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DukeCMOSurvey-Measuring-Biz-Impact-Social-Mktg-Spend-Aug2016CMOs aren’t getting any better at demonstrating the impact of their marketing spending. Case in point: just one-third say they’ve proven the long-term impact of their spending quantitatively, according to the latest CMO Survey [pdf] from Duke University’s Fuqua School of Business, a figure unchanged from 2 years ago.

If anything, the ability to prove ROI may actually be worsening: this edition shows just 34% able to quantitatively demonstrate the short-term impact of their spending, down from 37% a couple of years ago.

The only – very modestly – encouraging news on the ROI front is a slight gain in confidence in the ability to quantitatively measure the impact of social media. That’s up to 20% of respondents this edition, from 15% in late 2014.

The question of ROI proof, which has come up over and over again in research over the past few years as one of marketers’ top challenges, is important because marketers have come under increasing pressure to prove their worth.

It’s also a critical factor for marketing budgets, which appear to be going up. CMOs responding to the survey reported a 6% increase in marketing budgets over the past year, and are expecting a more rapid gain of 7.2% in the coming 12 months. Likewise, they expect social media spending to double from 11.7% share of current budgets to 22.2% of budgets in the next 5 years, even though the report shows how actual spending is failing to keep up with those projections.

It goes without saying that obtaining those budget increases will be a fraught proposition – or at least somewhat more difficult – without a good sense of the impact of that spending.

What’s interesting to see is that CMOs don’t seem to be pursuing what’s being touted as the solution to the ROI struggle: marketing analytics.

To wit, analytics is only included in 44% of CMOs’ budgets. And only slightly more than one-third (34.7%) of CMOs’ decisions are made using marketing analytics as of this latest edition. That figure simply hasn’t changed over the past 4-odd years, ranging from a low of 29% to a high of 37% (troublingly set in February 2012).

DukeCMOSurvey-Percentage-Decisions-Using-Marketing-Analytics-Aug2016

As a result, the use of marketing analytics isn’t contributing much to company performance. On average, the level of contribution provided by analytics was 3.8 on a 7-point scale, essentially putting it close to the mid-point. Once again, that figure hasn’t changed much in several years.

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Put it another way: logically, the more decisions are made using analytics, the more impact it has on the bottom line. B2C services companies, for example, use analytics in almost half (47.5%) of their decisions, almost double the share for B2B services companies (26.8%). Not surprisingly, then, the average contribution of marketing analytics rates almost a full point higher for B2C (4.3) than B2B (3.4) services companies.

Here’s potentially the most telling point: B2C services companies (those with higher analytics use) are far more likely to say they can quantitatively prove the short-term impact of their marketing spending (55.8%) than B2B services companies (31.5%).

Yes, that does not necessarily mean that the use of analytics is driving a better understanding of ROI. But it’s a highly compelling link…

About the Data: The CMO Survey is conducted online twice a year. The latest survey was fielded from July 12 to August 1, 2016. The survey had 427 respondents, of whom 95% were VP level or above.

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