Economy Increases Demand for Marketing Measurements and ROI Analysis

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2009 Marketing ROI & Measurements Study shows advantages for companies with financial, analytics, measurement, and operations support.

using customer analytics to improve marketing effectiveness

CEOs and CFOs are making greater demands than last year for marketers to show a potential return on investment (ROI) as part of securing budget, according to 65% of the 601 marketers surveyed in the Lenskold Group / MarketSphere 2009 Marketing ROI & Measurements Study released today. Current economic conditions are putting pressures on marketers to better understand their marketing effectiveness as 8 in 10 marketers (79%) report that the need to measure, analyze, and report marketing effectiveness is greater in 2009. However, budget pressures are evident with 6 out of 10 (59%) indicating that this higher demand for measuring marketing effectiveness is not budgeted for the necessary measurement efforts and the other 2 out of 10 indicating they are appropriately budgeted.

This 5th annual research report on marketing ROI and measurements examines the influence of the economy, marketing operations, marketing practices, and strengths in generating insights on marketing performance and growth. Companies that are outgrowing their competitors are much more likely to have a staff dedicated to marketing operations, use marketing ROI and profitability metrics to assess marketing effectiveness, and have campaign management automation. Leadership plays a critical role as one of the most significant difference in companies outgrowing their competitors compared to those with slower growth was in the proportion reporting they "have financial and resource support from the executive team to improve marketing ROI measurement and management capabilities" (50% vs. 33%).

Companies that indicated their marketing was highly effective and efficient (9% of the total) showed much greater strengths in having data, facts, and insight to better guide marketing spending decisions (75% vs. 33% of all other firms), using good measurements (69% vs. 30%), using customer analytics (65% vs. 31%), and having marketing operations processes to improve the business of marketing (64% vs. 29%).

Having staff dedicated to marketing operations makes a significant difference as these companies are more likely to report highly effective and efficient marketing (11% vs. 5%) and more likely to report outgrowing their competitors with 52% outgrowing competitors compared to 46% of those without marketing operations. Firms with marketing operations tend to have greater adoption of marketing ROI measurements and strengths in "using customer analytics to improve marketing effectiveness," "having data, facts, and insight to better guide marketing spending decisions," and "understanding profit drivers to prioritize current budget".

The proportion of companies indicating that they calculate marketing profitability, ROI, or similar financial measures to assess marketing effectiveness has remained steady at roughly one in four (24%). The adoption rates are much more significant for firms reporting highly effective and efficient marketing (54% vs. 23% of all other firms). Over half (51%) of the marketers surveyed report that they estimate ROI of marketing initiatives as part of their planning process, a critical practice in managing and improving marketing profitability.

"We consistently see that the high performing marketing organizations tend to have advantages in marketing operations, strengths in generating insights, and ROI discipline," says Jim Lenskold, president of Lenskold Group and report author. "The economic pressures are increasing the demand for measurements and ROI, and should motivate marketers to improve their capabilities. It is a critical time to understand and manage marketing effectiveness. And as marketers experience the opportunity to improve marketing effectiveness with better insight, we would expect those practices to hold steady and continue on beyond the economic recovery."

"Leading companies realize that to maintain a competitive edge, they must always 'push the envelope,' investing in new tools, methods, and access to new information to drive continuous improvement in their organizations," says Thomas Manders, Group Managing Partner, Enterprise Marketing of MarketSphere." Having worked with some of the world's leading marketers, we know that our clients have realized tremendous benefit from these investments, including increased revenue and a deeper understanding of their business drivers. Clearly companies still face challenges in effectively analyzing and reporting marketing ROI, however, as this report illustrates, those that successfully improve their capabilities become highly effective and efficient and meet the challenge of doing more with less."

The full 35-page report with detailed findings and Lenskold Group recommendations is available at http://www.lenskold.com/2009mROIstudy. The report also includes a sponsor commentary from MarketSphere (http://www.marketsphere.com), the largest and most experienced consultancy dedicated to the field of marketing operations, promoting a vision of marketing transformation.

About Lenskold Group
Lenskold Group offers one of the most comprehensive and innovative approaches to applying marketing ROI techniques and tools to plan, measure and optimize marketing strategies toward maximum profitability. Lenskold Group combines financial discipline and a unique blend of measurement methodologies to deliver practical solutions that establish accountability and credibility for marketing organizations. The company has delivered high-quality consulting and marketing services to generate profitable growth for a broad range of Fortune 500 and emerging mid-market clients since 1997. Our team of accomplished professionals provides cohesive and comprehensive solutions in the area of marketing ROI processes, measurements and analytics. Company President and Founder, Jim Lenskold, is author of the award-winning book, Marketing ROI, The Path to Campaign, Customer and Corporate Profitability. Additional information is available at http://www.lenskold.com.

About MarketSphere
MarketSphere is a business advisory firm with services tailored to help companies achieve their strategic, operational, financial, and technology objectives. MarketSphere's solutions address a broad range of process, technology, and organizational needs within the finance, human resources, supply chain, and sales and marketing functions of its clients, with specialization in strategic business performance, technology integration, and enterprise transformation initiatives. Learn more at http://www.marketsphere.com.

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