As Budgets Ebb, New Opportunities Arise for Analytics-Minded Marketers
There was some buzz about a recent Gartner CMO survey that showed that marketing spend in 2017, as a percent of overall revenue, is down from 12.1% in 2016 to 11.3%. As Gartner research director Ewan McIntyre told AdExchanger, the dip represents a check in the balance after a period of increased innovation and growth spending:
“Now we’re at a point where CMOs are being asked to prove accountability,” McIntyre said, noting that CMOs are allocating 9.2% of their marketing budget towards analytics to do just that. “One of the biggest jumps in this year’s survey was ‘analytics’ which passed ‘website,’ ‘digital commerce’ and ‘digital advertising’ to become the biggest line item on a CMO’s budget.”
As leaders in marketing analytics, this is obviously music to our measurement-attuned ears. This Gartner research is right in line with a survey the Forbes CMO practice and Neustar conducted recently, which confirmed that marketers who invest in a data-driven accountability approach and tools are achieving 5% higher levels of performance from their marketing investment and 7.5% better growth outcomes at every stage of the customer journey. In other words, CMOs who invest in analytics find that their investment not only drives greater efficiency in marketing ROI, but also makes it a whole lot easier for them to prove their own—and their whole team’s-- organizational value.
For our Neustar MarketShare analytic solutions, we typically identify a 20-30% increase in effectiveness for clients that have adopted our marketing mix model tools.
So the good news is: if you believe that analytics will make you a more effective marketer and a bigger asset to your organization, you can take that to the bank. Reduce your overall marketing spend and make it work harder for you. Win, meet win.
But we know that having the right instincts and appetite for innovation and change is only the first, if crucial, step in a sometimes-uphill battle to convince other stakeholders in your organization what you already know about the value of analytics. Integrating new approaches and tools of any sort can create pain points that require you to have to justify, and sometimes question, the rightness of your own convictions. Not everyone shares the same goals or objectives and this can create organizational friction. That social media agency you work with? They may worry that new analytics solutions will encroach on their own measurement tools (they don’t; in most cases, channel-specific measurement works in complementary ways with our own cross-channel MMM tools).
It’s worth persisting through these, and other, challenges. For one, no marketer wants to be wrong side of innovation and value-driven change. That’s where finding the right partner comes in (we know a great one, as a matter of fact). A smart and strategic analytics partner can help you work through internal challenges and frictions with internal stakeholders and identify the best solutions to help set your organization up to reach and exceed goals, both in the short and longer term. Persistence through internal challenges pays off. Having the ability to measure, analyze, and adjust marketing efforts makes your job a whole lot easier in the long run. This is not just my (admittedly impartial) opinion. Our clients tell us that all the time. Here are four ways we hear that implementing the right analytics solutions helps businesses make quantifiably better marketing decisions and see higher ROI:
- Empowers Business Confidence: Every CMO wants to make data-supported decisions, both for the validation that brings when results roll in and, also, to have better control over budgets and spending. Our client, TD Ameritrade CMO Denise Karkos says: “I don’t have to be the CMO who is going to her CEO and asking for more money all the time if I know in fact there’s diminishing returns. So, it really empowers me to make the best decisions for the company.”
- Helps Marketers Know How, When, and Where to Engage Consumers: With the right tools, marketers can plan, test, learn, and adjust creative on the fly with much greater certainty than those flying blind. Per our client, CMO Denise Karkos, “Science fuels the art and it informs the art. You actually have so much more intelligence now about the consumer, not only behaviorally, psychographically, but also how to connect with them, where to connect with them, when all of those levers should be pulled.”
- Informs Smarter, More Nimble Budget Allocations: Over a third of CMOs (34%) who have adopted an analytic approach report they are nimble enough to make data-driven optimization and budget reallocations on a daily basis – three times the level of the rest of the sample. According to Ben Jankowski, Group Head for Global Media at Mastercard: “They’re able to tell us overall: what’s our overall effectiveness, and then down to the granular level: this vehicle verses that vehicle. MarketShare was a key contributor in helping us go across all the swim lanes to do synchronized swimming, if you will.”
- Helps Streamline Process: Jankowski also noted how much easier it made his job, being able to distill an overwhelming number of variables into a manageable number of clear results: "MarketShare has helped us take all the information from a variety of sources... something like seven hundred variables in our business [and] told us what our ROIs were... They gave us a lot of information that really boiled it down into six or eight metrics which are really simple to understand.”
So, next time your boss asks you to cut your budget, don’t panic. Instead, repurpose spend into tools that drive marketing accountability, that make your life easier, that empower you to make fast and confident decisions, decisions that drive business value. Repurpose spend into analytics. Analytics makes the best marketers better.