State of Marketing Measurement Survey Report

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1 2014 State of Marketing Measurement Survey Report

2 1 Foreword Welcome to the Ifbyphone 2014 State of Marketing Measurement Survey report. Since we last published our trends on the fast-evolving marketing measurement sector, CEOs are reportedly turning to marketing more as the revenue engine of their organizations, guiding them toward the most effective channels to drive sales growth. One challenge that presents as a result of a more hands-on C-suite is increased demand for metrics on every aspect of marketing campaigns. These marketing measurements must extend beyond the traditional, easily quantifiable web-based metrics and include data from all channels. Furthermore, the rise of mobile technology in 2014 has blurred the line between online and offline marketing to create a much more complicated and diverse customer journey from engagement to purchase. Therefore, effective marketers must implement metrics typically applied on the web for other channels throughout the sales cycle. We have entered a multichannel environment where what you measure is even more important than how much you measure. These measurements focus on conversions, as marketing teams seek to identify their spend ROI and optimize multichannel opportunities. What we have learned from the evolution of marketing measurements thus far is that channels do not get replaced when new platforms arise. Rather, the marketing environment diversifies and channels intermix. The explosion of these permutations is increasing the number of marketing and purchasing paths, while changing the definitions of campaign tactics and best practices. The result is an opportunity for marketers to match calls to action, content, and paths to purchase with the most appropriate marketing channel and measure each step. Marketers who fail to embrace these changes will struggle to keep pace with CEO measurement demands. Irv Shapiro CEO Ifbyphone, Inc.

3 2 EXECUTIVE SUMMARY CEOs want data-driven answers and a pragmatic approach to measurement The 2014 State of Marketing Measurement Survey revealed CEOs desire all marketing activities to be continuously measured and decision making to be founded on strong statistical evidence. Through consistent reporting and analysis of marketing metrics, CEOs expect to identify which marketing channels are converting the most sales so as to implement data-driven solutions moving forward. Three quarters (75 percent) of respondents describe their CEO as totally committed or significantly committed to supporting their marketing teams, up eight percent from 2013 (67 percent). The number of respondents tracking weekly or monthly marketing metrics jumped six percent in With this involvement comes increased demand for a more pragmatic approach to marketing campaigns, focusing on conversion and return on investment (ROI). The most measured attributes include growth in sales revenue (69 percent), number of new customers (63 percent), and number of new leads (58 percent). The least measured metrics include increase in awareness (22 percent), brand perception (21 percent), and purchase intent (11 percent). To stay on pace with the industry, marketers are adjusting their practices to deliver the right metrics to data-hungry CEOs. The line between online and offline is blurring Increased marketing budgets are fueling CEO expectations for more frequent and accurate reporting on marketing data. But marketing activities, and the way the resulting leads convert, are no longer confined to either online or offline channels. Marketers rank (57 percent), Search Engine Optimization (SEO) and Pay-Per-Click (PPC) (55 percent), and social media (44 percent) as the top sources of high-value leads all digital media. This is not surprising given the ongoing secular shift from offline to online advertising. One might expect this to translate into an increased desire for clicks and website visits. However, the survey also revealed in-person visits (35 percent) and phone calls (20 percent) were rated with the highest potential for sales revenue conversion. While investment in online channels is anticipated to continue, marketers are expected in many instances to seek an analog conversion path for their digital strategies. To effectively track and analyze their programs, marketers must determine the right mix of online and offline programs and measurement tools. We try to focus on engaging prospects through our online properties, even when the relationship starts offline. We are moving toward adding phone calls to the attribution modeling mix to associate call data with a visitor s online session data. - John Babb CEO/President, idimension

4 3 Mobile marketers demonstrate high marketing IQ Marketers with mobile-focused strategies are leading the industry in integrating measurement solutions. Mobile marketers track more measurements than the general respondent population in almost every metric. For example, while 44 percent of respondents track the results of social media marketing, more than twothirds (69 percent) of mobile marketers measure social media. Marketers measuring mobile channel activity and performance demonstrate a high marketing IQ across both online and offline channels. These marketers understand what metric tools work, how they integrate, and how to translate the measurements into actionable insights to support CEO growth strategies. As such, these marketers will make themselves increasingly valuable to CEOs in the year ahead. Investing in the future: the modern marketer s technology stack Mobile plays a big role in our marketing mix today and will play an even bigger role in the future. Currently mobile makes up one-third of our marketing, and we expect to see that share grow to greater than 50% by end of year, and then to as much as 75% by the end of Neil Hiltz, Co-Founder Farm Girl Flowers To satisfy increasingly involved leadership, marketers must align their priorities with those of the CEO to effectively generate the desired marketing measurement results. In the past year, the proportion of marketers measuring their marketing activities has increased across all channels. Between 2013 and 2014, focus and measurement of sales revenue growth jumped the most with a 20 percent boost. Today, the primary tools in the modern marketer s toolkit are the following: web analytics (73 percent), SEO and PPC tools (63 percent), customer relationship management (CRM) (52 percent), a mobile or responsive website (46 percent), call tracking solutions (38 percent), and marketing automation (34 percent). Looking ahead, most marketers expect to invest in many of the same technologies. This set of tools is emerging as the marketing technology stack for high marketing IQ companies. Marketers who integrate offline and online measurement tools will gain a complete picture of where a lead is sourced, nurtured, and eventually converted into a sale across multiple channels.

5 4 SURVEY RESULTS CEO buy-in of marketing increases In 2013 we identified strong levels of CEO support for marketing programs. In 2014 respondents confirm that CEOs are more committed than ever to marketing. Three quarters of respondents (75 percent) say their CEO is totally committed or significantly committed to marketing, up eight percent from 2013 (67 percent). Chart 1 CEO support for marketing 2014 vs % 34% 37% 33% % % 7% 9% 5% 5% 0 Totally Committed Significantly Committed Somewhat Committed Little to No Commitment Don t Know Growth is seen in both the totally committed and significantly committed categories, whilst the percentage of respondents who believe their CEO has little to no commitment to marketing has dropped from almost one in ten (nine percent) in 2013 to seven percent this year. A decline is also recorded in the proportion of respondents who see their CEO as only somewhat committed to marketing objectives. As a result of their interest and investment in marketing outcomes, CEOs have a significant influence in marketing decisions. This reflects an ongoing trend from the 2013 State of Marketing Measurement Survey that recorded CEOs taking a close interest in receiving frequent marketing measurements. In fact, as CEOs become more ingrained in marketing processes, and more committed to the role marketing data can play in organizational decision making, they have become rapidly aware of technology advancements in marketing automation that enhance the ability to report more marketing information more frequently.

6 5 CEOs demand more frequent marketing reporting The frequency with which CEOs and leadership teams demand reporting on marketing metrics is increasing. More respondents are reporting marketing metrics weekly or monthly compared to last year. In 2013, one in five respondents (20 percent) said their leadership team required marketing metrics to be updated on a weekly basis; in 2014 this has grown by five percent (25 percent). Chart 2 Frequency of marketing metric reporting 2014 vs % 26% 25% % 18% 20% 15% 13% % 6% 8% 9% 7% 7% 0 Annually Quarterly Monthly Weekly Daily Don t Know Other Over a quarter of respondents (27 percent) are required to provide monthly marketing measurement reports to their CEOs and leadership teams, marginally higher than last year (26 percent). The increase in weekly metrics comes as a result of fewer respondents whose CEO and leadership team request longer-term marketing measurement updates. The percentage of respondents providing annual reports has dropped one percent (from six percent in 2013 to five percent today), while 15 percent are asked to report quarterly metrics, down three percent from 18 percent in The percentage of respondents reporting metrics daily and monthly is essentially unchanged with a one percent variance between 2013 and 2014.

7 6 Sales revenue metrics are top priority The most popular marketing measurements in 2014 are focused on tracking marketing s contribution to increases in sales. Over two-thirds of respondents (69 percent) are measuring marketing programs that most contribute to the growth in revenues. A significant proportion of respondents (63 percent) are also reporting the number of new customers generated by marketing activity. Almost six in ten marketers (58 percent) are measuring new sales leads, and more than half (53 percent) are tracking increases in web traffic that result from marketing campaigns. It should be noted that there has been a significant increase in the measurement of almost ALL marketing metrics by respondents to the 2014 State of Marketing Measurement Survey compared to last year. Table 1 Range of marketing metrics measured by respondents, 2014 vs Increase in sales/revenue 69% 49% Number of new customers 63% 49% Number of new leads 58% 43% Increase in website traffic 53% 35% Conversion rate (conversion funnel) 46% 41% Marketing ROI 45% 40% Cost per lead 36% 38% Increase in customer retention 31% 22% Customer acquisition cost 29% 34% Quantified increase in awareness 21% 12% Quantified increase in brand perception 21% 10% Quantified increase in purchase intent 11% 5%

8 7 Increased demand for measurements across offline and online channels 2014 sees more marketers measuring more of their marketing activity than ever before. There has been an almost universal increase in the proportion of marketers who are measuring marketing metrics, with the focus on sales revenue growing fastest, at 20 percent intensification year-on-year. Chart 3 Percentage growth in respondents measuring marketing channels in past 12 months 20 20% 18% 15 15% 14% 11% 10% 9% % 5% 5% 0-2% -5% Number of new leads Quantified increase in purchase intent Quantified increase in brand perception Conversion rate (conversion funnel) Number of new customers Increase in website traffic Increase in sales/revenue Quantified increase in awareness Increase in customer retention Marketing ROI Cost per lead -5 Customer acquisition cost There has also been double-digit growth in the percentage of marketers measuring the increase in awareness (10 percent), increase in brand perception (11 percent), number of new customers (14 percent), number of new leads (15 percent), and increase in website traffic (18 percent). In fact, only two metrics are experiencing less demand in 2014 compared to 2013: cost per lead (two percent down) and customer acquisition costs (five percent down). The ability of marketers to track their ROI for high-value sales channels is likely to become increasingly important as CEOs push for sales growth and market expansion in This environment will place a greater emphasis on the integration of marketing measurements of offline and online channels to best track high-value sales opportunities.

9 8 High-value marketing channels Respondents to the 2014 State of Marketing Measurement Survey believe high-value leads are most effectively generated via (57 percent), online optimization and advertising (55 percent), and social media (44 percent). Table 2 Marketing channels preferred for sourcing high-value leads, 2014 vs Variation marketing 57% 54% 4% Search Engine Optimization (SEO)/Pay Per Click (PPC) 55% 46% 9% Social media 44% 37% 7% Conferences, tradeshows and events 39% 39% 0% Direct mail 26% 28% -1% Online display/banner ads 25% 20% 5% Public relations 23% 28% -5% Webinars 22% 20% 2% Offline media: Print ads 16% 14% 2% Mobile ads 11% Offline media: TV 9% 5% 4% Content syndication 8% 9% -1% Offline media: Radio 6% 6% 0% App stores 3% 3% -1% Real world marketing interactions at conferences and tradeshows remain important to four in ten marketers (39 percent), a proportion that is unchanged from Direct mail marketing campaigns are rated highly by only 26 percent of respondents, down two percent (from 28 percent) since Public relations sees a five percent drop in perceived value for generating high-value leads, down from 28 percent in 2013 to 23 percent today. Marketers value online channels to generate high quality leads. SEO and PPC sees a nine percent increase in popularity, from 46 percent in 2013 to 55 percent today. Social media receives a seven percent improvement year-on-year, while online display/banner ads increase five percent. There is a growing interest in mobile platforms for the purpose of generating high-value sales leads. Mobile advertising (not tracked in 2013) is identified as a source of high-quality sales leads by more than one in ten marketing decision makers today.

10 9 Mobile: leading the industry in marketing measurement adoption The growth in mobile marketing is widely reported in the media. However, the previous section of this report noted that only one in ten marketers are currently measuring the value of mobile ads. The future potential for marketers to track increasing amounts of marketing data via mobile device usage is clear. Rapidly increasing use of phones and tablet devices to send and receive s, update social media profiles, and browse content online reflects the many important interactions consumers have with these high-value marketing channels while going about their busy daily lives. Marketers who have already embraced the measurement of their mobile channel show themselves to be exceptional practitioners of tracking metrics across a wide range of high-value channels. While 44 percent of respondents track the results of social media marketing, more than two-thirds (69 percent) of mobile marketers measure social media. A similar proportion of mobile marketers measure SEO and PPC marketing, compared to 55 percent of general respondents. Chart 4 Percentage of mobile marketers measuring other marketing channels % 69% 64% General Respondents Mobile Marketers % 44% 57% 25% 51% 39% 40% 9% 31% 23% 29% 27% 22% 16% 27% 8% 24% 24% 6% 26% 20% 11% 3% 0 SEO/PPC Social media marketing Online display/banner ads Conferences/events Offline media: TV Public relations Webinars Offline media: Print ads Content syndication Offline media: Radio Direct mail App stores In almost every marketing measurement category, with the exception of direct mail, mobile marketers report more measurements than the general respondent population. Due to the way data-rich mobile devices are increasingly used for digital content, some of the biggest increases in measurement by mobile marketers are in online channels such as , social media and SEO/PPC. Interestingly, mobile marketers are also significantly more likely to measure the results of offline TV advertising, suggesting a strong correlation between these two marketing channels as consumers watch TV while interacting with brands, ads, and other consumers via their mobile devices.

11 10 Online and offline marketing convergence To effectively track and analyze their programs, marketers must determine the right mix of online and offline programs and measurement tools. While investment in online channels is expected to continue, marketers are often seeking an analog conversion path for their digital strategies. In-person visits are rated the most valuable channel for converting leads into sales revenue by more than a third of marketers (35 percent), while inbound phone calls are favored by one in five (20 percent). Chart 5 Most valuable marketing channels with highest potential for sales revenue conversion % 41% % 21% % 11% 7% 8% 9% 6% 6% 7% 5% 9% 3% 4% 3% 4% In-person visits inquiries Inbound phone calls PPC clicks/website visits Visits to mobile website Social media engagement Webinar attendance Web forms/ report downloads Instant messaging requests In the table below, in-person visits received an average score of 7 out of 9, and inbound phone calls were rated 6.7 out of 9, for their propensity to generate high-value revenue. Both channels have grown in importance during the past year. The value of inquiries as a channel for high-value sales revenue is also growing, while webinars and instant messaging are less valuable in 2014 compared to Table 3 Average rating (out of 9): marketing channel ability to generate high-value revenue 2014 vs Variation In-person visits Inbound phone calls inquiries PPC clicks/website visits Web forms/report downloads Visits to mobile website 4.8 Social media engagement Webinar attendance Instant messaging

12 11 The technology factor The use of innovative marketing measurement technologies represents an opportunity for marketers to satisfy CEO demands for more frequent measurement and reporting of integrated offline sales revenue conversion channels. Web analytic technologies are currently in use by almost three quarters (73 percent) of marketers while almost two-thirds (63 percent) use SEO and PPC measurement tools. Chart top five marketing measurement technologies currently in use 80 73% 73% % 60 52% 51% 46% % 38% 33% 30 26% 27% 27% 22% 20 17% 16% 16% 16% 15% 14%11% 11% 10 0 CRM Web analytics SEO and PPC tools Web mobile 4% Call tracking Personalization/ dynamic content Marketing automation Business intelligence Bid management Mobile ad networks Workflow automation Behavioral metric tools Voice-based marketing automation Just under half of marketers (46 percent) are currently using mobile web measurement tools to report on marketing channels accessed via a mobile device. CRM solutions that can track and provide CEOs with frequent reporting on in-person sales conversions are currently used by just over half (52 percent) of marketers, while call tracking technologies that can measure the value of inbound phone call inquiries are deployed by 38 percent of respondents. (855) (855) twitter.com/ifbyphone twitter.com/ifbyphone Ifbyphone.com/blog Ifbyphone.com/blog

13 12 Future marketing measurement investment Forty-five percent of marketers saw a budget increase last year and invested heavily in web marketing measurement technology to generate (and track) sales leads. In the year ahead a more balanced investment approach is expected, combining the adoption of offline, human interaction, measurement technology for sales conversion alongside further investment in online lead generation tracking tools. A third of marketers (33 percent) plan to invest in SEO and PPC measurement technologies in 2014; 30 percent will increase their commitment to web analytics and mobile website measurement. Chart 7 Planned investment in marketing measurement technologies % 30% 30% 29% % 14% 22% 20% 21% 19% 19% 16% 16% 14% 11% 10% 10% 9% 9% 9% 6% 6% 0 CRM Call tracking SEO and PPC tools Web analytics Mobile website Personalization/ dynamic content Marketing automation Mobile ad networks Workflow automation Business intelligence Voice-based marketing automation Behavioral metric tools Bid management Marketing measurement technologies that track and report the value of human interactions, and offline channels that drive sales revenue, will receive additional investment in Almost one-third of marketers (30 percent) will invest in CRM solutions that can track in-person interactions. More than one in six marketers (16 percent) will invest in call tracking; 14 percent plan to be using behavioral metric tools by the end of the year, 10 percent will invest in bid management, and six percent in voice-based marketing automation. Across a range of marketing measurement tools investment is planned to enable marketers to deliver integrated marketing measurement solutions that can report BOTH online lead generation and offline sales revenue in a timely fashion.

14 13 Lack of skilled people, not technology, dominate marketers concerns In 2013 our research evidenced the importance of growth hackers, marketers who are integral in driving the adoption and deployment of measurement technologies. Despite the increasing role that growth hackers now have, 42 percent of respondents still lack marketing personnel who can deliver the measurement objectives of the CEO. Table 4 Challenges that impacted respondents ability to effectively measure marketing Variation Lack of marketing personnel resources 42% 35% 7% Lack of measurement prioritization 42% 40% 2% Lack of data collected due to manual systems 37% 38% -1% Lack of automated marketing measurement tools 33% 33% 0% Lack of integration with sales 33% 32% 1% Lacking viable process for measuring and reporting 31% 33% -2% Lack of call tracking data 24% 26% -2% Advancements in marketing measurement technology in recent years have resulted in fewer respondents identifying the lack of automated marketing measurement tools as a challenge in meeting their measurement objectives. Of greater concern to marketers is a lack of prioritization given to the measurement process amongst all the other critical tasks that a busy marketing team faces each day. When asked what they would need to be more successful in measuring marketing ROI during the year ahead, more marketing automation tools is one of the least pressing (34 percent), and has fallen six percent from Of a higher priority is the need for more budget (39 percent) and better alignment of marketing with sales (37 percent). Table 5 What respondents need in order to be more successful in measuring marketing ROI in Variation More attention to the measurement process 42% 48% -6% More budget 39% 32% 7% Better alignment with sales 37% 33% 4% More measurement data 37% 34% 3% More trained marketing personnel 36% 38% -2% More marketing automation tools 34% 40% -6% More executive-level involvement 17% 16% 2% It is clear that marketing professionals are being driven harder to measure, analyze, and report on marketing data. With marketing budgets increasing, CEOs feel justified in seeking more effective reporting on a more frequent basis. (855) (855) twitter.com/ifbyphone twitter.com/ifbyphone Ifbyphone.com/blog Ifbyphone.com/blog

15 14 ABOUT THE RESPONDENTS The response rate to the 2014 State of Marketing Measurement Survey saw a significant 24 percent increase this year. Total responses were 551, compared to 418 in The seniority of the respondent community remains high in More than one in five respondents are president/ owner of their organization, and another 35 percent hold a marketing management position. The respondents hold positions of responsibility in organizations that range from less than $1M to over $1B in revenue. Chart 8 Senior marketing respondents Chart 9 Size of organization: $ revenue 30% 21% President/Owner Marketing Manager Marketing Director 4% 7% 11% 32% < $1M $1M-$5M $5M-$20M 4% 4% 6% 17% 18% CEO 4% Marketing Vice President 7% Chief Marketing 8% Officer Other 8% 13% 32% 25% $20M-$50M $50M-$1B $1B < No response 13% Agencies, technology firms and consulting organizations represent just over half the respondent community, with healthcare and financial groups making the top five sectors. 25% Chart 10 Top industry sector of respondents Agency 38% 5% 6% 11% 29% 11% Software & Technology Consulting Services Health Care Financial/Insurance Services Other

16 About Ifbyphone Ifbyphone provides the leading voice-based marketing automation (VBMA) platform that businesses and marketing agencies rely on to connect, measure, and optimize sales calls. Built specifically for marketing and sales, Ifbyphone s cloud-based solution helps companies of all sizes optimize marketing spend across all channels, generate and convert more high-quality leads, and acquire more business over the phone. Known for its unmatched ease-of-use and reliability, Ifbyphone s VBMA platform has successfully processed over 250 million calls for over 600 million minutes. Organizations in all industries use Ifbyphone, including marketing agencies, lead generation, e-commerce, direct response, financial services and insurance, health care, retail and logistics and SaaS and technology. For more information, visit Ifbyphone 2014 Ifbyphone and the Ifbyphone logo are trademarks of Ifbyphone, Inc. All other trademarks are the property of their respective owners. Ifbyphone, Inc. 300 W Adams St. Chicago, IL Phone: (855)

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