Marketing ROI Moves From the Agenda Into Action

Great news for corporate executives with an eye on marketing performance: The discipline of measuring and managing marketing ROI is rapidly growing and taking hold.

For at least the past five years, marketing executive surveys have put marketing ROI at the top of the agenda, and you had to wonder when the talk would lead to action. The results of the forthcoming "2006 Marketing ROI and Measurement Trend Study" (Lenskold Group/MarketingProfs.com), now in its second year, show a sizable jump in marketing's ability to measure financial impact.

Marketing organizations need to assess where they stand and how well they are progressing relative to their industry. What do the trends in calculating ROI and other profitability metrics, or in linking brand measures to incremental sales and profits, mean to you? Are you part of that movement, or do you run the risk that your competitors are pulling ahead?

Progress is being made, yet most companies remain under-funded for marketing measurements and still have further to go. So, where do you stand in your measurements of the financial returns from marketing?

The stakes are high. A company's ability to put marketing ROI measurements and analysis into practice to increase efficiency and effectiveness so that every marketing dollar spent produces more financial results can create competitive advantages and greatly enhance marketing's credibility within the organization.

Few have achieved a leadership in this emerging discipline, but the trend is clearly on the upswing:

• In the 2005 study, over half (53%) of the marketers surveyed described their ability to measure the financial returns (ROI) generated across all forms of marketing as "a long way from where it could be." This year, that number has dropped to 42%.
  
  
• Moreover, 16% of the 791 marketers surveyed consider their ability to measure financial returns as either "a source of real leadership" or "as good as it needs to be," compared with only a total of 8% one year ago.
  
  
• The remaining companies (42%) are making progress with ROI measurements but report their ability as "somewhat short of where it could be."

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