2006 Marketing ROI and Measurement Trend Study to be Released
Monday, 08 May 2006
The 2006 Marketing ROI and Measurement Trend Study shows a significant increase in the number of companies measuring marketing ROI and the financial contribution of marketing. The study measures changes in the emerging discipline of marketing profitability management. A joint effort by MarketingProfs and Lenskold Group, the comprehensive study will be released in late May.
The initial analysis and the aggregate survey data are available now at MarketingProfs.com. “There has clearly been a shift from companies exploring and seeking information on marketing ROI to now launching actionable ROI measurement and analysis processes,” said Jim Lenskold, founder and president of Lenskold Group. “Companies need profitable growth, and this disciplined approach to prioritizing and managing the marketing spending is a huge opportunity for marketing departments to step up and deliver.”
Lenskold said the 2006 study provides an understanding about the current state of marketing measurement among practitioners worldwide. Last year’s study showed that marketing ROI measurement was then in the early stages with low penetration. However, the 2006 study shows a sharp increase in progress over the past year.
“There is a saying that companies know half of their marketing budgets work, but they are not sure which half. This uncertainty does not sit well with corporate executives managing their resources, which hurts marketing’s credibility. Marketing departments are beginning to sketch out what works and what doesn’t by using controlled experiments and analyses to see what is most effective,” said Roy Young, director of strategy and development for MarketingProfs.com.
Challenges such as linking marketing activities to actual purchase activity and getting accurate measures of incremental impact continue to be cited by marketers. Yet measurement methodologies such as market testing (experimental design) and modeling, are often under-utilized. Lenskold attributes the adoption of measurement methodologies and the barriers to implementing marketing ROI as a combination of perceived challenges and resistance to change within the marketing organization.
“The advancements in technology and data accessibility in recent years have made measurements and analysis easier, but the culture of the marketing organization has not caught up, especially for companies that lack internal experience and expertise with the emerging practice of measuring financial contribution,” said Lenskold.
Key findings in the study include:
- Companies that describe their ability to measure financial returns generated from marketing as either “as good as it needs to be” or “a real source of leadership” jumped from 8% to 16%, whereas companies indicating their abilities were “a long way from where it could be” dropped from 53% to 42%.
- The profit potential remains high with 74% of those measuring financial returns, indicating that profits can increase by more than 10% with better measurements to capture marketing’s contribution to sales -- a critical opportunity for strengthening marketing’s role in the organization.
- Funding of marketing measurement and analysis is below the right level, according to roughly two-thirds (64%) of the marketers surveyed.
Additional topics the full report will cover include measurement methodologies in use, measurement barriers, the marketing decision process, brand measurements, executive perceptions of marketing contribution, and the use of marketing dashboards.
The MarketingProfs and Lenskold Group 2006 and 2005 studies are based on survey responses from over 800 marketers worldwide representing companies of all sizes and industries.