The road to making marketing accountable has been perilously slow. In the time of David Ogilvy marketers believed in measurement, their status was high. But many years ago, marketing turned inward and focused on ads. The CMO stopped being a business partner to the CEO. Marketing got dumbed down to being seen as frivolous, a cost center not an investment.
Today marketing’s importance as the driver of revenue and margin growth is not understood. Marketing is not respected. 90% of CEOs trust their CFOs and astonishingly, their CIOs. 80% do not trust their marketers. The result—notoriously short CMO tenures, the proliferation of new titles, reflecting CEO dissatisfaction with marketing and struggle to find a partner in driving profitable growth.
As economic uncertainty accelerates, the CEO’s priority has shifted from growth to efficiency. This has put marketing in a bind. Its costs are very visible, its impact on profits is not. Marketers have been clutching at any straw that looks like it will demonstrate results. Efficiency of spend has been prioritized over effectiveness, short-term over long-term, promotions over brand.
The result is lack of traction, inability to leverage prior investment, leading to suboptimal marketing impact. Short tenure compounds the problem. There is no continuity. Changing CMO means frequently changing tactics, further diminishing impact. The impact that marketing does have is not understood because marketers do not know how to communicate it. They do not speak the language of CEOs and CFOs. Non-financial metrics still predominate over those the firm has to report, like cash flow.
These pressures force accountability to the top of marketers’ agendas. This has come up strongly in the ANA CMO Council. The economic impact of marketing is displacing diversity as CMO’s #1 priority. The marketing profession is finally lifting its head and rising to the unmet but doable challenge of demonstrating its economic impact.
The solutions are there. Or at least the materials for them.
It’s not just about “performance marketing” and short-term tactics measured in clicks and leads. What is “performance marketing” anyway? We believe all marketing should perform.
It’s not just about marketing mix modeling which is seeing a resurgence. It tracks only short-term, whatever it claims. It looks backwards. Its predictions assume the environment will not change. These measures have their place.
But there are others which are more important. Two are critical.
- Measuring total brand value, which is much larger than the value generated by short-term actions.
- Big data which can be enormously useful if marketers can pluck out and apply the right metrics from the deluge and ensure their quality. A great deal of work on big data and AI is underway.
The pieces exist. They need pulling together into usable tools. We urge marketers to collaborate to demonstrate the economic impact and incredible importance of what we do.
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education