New Study Shows How Marketing Measurement Pays Off

. September 11, 2017 . 0 Comments

Do investments in marketing measurement pay off?

Increasing numbers of brand marketers agree that it does, and say they can quantifiably prove it. And now a new study called the Marketing Accountability report, done in collaboration with the Forbes CMO Practice and announced by Neustar, provides detailed evidence of marketing measurement’s payoff.

The study – which analyzed responses from over 800 brand CMOs – shows that “high performing marketing organizations” (companies beating growth plans by over 25%) view measurement as a driver of both short- and long-term financial success. On average, their results show that sophisticated and ongoing measurement produces:

  • 5% improvement in marketing investment performance overall, and;
  • 5% more business growth compared to average performers.

The highest performing marketers use data effectively to drive measurement approaches and optimize marketing performance. CMOs at firms most devoted to measurement are more confident in their media allocation decisions and ability to forecast accurately, and are having a positive impact on sales.

Marketers Face Measurement Cutbacks

As the industry trends toward general cutbacks in overall marketing budgets, however, amounts devoted to measurement could be in jeopardy. But as the results of this study indicate, measuring less could quickly cause effectiveness to ebb, and growth to grind to a halt.

Staunch measurement advocates, including many leading CMOs, advise against shelving any measurement efforts. In fact, they say that aggressively pursuing increased marketing measurement is the path to greater effectiveness and improved sales impact – especially in the face of leaner overall marketing budgets.

Sadly, some marketers shoot themselves in the foot by using nonsensical budgeting nomenclature. For example, “The unfortunate and inaccurate use of the term ‘non-working media’ in many marketing budgets is leading to reductions in those types of expenditures,” says Tony Pace, former CMO at Subway and now Chair of the Marketing Accountability Standards Board.

After all, what CFO logically want’s the marketing department to invest in something called “non-working media?” That’s opposite from the outcome marketers want, says Pace. Marketers need to emphasize that measurement and data expenditures actually make the entire marketing investment more effective.

According to Pace, marketers should think about the data they collect as a balance sheet line item that can be used to fuel growth.

Click image to view or download the study infographic

Other Key Marketing Accountability Report Results

  • High performing marketers were significantly more data-driven in their approach to measuring, optimizing and reallocating both offline and online investments. Those marketers built significantly (27%) larger internal staff dedicated to marketing performance measurement.
  • About a quarter of the highest performing marketers are investing over 10% of their budget on performance measurement and analytics – three times the level of the rest of the sample. These measurement trailblazers are three times more likely to say they will beat their sales targets by 25% or more.
  • High performing marketing organizations are 50% more effective at determining the impact of offline and online media, as well as emerging media types, device types and non-media factors (e.g. weather, traffic, economy) on marketing performance and growth than their counterparts.
  • 52% of high performing marketers adopted people-based targeting to incorporate more data about media, touch points and deliver higher levels of transparency, attribution and connection to financial outcomes.
  • CMOs ranked social media as the most effective media investment overall, rating it as the top driver for brand awareness surpassing digital and traditional advertising and search.
  • High performing marketing organizations that use attribution models to maximize and unlock the value of social media channels were 10% more effective at using social media to drive brand awareness, over 9% more effective at generating customer engagements and over 9% more effective at obtaining prospective customer responses.
  • The most effective marketers dedicate more staff and technology resources to the development of data, analytics and models. They are also twice as likely to use sophisticated marketing mix models (50%) and multi-touch campaign attribution (55%) to demonstrate ROI.

Category: Articles, Budgeting, CMO Briefings, Finance, News, People, Research, Research Reports, ROI, Trends

About the Author ()

Daniel Kehrer is Executive Editor of the ANA Data Analytics Center (DAC), a leading voice of thought leadership and education in marketing measurement, data and analytics. He is also the Founder of BizBest Media Corp. and previously headed marketing at MarketShare LLC, an advanced marketing analytics technology company.

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