The role of marketing has changed dramatically in recent years. And no, that’s not exactly a news flash. But it’s still worth repeating — especially in light of the debate over a possible tech bubble.
Once, it was viewed as a cost center for businesses. Money was spent with the vague goal of creating interest and building brand awareness. Today, marketing is expected to be a revenue generator. The pressure has increased on marketing teams to demonstrate their direct impact on the company’s top line.
“Marketing historically has been thought of as the arts and crafts department,” said Adam New-Waterson, the chief marketing officer at LeanData. “It’s where creative people got to make pretty commercials and stuff like that. Now it’s all about understanding and measuring data.”
“I don’t agree that you cannot track things that will give you an accurate picture of marketing’s impact on a sale.”
Marketers slice, dice, sort and segment every available bit of statistical information to gauge their influence and look for ways to improve the business.
But there also has been a curious contradiction. This transition toward greater accountability around revenue has been occurring precisely when companies are willing — even eager — to spend more money than they make. In Silicon Valley’s technology startup ecosystem, “grow as fast as possible” has become far more fashionable than actual profits.
There’s no denying that the strategy has merit at a time when venture capital is readily available for nimble companies that either are carving out new industry spaces or disrupting old ones. But market trends are cyclical, and the question is what happens if that easy money dries up.
LeanData has been examining the sturdiness of the Silicon Valley economy for one, simple reason. If a tougher economic climate indeed is ahead for the tech businesses — you know, the whole “Winter is Coming” motif — then it will greatly affect how marketers do their jobs. The free-spending days will come to an end. Tighter marketing budgets will require that dollars are deployed more wisely.
And that means solving the puzzle of marketing attribution will become even more crucial.
The rampant growth in marketing technology tools has made more information than ever available for marketers to track and measure their campaigns. And studies have shown that companies are planning to purchase even more MarTech solutions in the future.
Still, a large percentage of marketers don’t trust the metrics they are reporting with these new solutions. And recently Duke University’s CMO Survey described the state of marketing this way: “Given all the money being spent on analytics, there is surprisingly little scrutiny about their impact.”
Or their effectiveness. Marketing teams might be swimming in data. The problem is that all that information is still providing an incomplete view of marketing’s influence.
“There’s a naive understanding about what attribution means,” said LeanData’s New-Waterson. “That’s where the whole industry is right now. It’s like looking at a black-and-white picture and then saying: ‘OK, figure out the red and green colors in this photo.’ There’s not much depth there. Yet businesses are making critically important decisions based on what they think they know. It’s way too easy to draw the wrong conclusions.”
As the on-going discussion about the health of the tech economy has intensified throughout 2015, most of the attention has focused on the billion-dollar “unicorn” class of companies. But the reality is that any slowdown among tech’s biggest players would have a cascading effect throughout the entire startup community.
Business leaders who believe that there are warning signs of a looming correction describe a need for companies to return to basic business principles – like turning a sustainable profit. For marketers, that means figuring out how much you should be spending on the campaigns that give you the greatest chance of closing deals. It will be about optimizing results to help the business.
Solving the Rubik’s Cube
That brings us back to that whole marketing identity shift from cost center to revenue driver. Simply put, that can’t happen without truly understanding the impact of your campaigns and how to improve them. And more data is not the same thing as accurate data.
Or as New-Waterson puts it: “What if you’re basing the entire business on incomplete or just plain incorrect data?”
There’s a reason why the effort to quantify marketing’s impact has been something of a Holy Grail-like quest – it’s hard. Marketing experts are in agreement about the steep challenges of attribution, especially in long B2B sales cycles involving large buying committees. Figuring out why a customer ultimately bought a product has remained a quandary.
But difficult is not the same thing as impossible.
“I agree with the idea that marketers have to do everything well over a long period of time to maximize their chances for success,” New-Waterson said. “But I don’t agree that you cannot track things that will give you an accurate picture of marketing’s impact on a sale.”
The tools for finally doing that accurately, he added, are coming soon.
Cracking the Attribution Code
Marketing teams are under more pressure than ever to quantify their influence and justify budgets. At a time when marketers are expected to prove Return on Investment, LeanData is exploring the challenges they face and how it is possible to improve account reporting.
- “There’s a Naive Understanding about What Attribution Really Means”
- The Challenges of Marketing Attribution
- Solving the Riddle of Marketing Attribution
- The Paradox of Multiple Attribution Models
- How Storytelling Makes Data More Powerful
- PR Attribution: “It’s Just a Tough Sell”
- Tall Tales, Half-Truths and Other Improbable Stories about Marketing ROI
- Understanding the Data: The Warriors and Basketball Analytics
- The Winds of Change