Only 14% of senior marketers whose companies use social network marketing say they are tying their efforts to financial metrics such as market share, revenue, profits, or lifetime customer value, while only 17% of those whose companies are using mobile advertising say they are doing so,according to [download page] a survey released in March 2012 by Columbia University’s Center on Global Brand Leadership and the New York American Marketing Association (NYAMA). This compares to 41% whose companies measure the financial impact of their email marketing, and 47% whose companies do so for their traditional direct mail marketing.
This is despite adoption of new digital tools such as social network accounts (85%) and mobile ads (51%) having risen to a point where they rival the adoption rates of more established channels such as sponsorship and events (90%), print advertising (85%), direct mail (74%), and TV and radio ads (59%).
Among marketers that do measure the ROI of social media, soft metrics appear to be the focus. According to survey results released in January by Wildfire, the top metric used by social media marketers for ROI is increased fans, likes, comments, and interactions (38%). Similarly, an Awareness survey released in December 2011 found that few marketers are tying social media marketing initiatives to lead generation (38%) and sales (26%), with a far greater proportion using soft metrics such as social presence (76%), measured by number of followers and fans, and website traffic (67%) to determine the success of their campaigns.
Cross-Channel Integration Proves a Challenge
Meanwhile, 7 in 10 CMOs responding to the NYAMA survey said that a cross-platform model for ROI is a major goal. However, this goal may remain elusive as long as integration remains a challenge: 77% of marketers overall report that getting their traditional and digital marketing to work better is still a key objective. In fact, half of the companies report they have either recently or will soon reorganize their marketing departments to improve this integration.
Budgets Not Resting on ROI Analysis
Data from “Marketing ROI in the Era of Big Data” indicates that although 70% of senior marketers say their efforts are under more scrutiny than ever before, 57% are not basing their marketing budgets on any ROI analysis. In fact, roughly two-thirds report establishing their marketing budgets in part on historical spending, and 28% on gut instincts. And when looking at specific spending decisions, 21% say they use financial metrics for little or none of the decisions, while 7% are making most or all of the decisions absent any metrics at all.
- Overall, 45% of the organizations surveyed are satisfied with their ability to measure marketing ROI. Those most likely to be satisfied are large organizations with sales of $25 billion or more (55.5%). Only 33.1% of consumer product organizations and just 26.1% of industrial product organizations are satisfied with their ROI marketing measurement.
- 54% of CMOs are satisfied with their ability to measure marketing ROI, but only 43% of those below vice president level are satisfied.
- When asked to define marketing ROI, 37% of the respondents did not mention financial effects. 19% did not think that measuring the financial impact of their marketing was considered marketing ROI.
- 37% of the respondents said they used brand awareness as a universal metric to make marketing decisions. Of those, more than 3 in 5 said it was their only marketing ROI metric.
About the Data: The 2012 BRITE-NYAMA Marketing in Transition Study was conducted by Research Now between January 27 and February 8, 2012. 253 corporate marketing decision makers, director-level and above, were surveyed online. These professionals are employed at large companies (90% have a global annual revenue of over $50 million; 45% are over $1 billion). Respondents were from diverse industries: 42% were from companies that were primarily B2B, 28% primarily business-to-consumer B2C, and 30% a combination of B2B and B2C.