Marketing teams remain under increased pressure to manage smarter, act more like a business, and improve and report Marketing performance. According to The Trade Desk, priorities keeping CMOs up at night are finding new sources of growth and managing and measuring marketing performance.  A Kantar study echoes our research, which we have conducted since 2001: “Fewer than one in five marketers are very confident in their ability to integrate data for insights, impacting the ability to measure and prove ROI.”

Marketers are going to continue to face pressure from the C-suite.  Sadly, according to Proof Analytics, ” 96% of CEOs See Their Marketing & PR Teams as ‘Unwilling or Unable’ to Prove ROI.” Everyone recognizes there is a problem. Until Marketing organizations commit to doing the hard work, they will face what Spenser Stuart calls the CMO Shuffle.

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A Matter of Marketing Performance Metrics

The starting point for CMOs wanting to do the hard work is to select the right performance metrics. The ANA’s  Marketing Accountability study revealed that despite enormous efforts, 42% of marketers remain dissatisfied with ROI measurements and metrics. Clearly, based on all of these studies, Marketing’s metrics are not on the same page with other members of the C-Suite. What’s the hold-up? It may have something to do with our creative roots and the types of metrics Marketing organizations tend to lean toward.

Even today, when marketers speak about metrics, many are really talking about measuring activities and efficiency rather than effectiveness and impact. For example, a common marketing metric, cost-per-lead, frames the results not in terms of revenue or growth, but as a cost. This approach to metrics and analytics is actually a recipe for a lower Marketing budget. It doesn’t tell management anything about the contribution Marketing is making to the business.

Michael Caccavale wrote in Sales & Marketing Management that, “In general, marketers are good at managing their marketing systems in-house on a day-to-day basis. However, the skill sets used to create these reports and analyses are different than those needed to assess the information in a database to make decisions about how to track customer behavior and attack the marketplace. While Marketing departments have plenty of talented ‘creative’ types, they may lack the ‘left-brain’ analytics.”

The drive for more Marketing Performance Measurement and Management (MPM) in Marketing is no surprise. Our cousins in Sales have always been performance-driven and held accountable to a revenue number. The Sales organization is seen as a revenue driver because it operates in terms of producing positive numbers. Yet, in order for Marketing to align with Sales and impact business as a revenue driver in its own right, Marketing also needs to measure itself based on ways that are meaningful to the business. The more we can tie Marketing to business value, the more we can demonstrate effectiveness and impact—and the more the budgeting discussion is about how much money we need to allocate in order for Marketing to achieve its numbers so that the Sales, product, and other teams can hit theirs.

Implementing the Right Tools and Culture to Measure Marketing Performance

To manage and measure Marketing performance, Marketing organizations and personnel need metrics, systems, tools, processes, new skills, and a culture of accountability. These are a completely different set of skills from what Marketing has relied on in years past, when our primary focus was to develop creative content to drive interest and awareness. But our budgets and future survival depend on our ability to add these metrics, data, analytics, processes, and systems capabilities to our skills mix. While many of us know this, the challenge is the implementation.