Digital ROMI

EIU: Manufacturing CMOs struggle with ROMI metrics

“Measuring the return on marketing investment ROMI seems a simple enough concept. Yet many chief marketing officers CMOs at manufacturing firms are still struggling to bridge the gap between what they measure and what P&L owners care about.
Business owners are rewarded based on revenue and profitability growth. The metrics that marketers track—leads generated, customer satisfaction, search engine referrals — are also related to revenue less often to profitability, but not always directly.

EIU 1

Perhaps this is one reason some CMOs have a higher opinion oftheir own performance than their C-suite counterparts.

EIU 2

44% of CMOs say their company can clearly demonstrate marketing’s contribution to the top line, but only 27% of other C-suite executives say the same.”

According to the “Marketing ROI in the Era of Big Data: The 2012 BRITE/NYAMA Marketing in Transition” Study:
“22% are using brand awareness as their sole measure to evaluate their marketing spend.

iab nyama

Recommendations: Above all, get started. Start with the basics of determining marketing ROI so you will  create the largest impact on your organization

  • Make sure you’re using some kind of metrics on most of your marketing.
  • Be ready to invest in getting some kind of data relevant to your measures.
  • Make coordinating your traditional and digital media campaigns a goal.
  • Set specific measurable objectives for all your campaigns.
  • Put ROI in stated objectives for all your vendors (so they know your expectations to retain them or to cut them loose).
  • Link marketing ROI to employee compensation, perhaps a bonus.
  • Start today… as the pay off and learning curve will likely take a few years.

Then, move on to ROI best practices:

  • Make sure your marketing metrics are accepted by finance.
  • Make sure your data is: timely, actionable, linked at the customer-level, used to personalize marketing and target customers.
  • Share your data across your organization.”

But watch out for under- or over-attribution of ROI to Digital, as this recent Nielsen study found out: “Google, Facebook Underestimated By Marketing-Mix Models in Survey Backed by Seven Top CPG Players.

Digital-media-tubemap-550x388

  • Marketing-mix models underestimate ROI from Facebook ads by as much as 48% and from Google search ads by as much as 39%
  • Credit for about 25% of sales attributed to paid search should be shared with TV, print or other digital media
  • A prior ComScore study [found out] that clicks have little to do with offline sales of packaged-goods brands. Using impressions rather than clicks to measure digital campaigns was far more predictive of real-world results and increased the estimated ROI of Facebook advertising by as much as 75%
  • The problem wasn’t so much the models as the type and quality of data fed into them
  • Impression data worked much better when it included more detail about publisher, geographic market, device and demographics.”
Advertisements
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: