger role in business strategy and see gaining additional skills and capabilities as key to this.
Read more on the state of marketing impact here.
Digital Intelligence Unit
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