Digital and measurement innovation are making Marketing more accountable. And it can’t happen fast enough. Why do Chief Marketing Officers last only 28 months on average? Why, according to a recent Ernst & Young study, do less than 20% of Fortune 1000 companies have a Chief Marketing Officer? As Advertising Age noted:
A study conducted by Ernst & Young…found that 13% to 15% of Fortune 1,000 companies employ some sort of marketing position with a chief or senior-executive-level title, such as chief marketing officer or chief revenue officer…The absence of a head marketer in public filings is evidence of their potential lack of say within organizations, said Ed See, a consultant in Ernst & Young’s advisory services practice…
Why such an uncomfortable state of affairs ? In part, it’s because the return on marketing has often been insufficient, that’s why. That’s an easy thing to say. The more uncomfortable part is asking why? Are Marketers simply incompetent? Or does the rest of the world really not appreciate Marketing, as some would have you believe?
Return on Marketing Investment — Insufficient ? (visual courtesy of peoplesuccess.com)
Why Return on Marketing is Insufficient
- Measurement – Large parts of the Marketing budget have not been measurable. Cause and effect in the marketing mix were poorly understood. Even in great Marketing driven organizations investments were often made on good faith. Why? Because the basic data and measurement capabilities simply didn’t exist or were too costly.
- Organizational Accountability – It pains me to say this. But, many Marketers adhere to a kind of voodoo faith in marketing. Creativity and branding are believed to be beyond data and metrics. It’s sad but true; too often Marketing organizations have not been disciplined and accountable for their spending.
- Marketing IQ– Many organizations don’t really understand the value of a brand. CMO’s can’t just take for granted that people understand and value brand building activities and their impact on profit. Part of their job is evangelizing the benefits of Marketing and helping the organization understand how Marketing makes a financial difference.
But things are about to change—in a big way. Marketing is in the midst of the most transformational period since the invention of the 4P’s.
Two Tectonic Changes — Digital & Measurement Innovation
- Digital Convergence – As more Marketing is delivered digitally, more of your plans become measurable. And when your plans can be measured, they can be analyzed, drivers can be quantified, and success becomes more knowable. The inexorable drive to digital, across all mediums, means more transparency. And with transparency comes greater accountability for your Marketing organization.
- Measurement Innovation – New measurement tools are changing what can be measured and when. Marketing mix modeling, real time evaluation of advertising effectiveness, viewer engagement and the realization of single source data—the Holy Grail in marketing—are closer than ever. And the convergence to digital is turning tool theory into reality.
These changes mean that Marketing investments and their impact will be more transparent, and Marketing organizations will be held to greater accountability. And the current challenging economic environment guarantees continued and unrelenting scrutiny of marketing spending.
What You Can Do — Play a Leadership Role
- Set Clear Objectives and Demand Measurement – Create and use Marketing metrics. Focus on marketing efficiency and impact. A great post on this topic is Nichole Kelly’s “Return on Marketing Investment Measurement that Works.”
- Embrace Digital Opportunities– Explore the use of digital measurement in your plans. Stay on the cutting edge of new technologies and frameworks. Learn more about digital measurement in Jonny Longden’s “How to Build a Digital Measurement Framework.”
- Explore New Measurement Tools – Stay abreast of the newest measurement tools. Appoint an expert in your organization to follow trends and identify new opportunities. Learn how they might impact your business. Experiment.
- Evangelize Marketing– Talk to internal stakeholders. Share information and build understanding of cause and effect marketing. Convince people that Marketing should be an investment, not a cost. Help people understand that the brand is more than Marketing, as I did in a related post “Leading Your Brand Beyond Marketing.”
Marketing will always be a complex and exciting blend of analytics and creativity. What’s changed is that the advent of digital and measurement tool innovation will create a new era of transparency and accountability in your Marketing world. Marketing will become an investment—not simply a cost.
Marketing exists for one and only one reason – to drive economic value for the business. In the past, there were plenty of excuses as to why return on marketing was insufficient. Not so in the future. Shame on us if we miss this singular and epoch making opportunity.