Marketing Measurement and ROI Analysis – Connecting Aspirations with Realities

I’ve been pretty heads-down over the past few weeks, analyzing the data and results from my graduate research and also working on my upcoming book.  As I’ve dug into the data, there clearly are some self-evident themes emerging around marketers’ opportunities and challenges with adopting strategic marketing systems and technologies (which I will be covering on this blog in more depth over the coming weeks).  One of the clearest themes is the great chasm that exists between aspiration and reality for marketers when it comes to marketing measurement and the analysis of marketing return on investment (ROI).

My research found that these topics are top of mind for marketers, and many state their organizations are already beginning to engage with analytics software.  When asked about tactical/operational objectives for new technology deployments, measurement and ROI analysis are at the top.  This is consistent with a new Lenskold Group / MarketSphere report, released this week.  “Current economic conditions are putting pressures on marketers to better understand their marketing effectiveness as 8 in 10 marketers (79%) report that the need to measure, analyze and report marketing effectiveness is greater in 2009,” according to the press release for the report.

Yet my research found that the same marketers give their organizations low marks on analyzing performance and overwhelmingly comment that their organizations are ‘not aggressive’ when it comes to marketing technology investments.  Aspirations are high, but the reality of investment in systems and technologies to deliver on the aspiration is low.  This also was echoed by Lenskold/MarketSphere, which further commented in their release, “[B]udget pressures are evident with 6 out of 10 (59%) indicating that this higher demand for measuring marketing effectiveness is not budgeted for … .”

The reality is that marketers cannot get enough of systems and technology to tackle measurement and ROI analysis; they have barely scratched the surface.  Far from solved, this is an issue that has only become more important and yet more complicated over time.  Customer channels are exploding in number, and yet marketers are incapable of delivering measurement and ROI analysis that takes this new reality into consideration.  “Buyers are multichannel beings.  Buying cycles are cross-channel,” comments Akin Arikan in his recent book, Multichannel Marketing.  “Yet online and offline marketers still perform their measurements of success in isolation.”

So what are marketers’ aspirations; where is the disconnect; what are their challenges; and what are potential strategies for overcoming these challenges?

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Top 20 Integrated Marketing Management Platforms 1 of 3: Marketers’ Needs + Technology Landscape

This past November I posted a blog piece, titled “Top 20 Cross-channel Marketing Execution Platforms?”  The piece was a call for input on the state of technologies that assist marketers in running complex, cross-channel, integrated marketing communication programs that ultimately are focused on delivering one thing – customer sales.  These technologies are becoming more critical to marketing organizations over time.  Why?  Chaos:  Rapid growth in Internet-based communication mediums has led to a power shift in the buyer-seller dynamic; marketers have never been at a greater disadvantage.  Meanwhile, their roles and campaigns are becoming more complicated.  At the same time, they are being asked for greater, real-time visibility into results and marketing ROI as never before.  “The online world … has refused to stay in a nice, little box,” commented Scott Brinker on his Chief Marketing Technologist blog in October.  “[It] has exploded into millions of microchannels, with few boundaries, in constant motion, with people sloshing freely among them — often under little or no direct control of the marketer.”

Since my first blog piece on this topic, I’ve gotten some great feedback from folks in the industry, have spoken with nearly a dozen technology vendors and have digested quite a few recently-published books on the subject, including Sandy Carter‘s The New Language of Marketing 2.0, David Raab‘s Raab Guide to Demand Generation Systems and Steve Woods‘ Digital Body Language — all great reads.  This process has helped to evolve my earlier thinking – validating some initial observations but also changing others.

Source: Adam Needles, Propelling Brands (original)

A key revision from my first piece is a re-thinking of my taxonomy for classifying this technology group.  First, it is clear that a centralized, intelligent and automated layer is emerging at the heart of the continuum of marketing systems (see diagram), and this layer serves a critical functional role in integrating high-level strategic management with tactical execution.  I have chosen to refer to this layer as integrated marketing management.  Second, it is clear that there are several existing software ‘camps,’ with different roots, aims, legacies and constituencies, that are both converging on and vying for this core integration and management layer.  These camps include:  demand generation, marketing automation/enterprise marketing management (EMM) and advanced customer relationship management (CRM).  While each comes at this layer from a different angle, the lines between these systems are blurring and their features and capabilities are increasingly quite similar.  Yet these camps remain important points of distinction and differentiation today because they are how many vendors classify their systems, and they help to understand both the strengths/weaknesses and the capabilities/gaps of these vendors systems.

The result is a complicated decision-making environment for marketers that want to harness the capabilities of integrated marketing management.  “Now everyone is trying to tie it all together, [but] you wind up with a weird gulf in buyer expectations,” commented Steve Woods, CTO of Eloqua, in a phone interview.  “Marketers aren’t used to doing this evaluation.”

That is why I’m writing about this topic.  As a marketer, who has taken the time to become more educated about this space, I’d like to help lift the veil off of what is perhaps the Holy Grail of marketing – having IT systems that actually provide leverage to your integrated marketing activities and processes, rather than just drowning you in more data and execution responsibilities.

So what is an integrated marketing management platform, how can it help marketers, and who are the top vendors in this segment?

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Q and A … IBM’s Sandy Carter on ‘Marketing 2.0’

Marketing via word-of-mouth, social networks and brand communities is not new.  Effectively leveraging social media technologies both in support of these marketing initiatives and as part of an ongoing, two-way customer-brand dialogue, however, has emerged as a burning issue on marketers’ minds. 

Social media technologies, themselves, certainly have their own learning curve, but the greater learning curve for marketers is contending with the fundamental power shift in the customer-brand relationship that social media technologies are enabling.  Thus, recognizing and responding to the new reality that individual customers and brand communities increasingly define (and have part ownership over) brands requires a fundamental shift in our approach to bringing products and services to market.

Source: IBM Press

IBM executive Sandy Carter is a forward thinker on this issue whose experiences and industry dialogue eventually led her to realize that marketers need a new set of tools if they are going to better contend with this power shift.  Her new book, The New Language of Marketing 2.O:  How to Use ANGELS to  Energize Your Market, delivers just such a ‘tool box’ for marketers — presenting a normative framework, together with numerous case examples from companies in a variety of B2B and B2C industries, to help marketers think through these challenges inside their own businesses.

Few are as well-equipped to tackle such a subject as Carter, who has had an impressive career in the enterprise software arena and who currently is IBM’s Vice President, SOA and WebSphere Marketing, Strategy and Channels.  In this role, she is responsible for IBM’s cross-company, worldwide SOA initiatives and is in charge of one of IBM’s premier brands, IBM WebSphere, which under her leadership has shown strong growth.  She also led her global marketing organization to garner 14 industry marketing awards in 2007.

What is Marketing 2.0, and what are Carter’s thoughts on how marketers can gain leverage in the dizzying world of social-media technologies to energize their marketing programs?

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Next Generation of Marketing Services Agencies 1 of 2: Pillars and Barriers

Over the past few months I’ve checked in with a number of current and past colleagues and acquaintances who work at a variety of marketing services agencies — PR, ad agencies, social-media firms, brand consultancies, etc.  In addition to the usual pleasantries, our discussions could not help but touch on the state of the industry.  I’ve also seen and commented on a growing critical mass of news articles and blog posts on the future of advertising and PR  firms.

Source: iStockphoto

What has been interesting about all of this dialogue, both online and off, is one consistent theme:  The business environment for ‘traditional’ agencies is changing … radically … and overnight. 

“I hear death is imminent for your business model, in fact I’ve heard the industry itself might be beyond repair,” commented Kyle Flaherty, a former PR agency professional and current tech-industry marketing director (now on the ‘client side’), in a December post on his Engage in PR blog.

What is causing this ‘plague’ of Biblical proportions throughout the agency world, and how can agencies overcome this situation by preparing for the next-generation of client expectations?

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