Marketing Tactegy

Building a business case for social media marketing

I will be moderating a panel discussion at the upcoming Measure Up Conference in Chicago March 10 - 12, ( http://bit.ly/4zkuuD ) on this topic. If you have any thoughts or questions you would like to ask the panelists, please let me know. It would be great to start a LinkedIn Discussion on this and use the issues brought forward here as input for the conference. 

Actually, there are also a bunch of sessions on WOM and social media, and measuring results so this will be a great way to start the discussion ahead of the actual physical conference. 

The panelists include the VP of Marketing at the San Diego Zoo and the CMO of Atlanta Gas Light. 

It should be pretty interesting. 

Some Interesting Survey Results on Marketing Effectiveness

I recently fielded an ad hoc survey of European marketers (Northern Europe) on their impressions of how successful they perceived themselves at driving improved marketing effectiveness and support corporate sales objectives.  There were some interesting results that I wanted to share with you.  On the whole the respondents showed reasonable results in terms of their current tracking and measurement of their marketing effectiveness and ROI. 

The bad news on marketing effectiveness and marketing management

There were however 17.9%, just less than 1 in 5 that didn’t measure their marketing effectiveness.  Of these, they were clearly no in the critical path to corporate success.  This is evident in how they answered the question, “How do you set your marketing budget?”  The answers broke down as follows:

• Just less than half of them can’t describe their budgeting process
• Just more than one third claim they do it based on objectives
• Just less than one third set their budgets based on what’s left in the corporate plan

All of these marketers claim that their marketing is not successful at supporting the achievement of the corporate revenue plan.  All of them also claim they are doing even to a little bit worse than their competition.

The good news on marketing effectiveness and marketing management

The good news is that over 80% of marketers can measure some or all of their marketing results.  They do this by measuring direct response, connecting revenue directly to each marketing activity or doing it across the entire marketing mix.  Of these marketers, 70% set their budgets based on marketing objectives.  The other 30% split about evenly to setting their budgets based on a percent increase over the prior year or a fixed percentage of plan revenue.

This means that just more than 50% do some measurement and use specific objectives to set their budgets.  Unfortunately, just less than 50% don’t measure their results and don’t use objectives to set their budgets.  It is these marketers that are simply seen as an expense as opposed to a critical component of the revenue generation process.

If you’d like to hear more about the results from this survey let me know.  Or if you would like to read about this, get ready for my upcoming book specifically on this topic.  Go to www.DemandROMI.com/EvenMoreROMI.html for more information.

I look forward to hearing from you.

The Disconnect Between Marketing Budgeting and Marketing Effectiveness

I just returned from whirlwind tour of Asia and the a short speaking engagement in Poland and I realized how disconnected the marketing budgeting process is from the measurement of marketing effectiveness.

The missing marketing science

Marketers typically build a budget based on how they want to allocate their precious budget dollars against their assumed budget.  They have some key events pre-defined, they know they will be spending a certain amount on a new product/brand launch and the rest is sprinkled between the various media based on last year’s budget.  If they’re lucky, they take the prior year’s anecdotal successes and allocate a little bit more to those marketing activities that they believe were actually more effective than the rest.  Unfortunately there is no science involved.  This applies to both business-to-business marketers as well as consumer marketers.

The new objectives-based approach

Marketers must more concretely state their marketing objectives before they start to build their budgets.  What is it that the corporation wants to achieve, in terms of revenues, profits, market position and brand and how can the marketing budget best achieve this?  And a big component of this process has to be the inclusion of a process to measure the success of marketing, both qualitatively and quantitatively.  One new component of the budget for many marketers now needs to be the measurement of marketing’s effectiveness.  Only with this new line item in the budget can we know that we are serious about measuring our effectiveness and driving improved results based on data as opposed to gut feel or intuition.  We can finally connect the dots between marketing objectives, budgeting and marketing effectiveness.

If you’re interested in learning more about how to build an objectives based marketing budget, take a look at our new marketing budgeting workshop at www.marketingbudgetingworkshop.com.  Or if you have any thoughts our qu3estions on this topic please let me know.