It has been a long time coming, but there finally seems to be some good news on the measurement front. As pressure continues to build on marketers to prove their worth, respondents to the latest CMO Survey [pdf] are displaying a heightened level of confidence in their ability to quantitatively demonstrate the impact of marketing.
The study – fielded twice a year – asks senior marketers at for-profit companies to describe how they show the short- and long-term impact of marketing spend on their business.
For several years, only 40% or fewer of respondents have reported being able to demonstrate the short-term impact of their spending in a quantitative manner. But in this latest edition fully half of CMOs said they can prove their short-term impact quantitatively.
The ability to quantitatively prove the long-term impact of marketing spend seems to also be improving. In this most recent edition of the survey, more than 4 in 10 CMOs said they could do so. That marks the 5th consecutive edition in which a greater share have done so, all the way up from 29.4% in August 2015.
CMOs’ Ability to Prove Social Media’s Impact Also Rising
ROI proof has long been a problem for social media marketing. So it’s encouraging to see that CMOs are also making some headway in this area, though not without continued struggles.
Almost one-quarter (23.3%) of CMOs now say they can prove the impact of social media on their business quantitatively. While that remains a relatively low proportion, it’s about twice the share from just 2 years earlier, and marks a new high point in the survey’s history.
Overall, close to two-thirds feel that they can prove the impact of social media either quantitatively (23.3%) or have a good qualitative sense of that impact (42.3%). The resulting third (34.4%) who are unable to show the impact yet is down from roughly 45% in prior editions of the report.
Is Increased Use of Analytics the Answer?
One potential reason for an increased understanding of ROI? A greater use of marketing analytics in decision-making. After all, one of the key benefits ascribed to analytics is a better understanding and measurement of ROI.
Respondents to this latest survey reported 42.1% of projects using marketing analytics before a decision was made. That’s up from 37.5% six months ago and 31.6% a year ago, after hovering between 29% and 35% in recent years.
B2C companies appear to be far ahead in the use of analytics: a majority of both B2C services (55.7%) and B2C product (53.8%) companies are using analytics before a decision is made. That compares with fewer than 40% B2B product (37.5%) and service (35.2%) companies.
As a result, analytics is having a greater impact on B2C than B2B companies. On a 7-point scale, B2C services companies rated analytics’ contribution to company performance as a 4.7, and B2B product companies rated it at 4.6. By comparison, B2B companies are deriving less value, with B2B services companies rating analytics’ contribution a 3.9 and B2B product companies rating it a 3.7.
Perhaps it’s no wonder then that B2C companies generally are more confident in their ability to prove ROI than their B2B counterparts…
About the Data: The CMO Survey is fielded biennially and is sponsored by Duke University’s Fuqua School of Business, the American Marketing Association, and Deloitte. This latest edition – the 20th – is based on 362 top US marketers at for-profit companies, 98% of whom are VP-level and above. The survey was fielded from January 9-30, 2018.