Why a “measurement crisis” helps performance marketers prove their effectiveness in the boardroom

Amidst decreasing marketing budgets, less consumer spending and antsy board members, CMOs need to prove their worth. Here’s how marketers can help leverage measurement to take their brand to the top.

Marketing effectiveness has fallen below pre-pandemic levels for the second consecutive year and with marketing budgets under increasing pressure due to stagflation, Chief Marketing Officers (CMOs) are facing more scrutiny than ever to prove the effectiveness of their practice in the boardroom.

This comes as the stagnant economic climate has executives demanding articulation of short-term business outcomes from their CMOs, often at the expense of what drives long-term sustainable business growth.

According to data from industry trade body, the Data & Marketing Association (DMA UK), short-term performance marketing effectiveness has declined by 62% over the past two years, while brand campaign effectiveness has almost doubled - prompting the DMA to assert that the industry is amidst a “measurement crisis”.

Measurement is a particularly significant challenge for performance marketers as the “pay for performance” aspect of their campaigns requires measurable results before receiving payment from the purchaser.

Ian Gibbs, Director of Insight at the DMA UK, said: “The pace of change in marketing is hard to keep up with. New channels, platforms, metrics, and pieces of adtech kit flood the market on a weekly basis, each proclaiming that their relevance has superseded everything that has come before.

“Proving marketing effectiveness has become a complex task, but it doesn’t need to be – our new toolkit will help marketers to identify effective measurement and communicate it with the boardroom to showcase the true value of marketing. Marketing effectiveness is below pre-pandemic levels for the second year running, so we must prioritise implementing effective measurement to combat the industry’s worsening measurement crisis.”

CMO Measurement Toolkit

In response to the crisis the DMA has released a ‘CMO Measurement Toolkit’ targeted at helping the industry communicate marketing effectiveness in the boardroom, while focusing on the measurement best practices that articulate its impact as robustly as possible.

The report shares five key takeaways:

- Measure what matters to your business: Just 8% of marketing measurement KPIs in 2022 linked marketing spend to business outcomes such as ROI, profit growth and long-term customer loyalty. As these factors will help sell the organisational value of marketing, measurement of them should be prioritised.

- Assess which metrics are linked to business outcomes: It’s crucial to understand which KPIs are most strongly linked to positive business outcomes, this facilitates the reporting of business effects that most appeal to the boardroom. Ad volume, efficiency and engagement, along with Net Promoter Score and Retention Rate growth were found to be strong business effectiveness drivers.

- Contextualise marketing performance against benchmarks: Marketing effectiveness is still below pre-pandemic levels, with sub-standard measurement undoubtedly playing its part. This is again an issue born from lacklustre KPIs. Like-for-like comparisons with relevant industry benchmarks need to be made when setting campaign KPIs.

- Stimulate future demand through brand building: With household budgets in the UK under severe pressure, generating customer response to marketing comms has become increasingly challenging. However, brand campaign effectiveness has doubled in the past two years indicating that brand activity itself can drive sales directly, and through a halo effect on performance/response marketing in the short term.

- Rediscover creativity: Creativity is being severely under-utilised in the performance marketing space and as such performance marketing effects have declined by 62% over the past two years in the face of muted consumer demand. This presents a big opportunity for savvy advertisers to arrest the decline in response effectiveness by prioritising creativity.

Azlan Raj, Chief Marketing Officer at Merkle, said of the toolkit: “There is so much data that’s now at our fingertips that it can prove paralysing. As marketers struggle to keep their heads above the data flood and become unsure of what to report upon, this innovative toolkit not only provides marketers with actionable insights, but it also offers a checklist of our key guidance to help them summarise their current maturity and rapidly identify opportunities for progression in the measurement space.”


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