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Majority of CEOs Say Marketers Not Focused Enough on ROI

by MarketingCharts staff
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The upshot of this is that 8 in 10 CEOs believe marketers are disconnected from companies’ financial realities, and as a result, the same proportion claim they do not trust and are not very impressed by the work done by marketers.

CEOs’ concerns regarding marketers’ focus on ROI finds some basis in marketers’ own perceptions. According to a March 2012 report from Columbia University’s Center on Global Brand Leadership and the New York American Marketing Association (NYAMA), 57% of senior marketers say they don’t base their marketing budgets on any ROI analysis. In fact, roughly two-thirds report establishing their marketing budgets in part on historical spending, and 28% on gut instincts. And when looking at specific spending decisions, 21% say they use financial metrics for little or none of the decisions, while 7% are making most or all of the decisions absent any metrics at all.

CEOs Want Attention Paid to Marketing KPIs

Data from the Fournaise Marketing Group’s “2012 Global Marketing Effectiveness Program” indicates that 82% of B2C CEOs want B2C “ROI marketers” (100% focused on ROI) to focus on tracking, reporting, and enhancing the following key performance indicators: sell-in; sell-out; market share; and marketing ROI (which is defined as the correlation between marketing spending and the gross profit generated from it.)

Similarly, 85% of B2B CEOs (and B2C CEOs in prospect-driven industries) want ROI marketers to focus on the same metrics, as well as the business potential generated by marketing.

Most CEOs Skeptical of Digital Media’s Utility

The NYAMA study (see link above) also found that most senior marketers are lagging when it comes to ROI analysis of new digital tools, and CEOs seem to share that view. According to the Fournaise Marketing Group’s survey, about 7 in 10 B2C CEOs believe that B2C marketers are too enamored by metrics such as likes, tweets, and followers, which they cannot prove generate more business-quantifiable consumer demand, and therefore are not considered critical by CEOs.

B2B CEOs – including B2C CEOs in prospect-driven industries – are similarly skeptical, with 71% saying that B2B marketers’ focus on latest marketing technologies (such as marketing automation and CRM) isn’t resulting in the incremental demand expected.

These CEOs feel that marketers need to view technology more as a support tool, and focus instead on crafting strategies and campaigns with winning propositions. Similarly, marketers should move away from focusing on what CEOs consider to be sales indicators, such as conversions and revenue, and instead pay attention to customer demand-related indicators.

Other Findings:

About the Data: The Fournaise Marketing Group data is based on interviews with more than 1,200 large corporation and SMB CEOs and decision-makers in North America, Europe, Asia, and Australia.