Recent, unprecedented advances in marketing technology have led to the fragmentation of marketers into two groups, as explored in my previous blog post. One group is marketers focused on the past (and using numbers to cover their ass), the other those focused on using numbers to chart future growth.
Why are most marketers stuck in the past, and struggling to make the leap to future focus and profit? Here are some reasons why – and what you need to know.
TMI: Too Much Information
Marketers are drowning themselves in too much information. In a recent survey, nearly 65% of marketers said they’re overwhelmed by the volume of data that’s available.
Many marketers are capturing far more information than is needed, and thus drowning themselves in a data deluge. One resulting problem is that many marketers focus too much on secondary metrics like clicks and impressions, and not enough on what really matters: money. Losing sight of the dollars is putting marketers in peril.
Too Many Tools
This information overload is being caused in part by the excessive number of marketing tools being adopted by many marketers today. The number of marketing technology solutions on the market is nearing 1000, up from only 100 about a decade ago. In contrast, top marketers are consolidating the number of tools they use, and focusing on those that measure dollars rather than clicks.
Concern About Marketing ROI
According to IBM’s Global Chief Marketing officer survey, 63 percent of
respondents believe marketing ROI will become the most important measure of success over the next three years. This has led to recent innovations that enable marketers to measure – for the first time – exactly how much profit they’re delivering to the enterprise as a whole.
The number one concern of marketers eight years in a row is accountability, according to the Association of National Advertisers’ annual benchmark study. That desire for accountability is driven by a pressure to definitively prove marketing’s financial value to the business.
That pressure is fueled by C-suite increasingly demanding to quantify the value of marketing. A recent survey found that 72% of CEOs say marketers are always asking for more money, but rarely can explain how much incremental business this money will generate. That’s fueling the rapid sales growth of software solutions focusing on the financial aspects of marketing.
End of Qualitative Marketing
Most business functions have adopted a scientific approach to business, with accountability and financial standards. In contrast, marketing has long been the final frontier, with no global standards. That’s why marketing often clashes with finance, with marketers rarely getting the full budget they want.
The days of qualitative marketing are over. Take a look at finance, which is governed by strict rules such as the Generally Accepted Accounting Principles (GAAP). Similar, equally rigorous standards are coming to marketing, as evidenced by the advent of the Marketing Accountability Standards Board. MASB is tasked with developing the same performance and financial standards that apply to most other business functions.
Financial KPIs for Marketing
In recent decades, most business functions from manufacturing to supply-chain, from HR to sales, have adopted clear standards and metrics. Marketers who can measure and report their contribution with financial KPIs will be able to boast of the same discipline as these other functions. Marketers who develop a close relationship with finance benefit in many ways.
Marketing has long been a qualitative business unit, one based on hunches and instincts. That’s because historically it was difficult to measure with certainty the financial impact of mass media such as TV ads and newspaper ads.
With the advent of digital marketing, those days are over. For marketers, this change can be an opportunity or a threat. The most important impact marketing can deliver is to grow the enterprise’s incremental profit. Those who do will thrive, those who don’t will be making difficult career changes.