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An Executive Summary of the 2006 Marketing ROI and Measurements Trend Study (Marketing Profs)

Lenskold Article Series

by Jim Lenskold

An Executive Summary of the 2006 Marketing ROI and Measurements Trend Study (Marketing Profs)

The buzz about marketing profitability measurement in previous years is certainly turning to action in 2006. At this point, companies not pursuing some form of financial measurements are in the minority. There are still 4 in 10 companies that consider themselves “a long way from where they should be” in terms of their ability to measure financial returns and another 4 in 10 that are “somewhat short of where they could be,” so the industry is in the early stages of the marketing profitability measurement journey.

 

Our objective of this study was to take the pulse of the industry. The original study in 2005 showed signs of life and now we see a strengthening heartbeat. The progress overall is inspiring and certainly demonstrates an evolution within the marketing practice.

 

The key findings can be summarized as:

 

  1. Capabilities to measure marketing’s impact on financial returns increases significantly since 2005.
    Marketers that describe their capability to measure financial returns of marketing as “a real source of leadership” or “as good as they need to be” increased from combined totals of 8% in 2005 to just over 16% in 2006. This was matched with a significant drop in the percentage of marketers describing their capability as “a long way from what it should be” (a decrease from 53% to 42%).

  2. Providing budget for marketing measurement and analytics showed slight improvement but continues to be a problem.
    Only 17% of marketers indicate their budget for marketing measurements and analytics is just right. Two out of three (64%) indicate this is slightly or far below the right level. Just 8% believe it is slightly or far above the right level. While it is discouraging to see a gap in the right amount of funding for an investment that can unlock significant profit potential, the glimmer of hope is the improvement over 2005, where 78% had indicated being under-funded.

  3. CEOs and CFOs have increased confidence that marketing investments are profitable, according to marketers surveyed.
    The percentage of marketers indicating their CEOs and CFOs are somewhat or very confident that marketing investments are profitable increased from 62% to 71% over the past year. Of the companies reporting they measure marketing profitability, 31% report that their CEO and CFO are very confident compared to 16% of those that do not measure marketing profitability.

  4. The ability to link brand measures to incremental sales and profits has increased over the past year.
    Marketers reporting their ability to make this brand measure link as “a real source of leadership” or “as good as it needs to be” increased from a combined total of 6% in 2005 to 15% in 2006. Those who considered their position as “a long way from where it should be” dropped from over two-thirds (65%) in 2005 to 42% in 2006.

  5. Marketing organizations that calculate ROI, net present value or other profitability metrics to assess marketing effectiveness report high CEO and CFO confidence and a high perception of accountability.
    There were 26% of the marketers surveyed that indicated their organizations calculate ROI or similar financial metrics for at least some portion of their marketing campaigns. Of this segment, 31% reported that their CEO and CFO were very confident that their marketing investments were profitable while only 16% of the marketers that do not calculate ROI or similar financial metrics indicated a very high level of confidence. In organizations calculating ROI, 28% of non-marketing executives were reported to view marketing as highly accountable, while this was just 15% in organizations not calculating ROI. One reason this group may be better positioned to calculate the ROI of marketing initiatives is that more reported having the right budget level compared to organizations that do not calculate ROI (26% vs. 15%)

  6. The expected profit potential from improved marketing measurement experienced a sharp jump in the “greater than 25%” category.
    When those measuring marketing profitability were asked “If measurements were in place to capture marketing’s contribution to sales, how much profit improvement would you expect?,” the percentage reporting “very high (profit improvements greater than 25%)” increased from 12% in 2005 to 28% in 2006. Another 46% expected increases of 10% to 25% profit improvement. Only 8% believed there was no opportunity for profit improvement.

  7. Those marketing organizations that launch new marketing campaigns using market tests over intuition are even stronger in confidence from the CEO and CFO and are reported to have greater accountability.
    One segment from our analysis that stood out was the set of respondents defined as those marketers that answered the question “Which best describes your organization’s typical approach to launching new marketing campaigns?” with the response “campaigns are first market tested to a small segment of the target audience for a quantitative assessment.” Just 14% selected this response and they showed incredibly high performance on our assessment questions compared to the balance of the participants that selected “campaigns are rushed to market based on the limited intuition of a few people” (38%), “campaigns are assessed against a large team’s intuitive knowledge” (30%) or “campaign creative / concepts are tested in qualitative research” (13%).Even more so than the segment of respondents calculating ROI, this segment of “market-testers” showed stronger results in all different areas including greater effectiveness at measuring financial returns, higher incidence of calculation of financial metrics, higher use of marketing methodologies, greater CEO and CFO confidence and better perceptions of being highly accountable. They were also more likely to indicate their marketing measurement and analytics budget was “just right.” Running market tests as part of new campaign launches is not what drives increased adoption of financial measures or even greater credibility with executives. It is however, a good indicator of a marketing culture that values disciplined measurements, ROI analysis, and financial accountability.

In our opinion, the positive momentum identified in this study is likely to continue. Why? Because corporations need sources of profitable growth and improving measurements helps unlock additional profit potential.

 

Improvements in data access, analytics, measurements, and financial assessments must continue to be important to move past the noted barriers to measuring marketing profitability. As companies work to make marketing profitability measurement a guide to their growth, they can benefit from the discipline of:

1. Developing better projections of marketing’s financial contribution
2. Creating tighter integration across marketing programs and even with the sales organization
3. Taking a greater role in maximizing customer value
4. Seeking to measure and understand marketing’s impact at a deeper level

Companies that share their marketing ROI success stories at industry events or in articles almost always state that they still have further to go. It’s not because their work is incomplete but because the success they have already achieved makes it clear that additional progress will lead to additional benefits. Look closely at these trends in financial measurements for marketing and, regardless of where you are at on your marketing ROI journey, consider what progress you can make in this and future years.

Access the full report: 2006 Marketing ROI & Measurement Study.

© Lenskold Group Inc. & MarketingProfs, LLC.

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Archived Research

2011 Marketing ROI & Measurements Study

Lenskold Article Series

by Jim Lenskold

2011 Marketing ROI & Measurements Study

In this research archive, we focused on social media measurements as part of broader marketing ROI measurements.

 

  • How do marketers rate in their capabilities to measure social media outcomes?
  • What is driving the high and low prioritization of social media measurements?
  • How has the use of marketing ROI to assess general marketing trended over the past 5 years?
  • How are marketing ROI metric users showing better capabilities for social media measurements?

Here is a graph of a key finding:

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2012 B2B Lead Generation Study – Automation Supplement

Lenskold Article Series

by Jim Lenskold

2012 B2B Lead Generation Study – Automation Supplement

This research archive is a supplement to the 2012 research study that digs deeper into the role of marketing automation in supporting marketing ROI measurements.

 

  • How do companies with marketing automation integrated with CRM systems compare to those with no marketing automation and those with automation that is not integrated in terms of growth, revenue and other key outcomes?
  • What practices and capabilities are adopted to support marketing automation?
  • What key metrics are used with the support of marketing automation to manage marketing effectiveness?

Research Highlight:

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Archived Research

2012 B2B Lead Generation Marketing ROI Study

Lenskold Article Series

by Jim Lenskold

2012 B2B Lead Generation Marketing ROI Study

This research archive examines how marketing ROI and measurement practices align to revenue contribution and lead generation key metrics.

 

  • What practices and key competencies differentiate the best practice group of Highly Effective & Efficient marketers?
 
  • What capabilities are most critical to help marketing automation generate an increase in key lead generation outcomes?
 
  • What can marketers do to influence Total Marketing Revenue Contribution as an outcome?

The full report includes detailed findings and recommendations.  Highlights from the findings include:

 

  • Marketing automation users that also use ROI metrics to assess effectiveness are much more likely to realize an increase in Total Marketing Revenue Contribution from their automation.
 
  • The best practice group of “highly effective and efficient” marketers are more likely to attain a strategic level of marketing support from their automation, with CMO support and Sales team integration.
 
  • Highly effective and efficient organizations have strengths in key capabilities that support high performance marketing.
 
  • Lead generation marketing effectiveness increases with marketing automation.

Here is a sample of the results in this report:

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2013 Lead Generation Marketing Effectiveness Study

Lenskold Article Series

by Jim Lenskold

2013 Lead Generation Marketing Effectiveness Study

A Lenskold Group Report Sponsored by:

Research Report

The focus of the 2013 Lead Generation Marketing Effectiveness Study was on content marketing and how processes, practices, marketing automation and measurements influence marketing performance. Insights are derived through a comparison of marketers with “highly effective and efficient” marketing organizations (the top 13%) to all other marketers. The research was conducted with 3233 B2B lead generation marketers who generate leads for a sales organization or external channel partner, recruited with the support of Demand Gen Report and Pedowitz Group.

 

The full report includes detailed findings and recommendations.  Highlights from the findings include:

 

  • Top tier marketers show strengths in content marketing practices and take performance further by leveraging high-impact capabilities that marketing automation enables.
 
  • Lead scoring ranks as a primary driver of revenue from content marketing for top tier marketers and those with integrated marketing automation.
 
  • Companies outgrowing competitors have a slight advantage in measurements of incremental revenue and ROI from their content marketing.
    Content marketing measurements are dominated by basic tracking and simple attribution.
 
  • Top tier companies and marketers with integrated marketing automation are more likely to measure all forms of engagement outcomes from content marketing, including sales conversion.

The details on how lead generation marketers are making their content marketing more effective and efficient are both surprising and insightful. Download the complete 2013 Lead Generation Marketing Effectiveness Study now for all the details.

Lenskold Group Overview

For an overview of how Lenskold Group can help your organization adopt the best practices proven to drive highly effective and efficient marketing check our Lead Generation Measurement services. Or contact us and we would be happy to discuss any of your questions on lead generation measurements and ROI.

Charts

Below are several charts and graphs from this study.

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Archived Research

2005 Marketing ROI & Measurement Benchmark Study

Lenskold Article Series

by Jim Lenskold

2005 Marketing ROI & Measurement Benchmark Study

Our first research study back in 2005 set the baseline for use of Marketing ROI and measurement practices.  
  • Benchmark research on marketing ROI adoption
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  • What are the primary measurement challenges?
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  • Where is there greater profit potential?
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  • How do marketers drive decisions using intuition vs. measurements, and how does this influence marketing performance?
  •  
  • Recommendations for moving further with marketing ROI adoption

An interesting highlight is how ROI measurement abilities where pretty far from expectations.

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Archived Research

2006 Marketing ROI & Measurement Trend Study

Lenskold Article Series

by Jim Lenskold

2006 Marketing ROI & Measurement Trend Study

The second marketing ROI and measurement study in 2006 showed the initial trends within insight into measurement funding.


  • Which measurement methodologies are marketers using?

  • How does proper funding of the measurement budget influence marketing performance?

  • How does marketing ROI influence executive perceptions of marketing?

  • Recommendations for moving further with marketing ROI adoption with a special section for getting started

Here is the first trend in marketing ROI use we captured. Since the chart is not clear, those saying yes in 2006 was 26% compared to 18% in 2005.

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Archived Research

2007 Marketing ROI & Measurement Study

Lenskold Article Series

by Jim Lenskold

2007 Marketing ROI & Measurement Study

In this research archive, you’ll find additional attention the executive perceptions on marketing’s financial measurements in addition to the points below.  
  • What marketing practices beyond measurements are most important for managing and improving marketing profitability?
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  • How do higher growth companies differ in their use of marketing analytics, value-based targeting, and funnel management?
  •  
  • Recommendations for process areas to improve profitability

Here is a highlight of a finding related to executive confidence.

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Archived Research

2008 Marketing ROI & Measurements Study

Lenskold Article Series

by Jim Lenskold

2008 Marketing ROI & Measurements Study

In this research archive, you’ll find additional detail into data access and quality. 


  • How well are marketers capturing critical data and intelligence?
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  • Where are the marketing data shortfalls?
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  • How does marketing data management influence marketing effectiveness and efficiency?
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  • Recommendations for 10 steps to better leverage data and intelligence

Highlights:

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Archived Research

2009 Marketing ROI & Measurements Study

Lenskold Article Series

by Jim Lenskold

2009 Marketing ROI & Measurements Study

This research was completed in 2009, just after the economic downturn in 2008. The study includes very interesting insight into how marketing ROI and measurement increase in importance when budgets get tight.


  • How is marketing ROI adoption trending over time?
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  • What is the impact of economic changes on marketing?
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  • How does the presence of marketing operations function impact marketing performance?
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  • What characteristics exist for high growth firms and highly effective and efficient marketing organizations?
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  • How can marketing ROI and measurements create a competitive advantage in a slow economy?

Here is a highlight that is very relevant in terms of economic pressures. Download the report for more details.

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