A new study has lambasted marketers’ financial skills and the marketing programs run by education providers, claiming that as many as 90% of marketers are not trained in marketing performance and ROI, partly due to the fact that nine out of 10 marketing courses don’t have a unit focused on the topic. Because of this educational void, 80% of marketers struggle to properly demonstrate the business effectiveness of their marketing spending, campaigns and activities to their top management, the report says.
At a time when CEOs are putting even more pressure on Marketers to generate (and prove they generate) incremental customer demand for the companies’ products/services (i.e their ability to generate more sales, more market share, more prospects and/or more conversions), Fournaise tracked four head-shaking results:
1) 67% of Marketers don’t believe Marketing ROI requires a financial outcome (these are the very Marketers who struggle to give the correct mathematical formula for Marketing ROI), demonstrating a total lack of understanding of what ROI is all about.
2) 64% of Marketers use Brand Awareness as their Top Marketing ROI KPI, 58% place “Likes”, “Tweets”, “Clicks” and/or “CTR” in their Top 5 Marketing ROI KPIs, and 31% still believe simply measuring the audience they have reached is Marketing ROI.
3) 63% of Marketers don’t include any financial outcome when reporting on and presenting Marketing results to their CEOs & Top Management.
4) More than 80% are unable to write a P&L and Balance Sheet correctly when given a simple business scenario. These Marketers are unable to give the correct definitions of basic Financial KPIs used day in day out by CEOs and Boards (such as EBITDA, P/E Ratio or ROE), and are unable to correctly explain the impact Marketing can have on a company’s Balance Sheet – demonstrating an inability to understand and speak the Finance & Accounting language.
The Fournaise group has a history of issuing studies that directly challenge current marketing capabilities. While one could make an argument that there are a lot of marketers out there who are clueless about ROI and are more interested in getting their names in trade magazines it has been my experience that more brand people are really questioning tactics like social media marketing and big data as it drives the bottom line.
The days of high profile marketing executives who are a legend in their own minds are quickly coming to an end. A very wise man once told me “beware of people who strive to get their names in the business magazines because they are out to make a name for their resumes.”
BOTTOM LINE: Marketing has to drive bottom line company results and demonstrate value in real-terms that the “C” suite executives understand.