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Marketing ROI: Focus is Shifting to Return, Rather Than Investment

Marketing ROI Chalkboard

CEOs and C Suite increasingly expect marketing to prove its worth, in the common language of business: money. As this shift accelerates, marketers will increasingly be expected to focus on return (profit), rather than investment (spend).

But most marketing departments are hardly ready. In our recent survey, G3000 marketers were asked how they define marketing ROI. Shockingly, only 16% actually mentioned incremental difference. Most marketers are still stuck on the “I” of ROI, rather than the “R.” They’re focusing on what they spend, rather than what they earn.

McKinsey & Company CEO SurveyAnd that’s a problem. Businesses invest money to generate a return. But only 16 percent of marketers actually use ROI as a tool for determining their spending. Nearly 70 percent use metrics that aren’t performance based, but rather more arbitrary.

McKinsey & Company reports that as budgets face greater scrutiny and marketers struggle to show bang for the buck, the reputation of marketing has begun to erode. One study found that 72 percent of CEOs say marketers are always asking for more money, but rarely can explain how much incremental business this money will generate.

For marketing to be viewed as generating income – rather than expense – marketers must develop the ability to provide quantifiable performance metrics based on business objectives. Thus the measure of success is changing. Marketing can no longer seek to demonstrate performance by metrics such as email opens, clicks, impressions, etc.

This change is coming. Shifting the focus to return on profit, rather than investment or spend, is the first step to solving these problems. By showing marketing ROI, enterprise wide, CEOs will increasingly see the value of marketing, and its contribution to the bottom line.

Conclusion: Forward-thinking marketers are increasingly measuring return or profit, in addition to investment or spend.

This is an excerpt from our exclusive new eBook, “10 Essentials for Proving Marketing ROI”. Get your free copy of this expert resource now.

By Jeff Winsper

Jeff is the President of Black Ink and offers more than 20 years of leadership experience in marketing, serving companies ranging from Fortune 500 to start ups.

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