"Big Ideas" still Trump ROI in driving Marketing Strategy

A recent Forbes Insight research survey indicates that despite the impact of two economic downturns in the past decade and current economic pressure to deliver bottom-line results, Marketing Executives are still more focused on the "big idea" , left brain creative to drive marketing strategy, vs. the quantified ROI, right brain impacts.

When marketing executives at larger firms were asked, what attribute is most important to marketing strategy,
  • 58% indicated that it is a core "big idea" that guides all of our marketing initiatives,
  • while only 40% indicated that it was "tools and metrics that measure ROI and ensure accountability for outcomes" that drives marketing strategy.
Interestingly, perhaps because of closer accountability to bottom-line results, small / medium business marketers(those with budgets of less than $1 million) favored metrics to drive strategy, at 58% compared to the "big idea".

Measurement is Driven by Frugalnomics
Measurement is definitely more important than in the past, and is being driven because marketing executives understand that the buyer landscape has fundamentally changed. Driven by Frugalnomics, a new age of austerity which demands proof of bottom-line impact from all significant investments, marketers are implementing marketing performance measurement to prove strategic impact and justify to senior executives that marketing monies have been well spent.

According to the survey results, for those larger firms who are measuring marketing performance, the motivation for implementing a measurement program:
  • 71% - make marketing more strategic and impactful within the organization
  • 56% - senior executives demand some justification for the money we're spending
  • 35% - improve marketing team accountability
  • 27%  - increased competitive pressures
  • 25% - financial pressures
  • 17% - changes in consumer behavior
  • 15% - need to improve business planning
  • 8%  - need to guide product development
  • 6% - need to improve advertising agency relationship and effectiveness
Overall, 68% of respondents have implemented a measurement program, although only about half indicated that the measurement program was formal. The good news for the "quants" is that interest in measurement programs is clearly growing, with almost all organizations indicating that they will be implementing formalized measurement programs in the near future.

The macro-economic conditions are clearly driving more measurement, and in particular, respondents indicated that sentiment was driven by a more competitive landscape with more companies competing for less market opportunities, overall economic pressures, and more scrutiny from internal stakeholders. When asked what market changes were driving measurement changes to a large extent, respondents indicated:
  • 65% - to remain more competitive
  • 55% - because of current economic conditions
  • 52% - because of internal financial pressures
  • 52% - because of changing client / consumer behavior
  • 49% - because of new tactics to our marketing program
  • 43% - shift in marketing strategy to new media
The Bottom-Line
Marketing is under pressure to shift from creativity to accountability, and clearly that shift is taking place. Although for some chief executives and financial officers, some marketing executives are still not getting the accountability message, and the balance is still not meeting the needs of a frugal environment.

After the technology bubble-burst in 2001, CIOs were held more accountable to bottom-line results. 
Many CIOs did not shift from creative to accountable and as a result, IT budgets as a percentage of revenue has declined substantially over the past decade, even though the importance of technology has substantially increased. CIOs who did not shift to address Frugalnomics saw tenures shorten, and reorganizations that moved their leadership lower in the corporate chain of command.
Do CMOs face a similar fate? Faced with Frugalnomics, marketing executives clearly should be putting accountability ahead of creativity, but the survey results still show this to not be the case. To be successful, the marketing executive of the near future needs to better balance the "big ideas" with the ROI, and provide bottom-line impact proof in order to get their fair share of budgets and remain strategic.

Source: The Accountability Evolution, Marketers Turn to Metrics to Boost Their Strategic Value, Forbes Insights and MarketShare Partners. The survey was fielded online between February 9, 2010 and April 1, 2010 among 103 senior marketing executives. Half of respondents (50%) had marketing budgets of greater than $1 million, 39% had marketing budgets of less than $1 million, and the remaining declined to specify their marketing budgets.


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