31% of global marketers say existing digital metrics do not adequately quantify the financial impact of the online tools or channels they measure on their business, according to a survey released in November 2011 by McKinsey. Data from “What marketers say about working online” indicates that of the executives whose companies are using social media, almost half say quantifying the impact adequately is difficult. These findings are consistent with a November 2011 report from Econsultancy in partnership with LBi and bigmouthmedia, which found that 2 in 5 global companies do not have a return-on-investment (ROI) figure for any of the money they spend on social media marketing, with a further 26% saying they can only attribute an ROI figure to a tiny amount of the money they spend on social media.
Meanwhile, close to one-quarter of respondents to the McKinsey survey struggle with understanding what digital metrics actually measure, while 23% say these metrics do not measure the relevant non-financial levers in their business, such as the intent to purchase again, and the same proportion says they are not as directly comparable with traditional metrics as they would prefer.
Generating Customer Insights Top Digital Challenge
The most important digital-related challenge for marketers – ranked first by the largest share of respondents – is generating and leveraging deep customer insights. The second-most important challenge cited is the difficulty of managing brand health and reputation when social media plays an important role in marketing. Executives appear to be tackling these problems, though: 47% say they have either already addressed their customer insight challenges with a formal plan or are in the process of implementing one, while 43% say the same about their brand health and reputation challenges.
Customer Insights to Drive Competitiveness
According to the report, 71% of respondents say that data-driven customer insights will be very or extremely important to their companies’ competitiveness during the next 2 to 4 years, although just 4% say their companies already have the required capabilities to manage their business effectively. Instead, 38% say their companies have only basic demographic information on each customer, while less than 1 in 5 say their customer data include detailed information such as interests or attitudes.
By contrast, a November white paper from the e-tailing group, sponsored by Bronto, found that just 13% of marketers say the most important factor to elevating their current marketing strategy is customer behavior insights/CRM/data, trailing increased resources such as staffing and funding (18%).
Interaction Abilities Have Improved, Though
Although generating customer insights is a top challenge for executives, more than half of the McKinsey survey respondents say that over the past 2 years, the increasing prevalence of digital media and tools has changed their companies’ ability to interact with and serve new customers, while roughly 2 in 10 say that digital-related marketing has increased their access to data and insights. By contrast, just 17% say they have experienced a greater ability to increase productivity in various business processes through technology.
About the Data: The McKinsey online survey was in the field from October 11 to October 21, 2011, and garnered responses from 792 marketing executives representing the full range of industries, regions, titles, and company sizes. The data were weighted by the contribution of each respondent’s nation to global GDP to adjust for differences in response rates.