Increasing Marketing s Relevance to the Business
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1 2013 ITSMA/VEM/Forrester Marketing Performance Management Survey Increasing Marketing s Relevance to the Business Matt Kerwick, PhD, Senior Analyst, VisionEdge Marketing Dianne Kim, Research Associate, ITSMA Laura Patterson, President, VisionEdge Marketing Laura Ramos, Vice President, Principal Analyst Serving CMOs, Forrester Julie Schwartz, Senior Vice President, Research and Thought Leadership, ITSMA Abbreviated Summary June 2013 Note: This Abbreviated Summary highlights some of the significant findings from 2013 ITSMA/VEM/Forrester Marketing Performance Management Survey: Increasing Marketing s Relevance to the Business A more in-depth analysis can be found in the full report available for purchase at:
2 Key Takeaways The Situation Only a handful of senior executives are relying on marketing data to make decisions. Furthermore, more than half of marketers are not confident that they know which metrics and outcomes its key stakeholders care about. What s going on? Marketers are reporting: 1. Marketing activity, not business outcomes 2. Operational efficiency, not effectiveness 3. Past performance, not predictive insight The Solution To capture the C-suite s attention, marketers need to create a clear line of sight between marketing activities with business outcomes. The best-in-class marketers: Speak the language of the business Understand how the business leaders evaluate marketing effectiveness Connect marketing activities to business results Produce actionable marketing dashboards Present marketing s dashboard to the executive team Use data and analytics to report past history and as a predictive tool Employ analytics talent Invest in analytical tools Build analytical models
3 Remarkably, just 40% of marketers today believe that measuring marketing s value and contribution to the business is very important or critical In your organization or company, how important is it that marketing is able to measure its value and contribution to the business? Mean Rating (N~396) 40% Very Important or Critical.
4 And only a handful of senior executives are relying on marketing data to make decisions To what extent are your key stakeholders using the data, metrics, and/or analyses developed by marketing? % of Respondents (N~383) BU or Division Leaders CEO CFO/Finance 6 Sales Relies on marketing data to make decisions
5 Most marketers don t know which metrics and outcomes its key stakeholders care about How confident are you that you know which metrics/business outcomes your key stakeholders (e.g., CEO/CFO/BU leaders) care about? Mean Rating (N=394) Extremely Confident = % 2 2 Not at all Confident = Mean Rating= Note: Mean Rating based on a 10-point scale where 1=Not at all confident and 10=Extremely confident.
6 Marketers are reporting on marketing activity and associated costs, rather than reporting on metrics executives use to set direction Which performance metric categories are included on marketing s dashboard? % of Respondents (N=163) Sales pipeline (leads, conversion rates, win rates) Marketing spend ROI (e.g., campaign ROI, event ROI, lead ROI) Marketing Activity and Efficiency Brand awareness/equity 44 Customer satisfaction/loyalty On-time delivery of marketing programs Marketing contribution to customer penetration/expansion/share of wallet Marketing contribution to customer retention/loyalty Marketing contribution to market share Marketing contribution to category ownership Business Outcomes Other 6 Note: Multiple responses allowed.
7 Most marketers use data and analytics to report on past performance rather than provide predictive insight Are data and analytics being used as a predictive tool or to report past performance? % of Respondents (N=342) Not applicable, we don t use analytics 11% As a predictive tool 25% 64% To report past performance
8 A few exceptional marketers are able to demonstrate value and contribution to the business For 2012, using a 100 point scale, please select what grade the CEO (or you, if you are the CEO) would give your marketing organization for its ability to demonstrate its value and contribution to the business. % of Respondents (N=424) : 80 89: 70 79: 69 or lower: Marketing was able to measure and report the contribution of its programs to the business Marketing programs made a difference but the contribution to the business goals were not measured and reported Marketing appears to have made some impact on the business, but it is not clear if the impact was material, nor is it measured Marketing programs didn t make a difference there is no clarity as to how marketing is contributing to the business 6% 27% 29% 38%
9 The A marketers align their marketing activities to business metrics that executives care about Speak the language of the business Understand how the business leaders evaluate marketing effectiveness Connect marketing activities to business results Predictive Leading Indicators Outcome- Based Operational Output- Based Campaign Lift Modeling Predisposition to Purchase Likelihood to Defect Share of Wallet Rate of Growth: Market Share of Preference Market Share Category Ownership Lifetime Value Lead/Rep Lead Aging Campaign ROI Media Mentions Trade Show Leads Click Through Rates
10 A marketers establish clear data chains between marketing activities, objectives, and business outcomes to produce actionable dashboards Business Outcomes Produce actionable marketing dashboards Present marketing s dashboard to the executive team Marketing Programs Marketing Objectives Marketing Tactics
11 A marketers use analytics to inform future decisions Use data and analytics to report past history and as a predictive tool Employ analytics talent Invest in analytical tools Build analytical models How well does your marketing organization use data and analytics to enable the following? Mean Rating Make tactical marketing recommendations Make strategic business recommendations Predict customer/ market behavior 4.7 a 7.5 ab 6.3 a 5.7 b 5.7 a 5.0 b 4.2 b 7.0 ab 6.0 ab The A s (N=76) Middle of the Pack (N=105) Laggards (N=101) Note: Mean Rating based on a 10-point scale where 1=Poorly and 10=Extremely well. ab indicate a statistically significant difference.
12 Study Methodology Web-based Survey 424 Survey invitations were ed during March and April 2013 to the ITSMA, VEM, and Forrester communities. In addition, survey invitations were extended via social media outlets such as Twitter and LinkedIn. people completed the survey Marketing Performance Grade The Data Was Analyzed by: A s: Marketing demonstrates contribution to the business (Grade: A) Middle of the Pack: Marketing makes a difference, but contribution not measured (Grade: B) Laggards: Marketing may have an impact, but not known if impact is material (Grade: C/D)
13 Type of Company % of Respondents (N=424) Primarily sell products 21% Primarily sell services 36% Industry Subsector % of Respondents (N=424) 43% Software solutions IT professional services/consulting Telecommunications and network systems and solutions Computer systems and solutions Marketing services/ advertising agency Management consulting Sell both products and services Study Methodology Respondent Titles % of Respondents (N=294) Member of the functional or LOB leadership team Size of Company % of Respondents (N=424) 34 Individual contributor 28% 9% 29% Director 34% Manager Other services 5 25 Other product manufacturing Other technology hardware systems and solutions Outsourcing Architecture/engineering/ construction Other Less than $50M 6 7 $50M up to $99M $100M up to $499M 4 $500M up to $999M 16 $1B up to $4.9B 8 $5B up to $9.9B $10B or more
14 Table of Contents for 2013 MPM Survey Increasing Marketing s Relevance to the Business For More Information Julie Schwartz Senior Vice President Research and Thought Leadership ITSMA jschwartz@itsma.com Laura Patterson President VisionEdge Marketing laurap@visionedgemarketing.com , Ext. 12 Laura Ramos Vice President Principal Analyst Serving CMOs Forrester lramos@forrester.com Slide Executive Summary 3 Methodology and Respondent Demographics 30 Detailed Findings 43 Marketing Performance Management 43 Data and Analytics 64 Dashboards and Models 90 Business Outcome and Sales Metrics Performance 110 Appendix: Study Definitions 117
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