Whether it be through strategies such as performance marketing, ABM or virtual events, marketers are on a quest to increase ROI. A report [download page] from Allocadia suggests there is a good reason for marketers wanting to improve ROI, with 84% saying that they are under pressure to justify their spend and budget increases by proving ROI for all programs.
The majority (84%) of the US-based marketing and advertising decision-makers surveyed believe that marketing has grown in importance over the past year. This corresponds with earlier research from The CMO Survey that found similar sentiment from CMOs about marketing’s increased importance during the pandemic.
While the importance of marketing appears to have gone up, that doesn’t mean marketers’ efforts are not under scrutiny. They still have to prove that their efforts are having a positive impact on their organization. For most, that means showing their contribution to growth, with annual growth being used by two-thirds to measure the overarching impact of marketing.
However, it’s ROI that the report considers the most critical metric used. Nearly all (96%) of those surveyed say their company uses ROI to assess marketing’s effectiveness, with more than one-third (36%) saying it’s the ultimate metric.
Most Organizations Are Measuring ROI Often
Allocadia’s survey found that marketers are using 5 main data sets to calculate ROI. The most common — used by two-thirds (67%) of respondents — is program influence on revenue or sales. A fair share also use spend against strategic plans (54%) and investment dollars (47%), while fewer use spend against company objectives (34%) and program influence on pipeline (18%).
It appears that, for the most part, marketing organizations are measuring ROI fairly frequently. About 4 in 10 (42%) report measuring ROI monthly, while 37% measure it on a quarterly basis. Only about one-fifth measure ROI every six months (12%) or annually (9%).
However, problems exist in calculating ROI, and many don’t trust their data. Close to half (47%) of the marketing and advertising leaders surveyed say they don’t have the internal skills or ability to calculate ROI. Moreover, 6 in 10 (61%) are hesitant to use ROI to make decisions as they lack confidence in marketing’s data.
Alignment with Finance and Sales Askew
While marketing leaders struggle with calculating ROI, they also face another problem: a lack of alignment with sales and finance on ROI. The struggle towards marketing and sales alignment is long-standing and earlier research reveals that marketing is even less aligned with finance. In this recent report, 43% of marketing leaders say they are not aligned with finance and sales on what the meaning of ROI is.
Furthermore, while 49% say that marketing, finance and sales are aligned on data set, goals, strategies and tools, the remaining share say that they plan to get aligned (48%) or that there is no alignment (3%) on these aspects.
The full report can be found here.
About the Data: Findings are based on a survey of 251 US-based marketing and advertising decision-makers.