Marketing mix and spend modeling techniques had been battle-tested over last 30+ years. Despite its apparent popularity, results from a recent CMO survey highlights that most CMOs are still in the dark on assessing the impact of marketing spending.
Source: The CMO Survey, cmosurvey.org, August 2013
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Approx. 65% of CMOs are unable to quantify the business impact of a $1 increase or decrease in marketing spend. Some suggestions to start a rational spend decisioning process:
- Think Omni-channel Spend Optimization First: Your marketing and advertising budget has probably been increasing since 2008, and that growth has slowed to a trickle. You migrated dollars to more “measurable” channels and new media – social, mobile, online. To get the most bang from an initiative to quantify and maximize ROI, focus your investment on learning across channels (omni-channel or cross-channel) first, before you attempt to optimize each channel.
- Preempt CFO’s query: If your CFO hasn’t asked yet, you are lucky but your luck will run out soon. She would want to know the ROI for each marketing and advertising tactic. Further, with the street continuing to push for profitable growth in 2013 and beyond, you can’t go to the CFO for increase in budget, if you are unable to articulate the business case. Do your homework and tell your CEO and CFO what you will deliver by changing your budget or allocating it more optimally across media, geographies, target market segments and marketing tactics.
- Hire Analytical Talent And Specialized Expertise: To bring rigor to your marketing investment and allocation decision-making processes, upgrade your talent pool while mixing right-brained and left-brained individuals.