Duke’s Fuqua School of Business recently released the results of their annual CMO survey. The survey, taken by 408 chief marketing officers, covered a wide variety of topics, including marketing spending, social media, marketing jobs and our favorite topic, marketing analytics. The results in marketing analytics seem to be a case of “good news, bad news.”
First, the good news. As the chart below shows, spending in marketing analytics is expected to increase 72% in the next three years.
Now, the bad news. The survey also concluded that most projects don’t use the marketing analytics available to them or requested by them, as the chart below shows. In addition, the contribution of marketing analytics to a company’s performance is considered low. When asked to what degree the use of marketing analytics contributes to a company’s performance, on a scale of 1 to 7, where 1 was “not at all” and 7 was “very highly,” the responses of the CMOs averaged 3.7.
So what accounts for the gap between companies’ willingness to invest more in marketing analytics and the fact that marketing analytics is not widely used? At Origami Logic, we feel there are a number of factors:
- Lack of Talent: Successful marketing analytics initiatives require people with the right talents. The CMO Survey asked CMOs if they feel their company has the right talent to fully leverage marketing analytics. On a scale of 1 to 7, where 1 was “does not have the right talent” and 7 was “has the right talent,” the mean response was 3.6 (i.e., more than 50% of the respondents answered 1, 2, or 3), which is not very good.
- Worthless Metrics: We believe that most marketing dashboards consist of “vanity metrics.” These are metrics that are not related to key business objectives. As a result, they don’t really help in making important decisions and aren’t viewed as being useful. A good example of a vanity metric is website visitors. This is a common metric found in marketing dashboards; yet it doesn’t really provide any insight by itself to determine what actions need to be taken to make improvements. If website visitors are down, more analysis has to be performed in order to come up with a plan to increase visitors.
- Difficult to Calculate “Metrics That Matter”: Rather than “vanity metrics” (as described above), we feel it is important for organizations to focus on “metrics that matter.” These are metrics that are tied to important business objectives and that will support important decision making. The problem with these type of metrics, however, is they are generally not easy to calculate. Metrics that are tied to business objectives typically require data from multiple sources. For example, in order to measure the effectiveness of a campaign, data – both results and spend – needs to be collected on the various activities executed.
Does your organization use the marketing analytics that is provided or requested? If not, why not? Please provide your perspectives in a comment below.
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