Lack of marketing measurement
Nearly half of companies in the UK do not use customer metrics or measurement of marketing to inform board-level decision making, according to a survey of more than 200 senior marketers and executives conducted by the Chartered Institute of Marketing and Deloitte.
The research, Improving Marketing Effectiveness: leading practices in marketing accountability, is a repeat of a study carried out in 2007. It finds very little change in the past three years.
While the majority of respondents measure customer satisfaction and rate of acquisition – 66% and 60%, respectively –just 49% believe executives drive change as a result of marketing or customer measures.
Eighty percent agree that their organisation’s marketing strategy is aligned with the overall corporate strategy. However, only 37% think their business strategy is clearly translated into marketing objectives.
“Our research really begs the question ‘what’s the point of measuring marketing?’ if companies are not going to take decisions based on that insight,” says Nick Turner, head of marketing effectiveness at Deloitte. “With half the organisations surveyed not using customer and marketing measures, boards should ask themselves what really drives their decision making process before pointing the finger of accountability at the marketing department.”
Reasons for the research
With a resurgent focus on marketing effectiveness, Deloitte and The Chartered Institute of Marketing joined forces to explore how improved accountability and measurement could support business’ desires to drive growth and higher performance through customer focus and a more strategic approach to marketing investment.
Fragmentation in communication channels, growth in online media, increasing cost of capital, and an accelerating pace of change in customers and markets are just some of the reasons for business leaders’ increased focus on marketing effectiveness.
Calls for increased accountability and investment justification are amplified by the recent recessional conditions and are likely to increase over coming years, as markets continue to change and the profound effects of our current economic cycle impact customer and consumer values, attitudes and behaviours over the longer term.
Tough times have brought with them an increased scrutiny of how organisations make money, says the report, but marketing is often the first budget to be cut in times of need, and with the context of the previous recession marketers need an evidence based reply to the question ‘how do we account for or justify marketing investment?
This important issue was identified previously in 2007 when Deloitte conducted a pan-European study into marketing effectiveness involving over 200 C-Suite respondents from large scale organisations. Entitled ‘Marketing in 3D’, its insights included that:
– 77% of respondents did not believe their employees fully appreciated the value of marketing
– Only 20% of the survey base believed their current key performance indicators were the right ones to measure the true success of marketing
In addition, a study of 50 global organisations by The Chartered Institute of Marketing in 2009, entitled ‘In Search of a Strategic Role for Marketing’, found two concurrent insights:
82% of Marketing leaders were dissatisfied with the role and positioning of Marketing within their organisations
Only 5% of Marketing structural change between 2006-08 was based on feedback from measurement systems
an accelerating pace of change in customers and markets are just some of the reasons for business leaders’ increased focus on marketing effectiveness and returns.
In 2010, the picture is little different. Nearly half (49%) of companies are not yet using customer metrics or marketing metrics to help inform board-level decision making, leading to a general sense of C-level disappointment with the marketing function, according to the report.
“Measuring the impact of marketing investment is an investment in itself; it takes time, expertise and budget – all of which are in short supply,” added Thomas Brown, head of insights for the CIM. “If half of businesses aren’t using what their metrics tell them to drive change, their leaders should be asking ‘do we have the wrong metrics, or do we have an education imperative within the business?’. In many cases, it may be the latter – an area often overlooked.”