Despite much talk over the last decade about measuring return on marketing investment there are still many companies missing out.
They have not embarked on recording the data inputs for a return on marketing investment measurement. It’s never too late and below is three good reasons to start.
1. Marketers must link spend to business outcomes
Marketers like all business functions are under increasing pressure to justify every cent of their budget. This is especially so for the marketing function – particularly if you want it to remain a strategic function of the business and not a ‘stickers and badges’ service provider. Without a thorough understanding of how much revenue a marketing initiative generates, knowing where and how to invest becomes a guessing game. Tracking the Return on Marketing Investment will determine the efficacy of the department's activities by producing reliable figures, preventing the waste of valuable resources and validating expenditure. So measuring return on marketing investment is an essential requirement to remain a strategic business function and will support your growth funding requests from your leadership colleagues in other business functions.
2. Accountability and transparency apply to marketing as well
Marketing is not immune from the accountability and transparency trend. By promoting, and reinforcing accountability for each allocated resource, along with keeping track of the progress of the return on marketing investment evaluation, you and your team will be able to identify which areas need additional investment, which require further analysis and where financial retraction may be the best move. This newly achieved transparency will improve your chances when requesting a budget increase. At this stage, the value of investing in effective marketing strategies will no longer be perceived as an expense, and it will instead be recognised as a platform to transform the business towards where it aims to be.
3. Ready, fire, aim. The emergence of Agile Marketing
Marketing like most business functions is now being organised and run across integrated teams using elements from the agile methodology. This is a quick fire process aimed at eliminating waste and enhancing productivity. At its essence, is data driven decision making. If your marketers are embedded in an integrated team, how are they going to feel if they have no return on marketing investment data to feedback to the team? They will be marginalised.
Your team needs real time return on marketing investment data to ensure marketing remains a true strategic function of your business.