Sunday, October 11, 2009

New Study, Same Results: Minority of Companies Do Effective Marketing Performance Measurement

The latest addition to my collection of surveys about marketing measurement is The Marketing Performance Advantage, a joint effort from strategic marketing consultants CMG Partners and market researcher Chadwick Martin Bailey. Based on 400 online interviews among CFOs, CEOs and marketing employees of companies with 100+ employees, this is one of the larger and more sophisticated studies on the topic.

One-Quarter of Companies Measure Marketing Performance Effectively

The main finding is that about one-quarter of marketers feel they do an adequate job of measurement. This matches other studies on the topic. The survey asked several questions along those lines:

- 20% say their company "excels" at measurement
- 22% "excel" at using measurement-based insights to drive improvement
- 24% see a positive impact from measurement, and
- 27% have fully integrated measurement into marketing planning

The study also resembled other research in showing that many more marketers list measurement as a top priority (44%) than actually do it.

Marketing VP's Are More Satisfied with Measurement Than Anyone Else

One intriguing detail was that senior marketers seem eerily "overconfident" (the authors' word) compared with those above and below them in the organization.

- 13% of marketing vice presidents consider marketing performance measurement a "huge challenge", compared with 34% to 38% of CEOs, marketing directors and marketing managers, and 61% of CFOs.

- 38% of marketing vice presidents felt that measurement has a "huge impact" on their business, compared with 15% to 29% of CEOs, marketing directors and marketing managers, and 7% of CFOs.

How well is your organization performing with respect to measuring the performance of marketing initiatives? How well are you using insights to improve the performance of marketing initiatives?
This is a huge challenge...CEOCFOVP MarketingDirector MarketingManager Marketing
Measuring MP 36% 61% 13%38%34%
Improving MP 28% 61% 9%38%38%

To what extent, if at all, has measuring the performance of your marketing initiatives improved your business?
Impact of MP on your businessCEOCFOVP MarketingDirector MarketingManager Marketing
No impact 29%52%0% 21%21%
Neutral 42%41%62%64%50%
Huge Impact 29%7%38%15%29%

Although the authors don't make the connection, these results help to explain why more money isn't invested in marketing measurement: the marketing vice presidents who control the purse strings are the least convinced they have a major problem.

Barriers to Measurement: Data, Technology and Process

The survey also asked about major barriers to marketing measurement. These include all the usual suspects. If anything, what was intriguing was that executive support is such a small issue compared with the others:

Barriers to improvement (% answers 1-4 on scale of 1-10):

- 40% collecting the right data
- 40% technology/systems
- 39% clear & effective processes
- 36% use of customer analytics
- 36% organizational alignment
- 26% skills sets
- 20% senior level buy-in

Effective Companies Have Clear Process to Apply Measurements, Invest in Measurement Capabilities and Hold Marketing Accountable for Results

Another set of questions covered adoption of best practices, and compared answers from companies reporting positive impact from marketing measurement with answers from the others. The biggest differences were in having clear processes to ensure that measurement-based insights are applied to decisions; the next tier included marketing targeted investments and holding marketing accountable for measured results. Senior level buy-in, strategic alignment and usage outside of marketing were less prominent.

Best practice adoption (index of use by companies reporting positive impact, where 100=average of all companies)

- 251 clear process to ensure measurements are applied to decisions
- 215 targeted investments in measurement technology/systems, skills and data
- 206 marketing held accountable on performance metrics
- 161 alignment of marketing activities to strategic business objectives
- 159 senior level buy-in
- 145 usage beyond marketing

1 comment:

Peter @CB said...

Very interesting information. While our company is strongly focused on measuring our marketing efforts, I know several other companies that don't bother to do anything. I think it is very beneficial to track and measure marketing performance.