Are You Tracking Your Return on Marketing Investment (Marketing ROI)?

Historically, marketing organizations have been viewed as cost centers. However, that is changing. Thanks to the maturity of CRM tools such as Salesforce and the emergence of Marketing Automation and Analytics tools it is now a lot easier to track the true cost of Marketing and calculate your ROI.

CMOSurvey.org just published its August 2011 survey results of top marketers used to predict the future of markets, track marketing excellence, and prove the value of marketing in society. There were some interesting nuggets in the survey pertaining to Return on Marketing Investment, or simply, Marketing ROI. I've extracted the information from slides 26 and 27 and created a couple of graphs included below.

The CMO survey is conducted twice a year via the internet and is sponsored by the American Marketing Association and The Fuqua School of Business at Duke University. The survey was conducted between August 1st-23rd, 2011, and was sent to 3500+ top marketers at Fortune 1000 and Forbes Top 200 companies, to top marketers who are members of the AMA, and also to Duke University alumni and friends. 249 individuals or 6.8% of the invitees responded to the questions. About 83% of the respondents were VP-level or above.

The most interesting piece of information as seen in the chart above was that over the past 3 years Marketers have been able to increase their ROI and the forecast over the next 12 months is even brighter. This trend might mean that marketers are getting better at proving themselves as profit centers and getting better at tracking metrics.

This second chart shows the ROI by sector, comparing B2B vs. B2C products and services, with B2C services showing the highest ROI in the last 12 months.

All Is Not So Well

At the same time, the CMO Council just published their 2011 State of Marketing Outlook report. The chart below caught my eye. In spite of all the optimism around ROI in the previous charts, it seems that only 5% of marketers rate their marketing performance as "excellent with high ROI and strong metrics for measurement in place."

On page 3 of the executive summary, in 5 of the top 7 bullets, respondents struggle with issues that directly impact ROI. They state they are either challenged by or struggling to deal with:

• Limited access to siloed customer data; internal competition over data sovereignty
• Making sense of vast volumes of data; extracting and applying insight and intelligence
• Legacy technology issues that make real-time data access and utilization difficult
• A crop of hosted, SaaS solutions that are easy and inexpensive to deploy without IT help
• A point solution orientation -- CRM, e-mail marketing, Web analytics, campaign management

The CMO Council study was authored by Deloitte. The number of respondents was not included in the executive summary, but page 24 on out includes demographics broken down by percentage. Over 65% of the respondents were VP-level for Marketing or above.

Takeaways

It seems that the news here is bittersweet.

• Tools and technology are available for organizations to do a better job at tracking ROI.
• Marketing leaders are still struggling to leverage these available technologies and make sense of their data.
• Only a small percentage of organizations rate themselves as doing an excellent job tracking ROI.
• It remains to be seen if the ROI is significant enough. In certain industries, unless there is a 2x-3x return on investment, your marketing is not doing enough for you.

It's Your Turn

How are you tracking your Marketing ROI? What tools are you using and how are they working out for your organization? Please share your thoughts in the comments.