Commentary
2014: The Year of Marketing Accountability
- by Anto Chittilappilly , Op-Ed Contributor, January 28, 2014
But despite the promise and the progress, many marketers still believe that measuring the value of their media spend across online, offline and mobile channels is complicated and challenging. Some marketers are so distrustful of their current measurement system that they fall back on price when making their media buying and optimization decisions. Others have bought into the myth that moving to more advanced measurement is too complex and disruptive to their organization’s workflow and structure, so have convinced themselves that their current methodologies are “good enough for now.”
In reality, the precision with which multichannel marketing performance can now be measured is unprecedented. As CEOs and CFOs continue to demand improved ROI accountability from marketers, adopting more advanced measurement techniques will become vital to optimize spending in 2014. Here are some compelling reasons why:
If you’re not measuring it, your competition is. Success is rapidly accelerating the adoption of advanced cross-channel measurement tools, driven in large part by the 15% to 35% average increases in media efficiency and ROI that brands are seeing as a result. In fact, the majority of Fortune 500 companies and many of the largest brands in insurance, financial services, banking and retail, among others, are taking advantage of the operational efficiencies and competitive advantages of advanced measurement. If you’re not quantifying the impact of every channel, campaign and tactic on your overall performance in order to improve planning and optimize spend, most likely your competition is.
The proliferation of social and mobile. Just like digital a decade or so ago, the proliferation of social media and mobile devices has forever changed the marketing landscape and how consumers find and connect with brands. For marketers, these marketing vehicles could appear to have solved the problem: huge reach and very precise targeting. But in practice, they raise a major conundrum. Even though these channels are highly measurable, marketers won’t be able to recognize their true value if they are using outdated measurement methodologies that prevent them from understanding the influence that social and mobile channels have on eventual conversions. Without a clear and accurate read on social and mobile's effectiveness, marketers will have an extremely hard time justifying the investment in these burgeoning channels.
Omni-channel is the new marketing mantra. Just as brands were getting accustomed to the concept of cross-channel marketing, along comes omni-channel, and a whole new set of challenges emerge. Omnichannel marketing isn’t about the number of channels on which you advertise, but instead how you can use each channel to create personalized, contextually relevant experiences for each individual who interacts with your brand. Advanced measurement tools play a foundational role in every omni-channel strategy, providing the ability not only to collect and manage massive amounts of marketing interaction data, but also to draw actionable insights from that data in order to deliver seamless, consistent experiences with your brand, at any time, and on whatever platform your customers and prospects use.
Competition for every single arbitrage dollar. Despite recognizing the inaccuracies, many marketers still feel comfortable justifying increases in spend based on rudimentary metrics like click-through rate, or on faulty measurement methodologies like last click. However, because these methods don’t account for the influence exerted between channels and tactics, marketers risk overspending in some areas, and/or under-spending in others. As Dan Ariely wrote in his book, “The Upside of Irrationality,” there are always arbitrage opportunities to benefit from the predictable irrationalities of average intelligence. Unless you measure before you cut, somebody may be eating your lunch -- without you knowing it.
2014 will bring more scrutiny of marketing budgets and more pressure for accountability than ever before. By adopting more advanced measurement tools, marketers can not only measure the impact of their marketing programs against the goals of their organization, but also justify their actions to their CEO and CFO.
Welcome to the party Anto. Hard to argue with the points being made. But the Year of Marketing Accountability has really been every year since about 2004. 10 years ago we turned the corner and started to get "accountability" and "roi" into the daily dialogue of marketers not on the heels of new technologies or simplifying software, but by working the people problems - aligning marketing and finance on common expectations and measurement constructs, and then methodically improving and extending the automation of the measurement functions. Too much of the dialogue on marketing ROI today is about just that portion of the iceberg floating about the waterline. The "critical mass" that keeps that iceberg upright has long been building thanks to the tireless work of hundreds of dedicated experts and a few highly committed organizations like ANA, ARF, MSI and others who collectively made great strides to change the hearts and minds of CMOs to embrace ROI as a crucial element of marketing success. The work is not nearly done. Victories are small, but increasingly frequent. This progress we've made is not permanent. It's always eroding and needs to be constantly re-built. So let's keep 2014 in context... another year of building on the progress made, and setting up bigger and better things in 2015 and beyond.
agreed w/the first 2 comments, and while we're at it here's hoping that someone can pick up the baton and set the world straight on "omnichannel", a term from E-COMMERCE that is now being blindly applied to the MEDIA world (as in Anto's incorrect definition in this article)....well, at least we can take solace that there is a new meme to replace "Big Data"....*sigh*
Pat, Gray and Kevin, Thanks for your comments.
@Pat: Even though marketing accountability has been talked about since before 2004, the unambiguous quantification of marketing ROI and marketing effectiveness remains a key challenge for most organizations today. 2014 will be the year that marketers are able to measure marketing results objectively and accurately, optimize their media based on such measurements, and then operationalize those results in real-time. It will be a party that you don’t want to miss.
@Gray: As you have pointed out, using short term, tactical, and top-of-the funnel metrics to measure strategic marketing value will ultimately do more harm than good.
@Kevin: Can you please point out which part of the Omni-Channel-Marketing definition you found incorrect?
You are almost there Anto…
Just last year, Accenture declared the mid-2010s to be the advent of a "Value Revolution". Here, they argue that ROI isn't just a calculation. It is part of the greater equation of assessing and demonstrating value.
Now, both buyers and sellers like to think of themselves as being logical and analytical. But ROI and value aren’t digested very well unless the impacts they highlight are just planted in-front of them. In-fact, for value to be “owned” by the buyer, they need to have participating voice in the variables and calculations. If you have ever bought a home vs built your own home where you had a part in the planning… You will know that even if they cost the same, one has much more value to you.
With this in mind, how do sellers collaborate and demonstrate value or ROI with their clients today? The former almost never happens while the latter is still being done in emails and powerpoints.
So while buyers are demanding ROI now more than ever, sellers need to do a better job of co-authoring that value statement with them.