The marketer’s rise into the C-suite has been an uphill climb. Over the past decade or two, the role of “Chief Marketing Officer” in senior management has been hindered by persistent questions about the value of marketing and how to better manage the investments.
It’s no surprise then that in a recent report, 80 percent of CEOs say they’re not satisfied with the work done by marketers – while in comparison, 90 percent of the CEOs value and trust the work of CFOs and CIOs. More specifically, CEOs have serious concerns about the ability of CMOs to measure and drive return on investment (ROI) of marketing programs. And CMOs acknowledge the problem, with 57 percent reporting that they don’t base their marketing budgets on any ROI analysis. Is it any wonder that the average tenure of a CMO has dropped to an all-time low average of 12 months?
But there is hope. The path to CMO redemption is grabbing hold of a data-driven, ROI strategy. Thanks to the new wave of digital marketing management tools, today’s CMO has the ability to measure, normalize, and rationalize marketing programs – demonstrating a clear and compelling marketing ROI – to silence critics and build respect in the executive suite.
While the goal of ROI isn’t novel, a new wave of products, people, and processes has emerged to actually measure ROI from media investments across channels, and act on it to reduce marketing waste and increase sales. Here’s how to get started:
- Get into the data game. Use the new data management and measurement tools, like data management platforms (DMPs), to collect the torrents of impression-level consumer data generated from your owned, earned, and paid digital media. If you’re not doing this now, you’re squandering a strategic asset that is readily available to you. Digital behavioral data can give you answers to questions like: Who and where are my highest-value customers? Are they loyal or considering moving to a different brand? What digital experiences accelerate their journey to becoming a loyal and profitable customer? What are my customers’ desires and preferences beyond my brand?
- Turn the insights into actions. Charts and reports are fine, but in the era of big data you need to use new tools, like demand-side platforms (DSPs), that enable you to move from insight to action quickly and inexpensively. These tools discover insights and apply learnings to marketing initiatives in real time. They also make it possible to measure ROI quickly by running A/B tests that compare optimized results against a baseline. And it’s not about clicks anymore; it’s about sales of your product online and offline. The new measurement tools allow a marketer to optimize digital media investments against gross-rating-point goals, and even in-store sales.
- Build the business case. Equipped with tangible ROI, use your skills as a marketer to make sure corporate leadership is informed, and impressed by the results. Go for quick wins that show favorable unit economics in controlled settings. For example, you might pilot a data-driven approach with simple banner ads before extending it to more expensive video investments. Then scale up your efforts across channels based on a business case that has support. Know that “touchy-feely” results like increased Twitter followers or Facebook “likes” might cause an eye-roll, and tangible ROI like more leads, better conversion rates, and increased revenue with lower cost per acquisition will get attention and bring credibility.
Beyond optimizing media investments, many of the best use cases for using big data to improve enterprise productivity are in marketing, giving CMOs a great opportunity to become strategic leaders running key CEO agenda items. Applications include site personalization, product recommendation engines, forecasting customer churn, and dynamic pricing and promotion management. Imagine your CEO turning to you, the CMO, to lead the firm’s big data strategy.
Big data may seem daunting because big data is, well, big and complex. But with the right partners and right innovation agenda it’s easier than you may think. Today’s solutions not only handle the petabytes of data flooding past you, but more importantly quickly process it to create ROI. And in today’s business reality, it’s the speed of what you can do with the data that gives you competitive advantage.
Having a data-driven ROI strategy isn’t a “yes” or “no” question. The real question is “when” and “how” you will embrace it. It’s the only path forward for CMOs who want to – no, have to – start reinventing themselves in order to survive and thrive at the corporate leadership table, by building trust and demonstrating indisputable value with real dollars supported by real metrics.
Change Just Ahead image on home page via Shutterstock.
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