"Half the money I spend on advertising is wasted; the trouble is I don't know which half.”
So said department store magnate John Wanamaker. Or was it William Hesketh Lever of Lever Brothers fame, Henry Procter of Procter & Gamble, or Henry Ford? The statement has been variously attributed to each of these titans of late 19th and early 20th century industry and commerce. Who knows, maybe they each came up with it independently in a stunning example of the hive mind at work.
A century or so later, marketers are much more adept at showing tangible results of their expenditures, thanks to the increasingly sophisticated metrics provided by marketing automation and CRM systems.
But a recent report from Forrester Research, “B2B Measurement Needs an MBA,” shows they're still having trouble making their case to their bosses and C-suite peers—or even getting their attention at all. The report was based on an online survey in May of 174 b-to-b marketing leaders in 10 industries, conducted jointly by Forrester, the IT Marketing Association and VisionEdge Marketing.
The survey results clearly show that most marketers don't believe they're getting through to their CEOs and CFOs. Sixteen percent of respondents said their CEO “does not use marketing data at all.” That was at least better than the 25% who said the same of their CFO. Asked whether top-level executives rely on marketing data to make decisions, only 8% said the CEO does, and a scant 4% said the same of their CFO.
Forrester VP-Principal Analyst Laura Ramos, the author of the report, cites the 50% lament—crediting Wanamaker—when she writes that “the inability to demonstrate a clear link between marketing activities and business results continues to plague marketing leaders to this day.”
What's needed, Ramos says, is for marketers to focus less on measuring past performance and more on predicting outcomes. While marketers shouldn't take things to the extreme of Ford, who once famously said that “history is more or less bunk,” they need to keep their eye on the future when analyzing the billions of bytes of historical data they're gathering.
“Tracking the historical revenue impact of programs, campaigns and events helps marketing prioritize spending and account for results, but don't stop there,” Ramos writes. “B-to-b CMOs should look beyond return on marketing investment [ROMI] to include factors like preference, loyalty, market share and brand sentiment when showing marketing's full impact on the direction and health of the business.”
Ramos advises marketers to work with their sales and service peers to determine the tools and processes needed to learn what makes customers valuable long term. “Using this information,” she writes, “plan to shift some of your 2014 marketing budget to focus on communicating targeted messages and offers to prospects that closely fit this profile.”
By revamping their focus in this manner, marketers may go a long way toward reducing that wasted one-half.
John Obrecht is editor of BtoB. He can be reached at firstname.lastname@example.org.