Jellyfish, tornadoes, walking over subway vents… those are things that scare me (kind of lame, right?)
Seriously, how can this not make you at least a little nervous?
It’s October, which is officially the scariest time of year. No, not because the dreaded “Christmas creep” is starting earlier and earlier;this year you might see advent calendars on sale next to towers of your favorite Reese’s Peanut Butter Pumpkins. October is Halloween month. And since us marketers love to capitalize on current and relevant events, what better time to talk about what’s so scary about marketing than now?
Today I’m going to kick us off with something every good marketer should be conscious of: the fears that the actual decision makers face. The CEO isn’t particularly worried about having fewer Facebook fans, or a 0.017% decrease in clickthrough rates. They are worried about ROI – more specifically, why their marketing team is not measuring and reporting on ROI.
Everyone agrees ROI is important
Everyone knows ROI is important. Even if for some crazy reason it’s not a top concern to you as a marketer (because it should be), it is very important to your boss. Now with the popularity and access to different marketing technologies (and more data), the pressure to use this data is higher than ever. In IBM’s 2014 CMO Survey, 63% of marketers ranked Marketing ROI as the #1 measure to gauge marketing success. Yet 56% of CMOs feel unprepared to tackle “ROI accountability,” and 71% feel unprepared to manage the “data explosion” that is now available to them.
More than half of all CMOs don’t quantitatively measure ROI
So if ROI is so important, why is nobody measuring it? I recently had the opportunity to watch Paul Roetzer’s presentation on The metrics that matter: how to build performance-driven inbound marketing campaigns at Inbound 2014. What stood out most to me from Paul’s presentation wasn’t actually his advice on what metrics you should be monitoring on a monthly basis, but the statistics on how few marketing professionals are actually measuring the ROI of their efforts: only about one third of marketers and CMOs have proven the quantitative impact of their marketing spending (2014 CMO Survey).
According to The CMO Survey, only 37% of marketers have quantified the short-term impact of their marketing spend (which drops to 33% of marketers when talking about long-term qualitative impact). 44% of marketers claimed despite lacking quantitative numbers, they had a good qualitative grasp on the impact of their spending, but 20% flat out don’t measure ROI at all.
If those aren’t some seriously scary statistics I don’t know what are. For the CMOs that took part in The CMO Survey, they manage marketing budgets that account for 11% of their firm’s total budget. That leaves me wondering: for the CEOs of the 20% of companies that aren’t measuring the ROI on more than 10% of their total spending, how do they sleep at night?
ROI is measured in dollars, not visits
Great, so you should be measuring your ROI, got it. What’s the best way to do that? Interestingly enough, if you google “how to measure content marketing ROI” you will find a mountain of guides, including some from reputable sources like Ad Age, Content Marketing Institute, and even Paul Roetz’s Inbound presentation, that list off all of the “important” metrics you should be tracking to measure ROI: page views, unique site visits, return visits, likes, tweets, social media shares, eBook downloads, email click… oh yeah, and sales revenue.
Why is it that every guide on ROI always puts the most critical (and arguably the only relevant) metric last? I hate to burst your bubble, but more site visitor does not display an ROI. More leads are not a display of ROI. Heck, even “sales qualified leads” are not ROI (I found that one out myself the hard way).
Imagine you spent the end of Q4 last year busting your butt to increase your marketing budget to $80K this year so you could unroll a sexy new inbound marketing campaign. Your boss finally caved and you’ve been excitedly blogging away. Fast forward to 6 months into the campaign, you’ve been creating content for a long time now, you’ve seen site visits go up and up, and the CEO wants to know just what impact has the extra $30K you got added to budget made – what do you tell him?
“Look! We’ve doubled our monthly site visits, and our visit-to-lead conversion rate is at 2%!” While those are impressive statistics for a marketer, the CEO will probably remain unimpressed. Remember, the CEO primarily cares about one question: what does this mean in dollars?
Unless you can connect your initial marketing investment (in dollars), to eventual sales data (in dollars), you’re not actually measuring a return on your investment. You’re measuring effects, sure, but how can you base any informed decisions on that?
That doesn’t mean you shouldn’t be measuring visits and leads; you absolutely should be. But be sure that you are measuring them in the context of how likely they are to eventually result in a sale. As tempting as it can be to just measure and report on everything – be careful not to get caught up in vanity metrics (anything that makes you look good as a marketer, but means diddly-squat when it comes to a ROI).
Watch the Recorded Webinar: Unmeasured ROI (And What to Do Instead)
Edit: Last Tuesday, October 21 we hosted a webinar on this very topic! Check out the recording below: