2012 is supposed to be the year that big data makes a big difference for marketers. But, for all the talk about gleaning data and applying it to measuring ROI, most enterprises don’t have the details worked out. Few can even agree on what constitutes marketing ROI.
A new study undertaken by faculty members at Columbia Business School shows just how dire this situation is. The study points to a mismatch between what marketers believe and what they do. For example, over 90% believe that they must use customer data to build successful marketing strategies but 51% have an organizational structure that makes it difficult to share data. And, 39% say their data is too old or collected too infrequently to be useful.
When developing their marketing budgets, the marketing ROI data does not play any role for 57% of these firms. Instead, 68% are looking at past spending levels to justify the current year’s budget. Another 28% are also relying on ‘gut instinct.’ And when considering how to proceed with marketing spending, many managers are turning to old standbys. “Recall, brand favorability, purchase intention and willingness to recommend” continue to be used. All of this is occurring as the marketing department’s activities come under increasing scrutiny from the C‑suite.
To improve this situation, Columbia researchers recommend that CMOs take more of a leadership role to improve the organization’s ability to measure marketing ROI. The logical steps in establishing this system are:
- Set objectives first
- Design metrics to ensure marketing is linked to the objectives
- Gather data
- Communicate goals to the organization along with explanation about how measurement is occurring
- Evaluate and reward employees who succeed in this system
The good news is that the data is out there and so is the ability to collect it. Organizations that put logical measurement systems in place, especially for emerging technologies like mobile, will be able to point to a solid ROI for their marketing efforts. This ROI data can provide the basis for building the financial support for the next promotional campaign.[Source: Rogers, David and Sexton, Don. Columbia Business School. Marketing ROI in the Era of Big Data. Columbia.edu. 2012. Web. 26 Mar. 2012]