MarketingVOX: Only 9 percent of marketers say their ability to measure the financial returns across all forms of marketing is “a real source of leadership” or “as good as it needs to be,” according to the “2007 Marketing ROI and Measurements Study” from Lenskold Group and MarketingProfs. That proportion actually declined from 2006, when it was 16 percent.
When asked to describe their expectations regarding company growth in the upcoming year compared with their competitors, 60 percent of the companies using ROI metrics said they expect somewhat or much greater growth than their competitors, compared with 48 percent of those not using financial metrics.
The study analyzed 759 survey responses from marketing practitioners worldwide and focused on the difference between companies that use profitability metrics and those that use traditional marketing metrics without financial metrics.
Among those measuring ROI, 30 percent said their CEOs and CFOs are “very confident” that marketing investments are profitable, while just 6 percent of those not using financial metrics said so. An additional 51 percent of each group say CEOs and CFOs are “somewhat confident,” bringing the respective totals between the two groups to 81 percent and 57 percent.
The majority (55 percent) of marketers say they could generate 10 percent or higher profit improvements if better measurements were in place to capture marketing’s contribution to incremental sales. However, the marketing budget for measurements and analysis is below the necessary level according to 76 percent of marketer.
The success of companies using ROI and other profitability metrics does not come from the use of those metrics alone. Their strength ratings for the following areas (based on the top two ratings on a five-point scale, ranging from very strong to very weak) are significantly higher than those of companies not financial metrics:
In short, companies that use ROI metrics tend to have greater discipline – as a matter of company culture – in managing profitability.
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