Mark your calendars for October.
That is when the Chief Marketing Officer (CMO) Council will unveil a complete marketing performance management (MPM) framework at its annual meeting. The CMO Council generated a lot of interest in June when it unveiled the results of a study of more than 1,000 CMOs at technology firms representing more than $400 billion in revenue.
In essence, the survey revealed that almost all firms are attempting to brand based on little more than a brand-equity “wing” and a positioning “prayer.” Few firms can collect the metrics required to justify substantial marketing investments.
Some companies surveyed, for example, spent as much as 25% of revenue on marketing. The survey echoed others. Willott Kingston Smith and the PACE Partnership surveyed UK agencies, who ranked themselves highest in the ability to provide “good work” (such a shock) and lowest in the ability to measure outcomes.
CMOs are painfully aware of measurement failings. Lack of metrics prevents them from complete evaluations of program effectiveness and handicaps the trade-offs inevitable in any branding campaign. Nearly 40% of respondents were dissatisfied with their ability to measure.
It also costs them executive support. In a survey among companies from The Times 1000, only 57% of finance directors believed that marketing investments helped long-term corporate growth; 27% believed that marketing was only a short-term tactical measure; and 32% said marketing was the first budget they would cut in hard times (another shock).
The advantages of branding metrics are clear, according to the CMO Council study. Companies that had formal performance measurement systems were characterized by a higher level of CEO confidence in marketing. More important, companies using measurements tended to outperform competitors in terms of sales growth, market share and profitability.
No wonder that nearly 90% of these top-ranking marketers considered marketing performance management a significant priority, and about 60% planned to increase spending in this area within two years.
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