Duke University’s CMO survey reveals that about 70% of companies in the US do not quantitatively prove the impact of marketing on the business. Instead, to justify marketing efforts it seems they rely more on qualitative information (50%) or they are not able to show the impact at all (14%).
At the same time 64% of the respondents feel pressure from their CEOs to prove the value of marketing and 63% say this pressure is increasing.
This is a good thing.
Marketing budgets on average account for about 11% of total company budget. Roughly this money is spent on people, media and campaigns, consulting and, in some cases, technology.
Not being able to calculate the value added by marketing means it is impossible to justify marketing investments and tradeoffs, like whether you should invest in marketing technology, new hires or additional campaigns, cannot be made.
Taking the first steps
While it may take some time before you are able to calculate or predict value added by each and every campaign and value added by the marketing function as a whole, a good first step for many companies is to have a thorough look at their marketing budgets and make sure the budgeting structure is actionable and that it is aligned across legal entities and country organizations.
Once this is in place, follow-up projects can be defined to impact specific parts of the marketing budget so as to make marketing more accountable, more efficient and more effective step by step.