ImpactWatch Blog

Lenskold Group and MarketSphere’s “2009 Marketing ROI & Measurements Study” surveyed 601 marketing professionals on the influence of the economy, marketing operations, marketing practices, and individual firm’s marketing strengths on overall marketing performance and growth.

The study found that “companies with marketing operations, analytics, and ROI metrics in place are generally showing up as having highly effective and efficient marketing and more likely to be outgrowing their competitors.”

Growing Demand for ROI

• 65% said that CEOs and CFOs are more frequently demanding ROI as a part of securing budgets for marketing initiatives.
• 79% felt an increased need to measure, analyze and report marketing effectiveness in 2009 compared to previous years.

Measurement Necessary for Growth

The study showed that one of the most marked differences between high and low growth firms is the financial and resource support provided by executive teams to “improve our marketing ROI measurement and management capabilities” (50% greater growth companies vs. 33% slower growth companies ). High growth companies also reported strengths in measurement areas such as “understanding profit drivers to prioritize current budgets” (47% vs. 27%), “using customer analytics to improve marketing effectiveness” (41% vs. 22%), and “using good measurements of marketing effectiveness to prioritize top marketing campaigns” (41% vs. 24%).

Budget Constraining Measurement

Despite the importance of a strong measurement and analysis program, most firms lack financial support for these initiatives.

• 59% felt the need to measure ROI was greater than ever but were not budgeted for the necessary effort.
• Only 20% said the need to report marketing effectiveness was higher and their budget was adequate.
• 2% of marketers dedicated at least 30% of their budgets to measurement and analysis.
• 31% have 0% budget allocation for measurement.
• Half (54%) of respondents had between 1-10% of the marketing budget set aside for measurement.

Marketing ROI Adoption Remains Flat

Companies calculate marketing profitability, ROI, or a similar financial measure to assess marketing
Effectiveness remained steady at 24%. ROI adoption was considerably higher for firms reporting highly effective and efficient marketing (54% vs. 23% of all other firms) and for companies outgrowing their competitors (30% vs. 20% for slower growth companies).

Additionally, twice as many firms (51%) are estimating ROI in planning compared to calculating ROI as an assessment of effectiveness. The practice of ROI estimation was employed by 81% of firms claiming to have highly effective and efficient marketing, compared to 48% of other firms.

Recommendations for Measuring ROI

• Estimate ROI potential in the planning stage.
• Invest in measurements and analytics with immediate payback.
• Increase experimentation and testing.
• Prepare for aggressive competition during the recovery.
• Pursue efficiency and effectiveness.

Follow Hannah on Twitter. (disclosure: not technically a recommended step for measuring marketing ROI)

Tags: Lenskold, marketing effectiveness, marketing operations, marketing practices, marketing profitability, Marketing ROI, Marketingsphere, ROI measurement

This entry was posted on Thursday, June 18th, 2009 at 2:23 pm and is filed under marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.