SUMMARY:
- Gartner’s research suggests that chief marketing officers need to demonstrate the value of their work more than ever.
- CEOs see a serious disconnect between marketing budgets and sales.
- Brand marketing is changing quickly, as performance metrics are being scrutinized more.
- Marketers who compute their ROI are 1.6 times more likely to be awarded higher budgets for their marketing activities
Marketing budgets have fallen to 6.4% of companies’ revenue this year from 11% last year, according to the annual CMO Spend Survey by research firm GartnerInc as CEOs are more focused on sales after the pandemic.
Marketing executives at consumer products companies said their marketing budgets for the current fiscal year were 8.3% of revenue, down from 10.8%. In contrast, their peers at travel and hospitality marketers said their budgets had fallen to 5.4% from 10.2%, Gartner said. So what’s going on?
1ne: Companies are focusing on revenue and supply channels to make up for lost sales during the pandemic peak.
2wo: Research indicates that more CEOs see a serious disconnect between sales and marketing and see marketing budgets as an expense to be cut.
3hree: Too many marketers are continuing to raise social media budgets when showing a direct social media ROI is becoming more difficult.
Brand marketing is changing quickly, as performance metrics are being scrutinized more. The days of “likes” on social media are becoming moot as marketers struggle to show their correlation to sales. Coke has millions of social media followers, yet their sales are declining while Pepsi’s are increasing. Coke’s answer is to rebrand their sugar-free product with a new look and formula, but that isn’t going to work.
The other huge issue that is seldom discussed is that too many CEOs see marketing as an expense. They want hard metrics to show a clear correlation between marketing budgets and bottom-line spreadsheet metrics.
Marketers who compute their ROI are 1.6 times more likely to be awarded higher budgets for their marketing activities. (Tomas Laurinavicius)
According to a HubSpot report, marketers should familiarize themselves with how to calculate rates of return on their marketing events. This way, they can show their supervisors and managers the positive impact of marketing, which will in turn confidence in their work and make them entitled to a higher budget.
To show ROI, marketers need great analytics people to connect numbers into key metrics that executives understand. Anyone can make a PowerPoint slide to show the level of engagement on social media, but it takes someone who understands marketing to connect that to key brand objectives.
Research by Bango, who surveyed more than 200 CEOs, maintains that poor digital marketing practices and meaningless metrics are “putting the board to sleep.” More than half the chief executives (59 percent) say that social media channels aren’t generating sales for their businesses.
“Nobody’s saying that social media can’t add value,” Bango CMO and co-author of the report Anil Malhotra said in a statement. “The problem is that this value isn’t translating to the boards of the businesses surveyed.”
In other words “show me the sales”
