Beware the Marketing Data Double Standard

By Julie Schwartz, ITSMA. jschwartz@itsma.com

Why do so few C-suite and line of business executives rely on marketing data to make strategic decisions? We know that the executives are holding marketing accountable and that marketing is producing a bevy of reports chock-full of data. But what’s happening to that data? Apparently, not much.

This is one of the key findings from the recently conducted joint ITSMA, VisionEdge Marketing (VEM), and Forrester Research, Inc. 2013 Marketing Performance Management (MPM) Survey. According to the survey, just 9% of CEOs and 6% of CFOs leverage marketing data in this manner. The numbers are a bit better for the line of business executives, however not by much. ITSMAVEMForrester_MPM Survey_RelyData_smAnd incidentally, the numbers are virtually unchanged from 2011 when ITSMA asked the same question in its Data Driven Marketing Survey. Despite the heightened focus on marketing measurement and reporting, we haven’t made any progress. Virtually no progress in two years.

The reasons? I can think of at least three.

  1. Marketing activity, not business outcomes. Marketers insist on using data to justify the marketing budget (and their very existence!) instead of showing how marketing moves the needle on topline growth or profitability.
  2. Operational efficiency, not effectiveness. According to the survey results, the metrics that most commonly appear on marketing dashboards are marketing spend and pipeline data (leads, conversion rates, etc.). And of course, the ever-coveted ROI. ROI measures efficiency. Efficiency is goodness, but not on its own. Efficiency is “doing things right.” Nevertheless, efficiency without effectiveness (“doing the right thing”) won’t get you to your goal: business outcomes. Marketing’s love affair with ROI has to stop! (More on this in my next blog post.)
  3. Past performance, not predictive insight. Few marketers are using data and analytics to predict customer behavior, make strategic recommendations, drive innovation, or impact customer acquisition, retention, or growth—measures that make a stronger connection between marketing activity and business outcomes. Rather, marketers are reporting on past performance. It’s no wonder that business executives find little use for the data marketing produces.

Here’s a question all marketers should ask themselves: Do YOU rely on your own marketing data when making marketing decisions? DataDrivenMarketingSurvey_smOr are you relying on your experience and intuition? My guess is that a surprising number of marketers aren’t even using their own data. That’s exactly what ITSMA discovered in our 2011 survey and I don’t have any reason to believe the situation is any different today.

If marketing data doesn’t use its own data to improve effectiveness and make strategic decisions, why should the C-suite?

15 comments

  1. KK Molugu

    Julie, Very interesting article and great insights. In my work, as a marketer and data analytics agent (heavy background in IT), we use data from our systems to make business decisions to impact top line numbers. In a typical marketing organization marketers don’t have the following to make business decisions on time to make an impact;
    - don’t have access to all the data – systems are build for operations and not for marketing :(
    - don’t have technical expertise in data and analytics
    - don’t have unified marketing systems (there are systems out there but really out of budget to implement)
    - limited support from systems/IT – they have other things to focus

    When market conditions are dynamic and with issues mentioned above, I strongly believe that marketers are left out to drive for efficiency (tactical) than focus on the effectiveness (strategic). Every marketer wants to focus both on efficiency and effectiveness and definitely wants to impact corporate top line number, but due to issues we face and ‘cant stop’ attitude of marketing, it is a huge challenge we face every day. In addition to all these, marketers are under the pressure to prove marketing budgets. My 2 cents

  2. Zeeshan

    There is now an increasing demand from CEOs to marketing departments to justify their budget using ROI; it’s not the marketers who have a love affair with it. A lot of organizations have a blunt translation of marketing ROI, which is to tracking revenue gained against the cost of a campaign. Agree with point 3 and the necessity around marketing automation investments.

    • Julie
      Julie

      Thanks for commenting. You are correct, CEOs (and CFOs) are asking for marketing ROI, but they too need to be educated. Showing the C-suite that marketing can do more with less is not going to get the company closer to achieving its business goals. It’s just going to burn out the CMO. It’s no wonder they don’t last too long!

  3. Bill

    Julie, I am extremely passionate about this topic and really appreciate alternate points of view. I believe that marketing has three fundamental responsibilities:

    1) Identify and capitalize on emerging competitive opportunities
    2) Provide greater clarity in uncertain marketing conditions
    3) Optimize marketing efforts with limited resources

    Many marketers do not leverage their own data to accomplish these goals because they don’t have the tools, an understanding of what tools they need or the ability/resources to implement them.

    In our experience this is because they do not differentiate between strategic tools and tactical tools. 99% of tools available are tactical in nature (i.e. Google Analytics, sales automation, lead generation, etc.) and will never deliver strategic value because they are all systems/efficiency centric and not business/effectiveness centric.

    Marketers struggle because they hope to leverage tactical tools to drive strategy, which is also why they are not engaged enough during strategic decision making. Solving strategic business needs will define the data, tools and tactics needed.

    In order to be truly strategic and begin to leverage data to gain predictive insights analytics, a model and framework of metrics is required. Until marketers leverage their data through this approach they will not be able to deliver true strategic value to the organization.

    What are everyone’s thoughts?

    • Julie
      Julie

      Bill,

      Well said! I think you make a very strong point about marketing tools being tactical and the difficulty of using tactical tools to drive strategic thinking. It just doesn’t work, does it?

      Julie

      • Bill

        Marketers need to come to the realization that if they want to tie marketing activities to business outcomes they will need much more data than available in marketing automation, website analytics, marketing resource management, or sales automation systems.

        Business acumen as well as IT resources are needed to round out the picture if marketers are to be successful. Breakdown the barriers within these silos and the rest will follow.

        Exciting times to be a Marketer…

    • Julie
      Julie

      Gray,

      This is another good question. Unfortunately, my research and experience is limited to B2B so I cannot comment on B2C. Hopefully there are some B2C marketers out there who will join the conversation and shed some light.

      Julie

    • Julie
      Julie

      Good question Martha! From my experience, they are using data from finance, sales, and strategic planning. interestingly, the LOB leaders and sales leaders are more likely to be using marketing’s data than are the C-suite.

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  6. Michael Freeman

    I agree that most marketers are too focused on activity and efficiency. However, I think part of the problem is that for many marketers they don’t have their campaigns and systems setup in a way to accurately track outcomes that are tied to specific actions.

    Furthermore, most marketers are always pushing ahead and don’t take the time to study the data enough to gain insight into what is actually happening/happened. If you stop occasionally to understand what is really occurring in the data, then you will more likely be able to recognize the patterns, ignore the noise, and make informed decisions and more reliable predictions for Marketing and other departments to use in their decision making. Few marketers I come across have that patience. However, the move towards Inbound is starting to help change that although there is a long way to go.

    • Julie
      Julie

      Michael,

      You make some very good points. Thank you for adding to the discussion! Why do you think marketers don’t take the time to dig into their data? Are they too busy/understaffed, or is it a skills issue? Our research points to a lack of analytical and technology skills in many marketing organizations. I’d like to hear your POV…

      Julie

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