Marketing ROI?….Picking Up The Gauntlet

Posted on April 22, 2008
Filed Under Gregg Gallagher, Leadership, Management, Marketing |

In his last post on The Challenge of Investing in People, Norm likened the current skepticism of many business leaders re “people investment” to that of the view of marketing 20+ years ago. He went on to state:

And still today no one has yet come up with a way of tying marketing dollars into actual growth in revenues. There are a lot of attempts at proxy metrics (number of placements times expected impressions per placement yields so many leads generated, etc). But I have not met a CEO of late that does not recognize the need to invest in marketing, even though they cannot determine the return on their investment in any other fashion that anecdotal (perhaps that will change with Web 2.0 but we will see).

While I agree that there are still remaining challenges in effectively tracking & tying specific revenue increases to specific marketing programs in many contexts (e.g., print advertising in a B-to-B environment with long sales cycles), I do believe that the marketing discipline is getting much more adept at tracking results, both within the context of the web (via enabling tracking technologies and the ability to complete the purchase within the e-commerce context) as well as via more traditional vehicles such as print and broadcast advertising.

All too often, in my experience, the lack of establishing even rudimentary measures of ROI on marketing expenditures stems not so much from structural limitations as it does from the inertia and sometimes outright resistance of the marketing professionals involved. Marketing programs that can track and report such metrics are often more complex, time-consuming and costly to design, implement and manage. Since very few marketing executives have the luxury of a surplus of resources (people and $s), the natural inclination is for them to squeeze one more ad placement or trade show event into the plan in lieu of implementing ROI tracking mechanisms.

Another dynamic is the resistance of many marketing professionals - particularly in small to medium-sized firms - to allow such transparency into their efforts. We (after all, I am a marketeer) have had a tendency to obfuscate and try to romanticize our profession, positioning it more as an art, than the science it actually can be. Measurement also means accountability, and although we might be loathe to admit it, there is a natural human reluctance to be held accountable (often exacerbated by the tactics of some managers to use “accountability” as a means of manipulation and punishment, rather than as the motivational and learning tool it should be.)

So, when an executive hears from her marketing lead that he can’t measure ROI on marketing dollars, she can and should push back. At the very least, proxy metrics and objectives should be defined, agreed upon and tracked.

Don’t take “We can’t know” for an answer…..

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