People often talk about “the art and science of…”. The fact is, marketing is undergoing a huge pendulum swing from being more about the art of creative engagement, to the technology-driven science relevant engagements.
In the past, marketing often focused on creative ideas –plenty of fun, but challenging for businesses to accurately measure and value. That’s changing, as new technology allows marketing to become increasingly data driven, be nimble in its go-to-market approaches, and benefit from continuous optimization. Here is some guidance for competing in this new landscape and measuring marketing performance:
1. Marketing is Playing Catch Up
The fact is marketing is one of the last departments to become more automated, predictive, and leverage defining metrics. These metrics are used to constantly measure and improve performance. That’s because traditionally, people didn’t think about marketing like a business measured by profit and loss. But that’s changing quickly, as marketing is increasingly expected to report its performance in the language of business: money.
2. Technology is the Driver
Unlike other areas of business, from finance to manufacturing, marketing had simply not advanced its principles to measure performance. But that’s changing, driven by new customer-focused technology and big data. Whereas in 2010 there were perhaps 100 marketing technology tools, today there are nearly 1,000, a 10-fold increase in four years. According to IDC, 47% of large organizations now use predictive analytics and 41% have discovered new KPIs to help maximize their efforts.
3. Removing the Vagueness
The rapidly increasing availability and effectiveness of marketing technology has caused a fundamental tipping point, removing vagueness or latency from marketing processes. Indeed, marketing can now and is expected to:
- Have a range of performance metrics from tactical to strategic
- Apply marketing investments where they will have highest ROI
- Create gains both in both effectiveness and efficiency
- Align its performance to enterprise priorities
- Focus on buying behavior patterns at the individual level or in customer clusters
4. Local Customers with an Enterprise View
To effectively measure marketing performance, it’s increasingly essential to take an enterprise view. In the past, companies focused on the ROI of a particular campaign or region. That no longer provides the complete truth, because marketing is increasingly complex and varied. Whereas in the 1960s there were five marketing channels, today there are more than 60 (source: Marketing Profs). In marketing today, disparate teams are operating in diverse areas, with different budgets, all seeking to get closer to customer base. The solution is to allow go to market to remain close to the customer, yet provide an enterprise level view of ROI.
5. Continuous Improvement
In the past, marketing might solely focus on new creative ideas, something more creative than last year. This is less and less the case. Now the focus is increasingly on measuring marketing performance: what is marketing contributing to the company bottom line? Is its ROI increasing? Are we acquiring the most profitable customers? Which part of our portfolio provides the best profit? Henceforth, marketing must baseline today’s performance and seek to improve it in a quantifiable manner. How can marketing find new ways to contribute more to the bottom line?
6. Marketing as Business
This shift towards data-centric marketing is enabling it to think and operate more like any other business unit. Marketing is becoming a front office, bottom-line business center, like call centers or manufacturing operations. Everyone wins when marketing is increasingly measured through the eyes of finance: marketing can prove its financial contribution, and C suite can value it.
In conclusion, marketing is no longer like the suits of Mad Men, where creatives conjure up clever new ideas. Instead, marketing is increasingly like any other part of a world-class business: measuring and monitoring data to maximize its financial contribution to the enterprise bottom line.