Creating a culture of Marketing Effectiveness
There’s nothing new about the marketing effectiveness challenge. Measuring the return on marketing investment has always been a challenge for marketers. We’re all familiar with this quote from John Wannamaker. So, if it’s not new, how has it not been resolved by now? Why are so many organisations still struggling with proving marketing effectiveness?
ROI has become a dirty word
In the first instance, defining Return on Investment is critical. We know that the explosion of digital data over the last 20 years has all too often had a detrimental effect on marketing investment decisions. The ready availability of bottom funnel metrics and data has led so many to focus their marketing investment almost entirely on short-term acquisition. The result? If a marketing investment is not showing an almost immediate return on investment, it is cut, all in the name of efficiency. But not all marketing investment can be measured in the same way.
If we allow effectiveness conversations (particularly at board room level) to focus on efficiency, we’ve lost the battle and marketing will ultimately continue to be seen as a cost centre.
The clear and present danger here is that efficiency measures substitute for measuring real effectiveness.
Do we really need to put a focus on Marketing Effectiveness?
In a word, yes. And the data supports it. A 2018 analysis by Forbes* found that marketers that invested in higher levels of marketing accountability are achieving 5% better returns on marketing investments and more than 7% higher levels of growth performance.
In short, this study found that marketers who pursue higher levels of marketing accountability are achieving superior returns on marketing investments (ROMI) and higher levels of growth performance.
So, what’s stopping organisations achieving this culture of Marketing Effectiveness?
In our conversations with clients, there are so many barriers to this – both perceived and real – ranging from; not having the right data, focusing on the wrong data, not having the right technology, how marketing is perceived in the wider organisation, Marketing and Finance not speaking the same language etc. The list is long.
How do you get there?
Even when doing a certain thing makes perfect sense, it can still be difficult to carve out the time to make the necessary changes in how we work. But the only way to tackle this challenge is to break it down into bite-size chunks.
This is really what we’ve done with our Marketing Effectiveness Framework – there are 6 pillars and within each pillar there are certain levers that you can pull, depending on where you are currently sitting on the journey to marketing effectiveness.
This is not a linear process – you are all operating in different organisations, different environments, different cultures today so everyone will start in a different place but our focus is always on where we want to get to.
Ultimately, we want to be in a position to enable evidence-based decision making - where we can predict with some certainty what impact our different investment options will have on our business outcomes.
And secondly, we want to invest efficiently – you see, efficiency doesn’t disappear, it’s just not the whole picture!
We use this framework with clients to review their business, thinking about where they want to get to, identifying any gaps and/or areas for improvement – and ultimately building out a plan to ensure that they get there.
The ultimate goal is to develop marketing organisations where all investment decisions have a defined business objective, a predicted outcome with clear measurement, a strong buying process and a shared understanding across the wider business and agency partners.
If you’d like to chat more about this, please don’t hesitate to contact us at Hello@Pt78.ie or call us on (01) 556 3678 or 089 700 7000.
*Forbes Marketing Accountability Report 2018