The ability to demonstrate a quantifiable return on investment (ROI) of marketing is a powerful tool. It will help you prove the value of your efforts, as well as secure greater investment in your marketing.
Yet, with fewer than one in five marketers reportedly lacking confidence in their ability to measure and prove ROI, the industry is still struggling to establish its worth.
So, what’s the problem and what’s a curious marketer to do?
Who Cares About the ROI of Marketing?
Most marketers understand why measuring the ROI of marketing is important. In fact, a recent global Xaxis study found that:
- 81% of marketers deem it essential to drive direct correlations between their digital campaigns and strategic business goals
- 80% said their ability to meet business objectives affects their marketing budgets
Admittedly, it’s not a great surprise that marketers care about the ROI of marketing… but they’re not the only ones! Stakeholders and leadership teams also want proof that the resources they’re investing in marketing are not being wasted.
There’s no surer way to prove your profitability to others than by reporting on ROI. Demonstrating your direct contribution to business objectives can open doors to:
- Bigger marketing budgets
- Rewards for your work
Challenges with Demonstrating the ROI of Marketing
The desire to measure marketing ROI is clearly there, so why are marketers lacking confidence when it comes to it?
Some of the common challenges that marketers battle every day are:
- Conflicting Technologies – data is sometimes stored in multiple technologies that don’t integrate, making data collection manual and comparison of information difficult
- Data Silos – when data is collected by different internal teams who work in silos and lack communication
- Issues with Attribution – the consumer journey is often long and complicated with many touchpoints. Using last-click attribution is inadequate (where the action is credited to the most recent touchpoint)
- Team Crossovers – it’s frequent that marketing and sales contribute cohesively to prospecting, lead generation and lead nurture. It can be difficult to know where to attribute the end conversion
- Problems Accessing Data – when third-party data processors are involved, data can be difficult to access or provided in an unhelpful format (like .pdf)
- Skill Gaps – data can often be overwhelming and confusing (big data in particular). Understanding and interpreting it is a skill
- Inadequate Tracking – when the implementation of tracking misreports, inflates results or is not carried out against company objectives
What’s a Marketer to Do?
It’s comforting to know that if you’re facing difficulties measuring the ROI of your marketing, you’re not alone. But what matters most is where you go from here…
We’re sorry to say that there’s no quick fix or simple mathematics equation if you want the ROI of marketing to be accurate. Most marketers use multiple tactics, technologies and channels. So, when it comes to measuring ROI, you need to be careful to take every touchpoint into account and fully understand the impact of each one.
This is particularly important if you want the ability to:
- Attribute every penny you spend
- Identify ways to reduce budget wastage
- Recognise where to invest additional resources to increase performance
If you really want to get it right, the best way to go about it is in one of two ways:
1. Develop In-House Expertise
Measuring ROI of marketing is a skill and a pretty scientific one at that! So if you want to have an in-house expert who can report on the ROI of your marketing, you’ll likely need to invest in training for your current staff. Alternatively, you could consider a new hire who already has experience in this area.
The problem with this is that you’re back to square one if the staff member leaves your organisation.
2. Invest in External Expertise
One way to ensure your ability to measure ROI doesn’t walk out the door with a single employee is to enlist external help. It could save you a headache or two if an external agency or consultant does the leg work for you; bringing together all your technologies, people and processes holistically.
Bear in mind that any external help worth their salt will ensure you always remain in control of your data. Ideally, they’ll also provide you (and all other stakeholders) with an easy way to access the data you need, in a format that you can easily understand.
Although external expertise may require a higher investment in the short-term, it could save you significant time and frustration in the long run. Make sure to check they’re fully qualified analytics experts though!
“What is clear is that, while marketers are comfortable using the straightforward metrics they have today, they hunger for new ways to measure their efforts to understand the real effect on their business.” Nicolas Bidon, Global CEO, Xaxis, A Global Study of How Marketers Prove the Value of their Digital Media Investments
As the quote says, it’s not that marketers are lacking the desire to measure the ROI of marketing. We know it’s often that they’re stuck when it comes to next steps.
Although 2018 was predicted to be the year for marketing to shed its “colouring-in department” nickname once and for all, it seems there’s still a way for the industry to go. If marketers are truly ready to uncover their ROI, putting the necessary measures in place must be made a priority now.
This is why we’ve spent the last two years working with Google to develop a way of accurately tracking the ROI of marketing. By leveraging the most advanced features of Google Analytics and Google Tag Manager, we’ve evolved a complete solution for aligning every technology, person and process.
Get in touch if you want to accurately measure the impact of your marketing activities. We can help you unlock the full potential of what you’re already using, without making any big changes or implementing anything new.
Isn’t it time you started seeing the full, transparent picture?