In the next 12 months, senior marketers anticipate significant growth in marketing spending. To justify spending, marketers use various metrics to evaluate the impact of marketing actions. The most recent report from The CMO Survey indicates that engagement and sales metrics are most frequently used to evaluate marketing’s impact.
Asked to distribute 100 points to reflect the degree to which numerous metrics are used to evaluate the impact of marketing actions, one-quarter (24.8%) went to metrics measuring the impact on sales or sales lift, while 22.9% went to engagement related metrics such as clicks, likes, email sign-ups and customer ratings and reviews. And, although a majority of marketers report feeling pressure to justify their spend and budget increases by proving ROI, ROI was a somewhat distant third in the degree it is used to evaluate the impact of marketing actions, at 13.9%.
While companies focus on sales lift, engagement metrics and ROI in order to evaluate marketing impact, they are less likely to use brand equity metrics (6.3%). Indeed, among a list of 26 metrics provided to survey respondents, brand equity value is used the least, with 35.3% saying they almost never measure it. Other brand-related metrics CMOs say they almost never use include brand personality, associations and affinity (29.5%), brand differentiation, customer willingness to pay a premium (21.9% and brand awareness (19.7%).
Earlier research from Econsultancy and RedEye shows that a majority of marketers considered customer lifetime value to be a priority. Despite this, more than one-fifth (22.2%) of CMOs from this more recent survey say they almost never measure customer lifetime value or customer profitability. Of those that do measure it, the largest share do so on an ad hoc basis, while others measure it annually or semi-annually.
One possible reason marketers are not measuring customer lifetime value more frequently is that their ability to do so is limited. A survey from CMO Council and Deloitte Digital shows that only 17% of CMOs thought they tracked customer lifetime value extremely well or very well.
Metrics Used with the Highest Frequency
As for those metrics used on a regular basis, sales and revenues are the most updated metrics of those listed. More than three-quarters (78.7%) of CMOs say they always or consistently measure this component of marketing. Many also always or consistently measure digital/web/mobile performance (54.8%), lead generation (46.8%), content engagement (43.5%) and lead conversion (43.5%).
Some 26.5% of respondents say they always or consistently measure campaign ROI, but a larger share (31.2%) are measuring this on a quarterly or monthly basis. In fact, an earlier report from LinkedIn Marketing Solutions argued that the majority of marketers were measuring ROI too quickly after the start of a campaign.
CMOs Report Increased Responsibilities
Since the pandemic, CMOs have seen marketing’s responsibilities increase. Compared to February 2020, more respondents say that marketing is primarily responsible for areas such as digital marketing, advertising, marketing analytics, and lead generation.
Along with these increased responsibilities, some 42.6% of CMOs say they are asked by the CEO or CFO to participate in board meetings.
The full report can be found here.
About the Data: Findings are based on an August survey of 282 top marketers at for-profit US companies, 94% of whom are VP-level or above.