The Quest to Prove Marketing’s Impact

December 1, 2015 Mark Emmons

11696740225_655ba24877_z

A picture is supposed to be worth a thousand words. Scott Brinker did something more ambitious. He created a single diagram jam-packed with nearly two thousand companies.

And boy, does it ever tell a story.

Brinker’s compilation of 1,876 vendors across 43 categories in his 2015 Marketing Technology Landscape Supergraphic is an eye-catching representation of the expanding universe of MarTech companies. All are building tools to help marketers do their jobs better and show real impact on business.

“I would push back on the idea that we’re actually seeing marketing’s contribution to ROI.”

Tweet this

But even with all of those digital insights now available for B2B marketers to track and influence the modern buying journey, Brinker believes that being able to accurately demonstrate return on investment (ROI) remains an elusive goal.

“In the big picture, it’s really hard,” said Brinker, the chief technical officer at ion interactive and the blogger at chiefmartec.com. “We have a set of data with specific touch points that we’re able to measure. But at the end of the day, we don’t have all of the data. I’m not a believer that marketing is now down to a science and that you can get to a perfect ROI.”

While marketing has become more data-driven than ever, the consensus opinion is that it still remains very much an art.

LeanData interviewed several marketing experts and industry observers for this ongoing series examining the hyper-focus on growth by technology startups. Most voiced varying degrees of doubt about marketing’s ability to fully prove its influence on ROI – despite the ongoing boom in technology tools.

“I don’t see it yet,” said Ruth Stevens, president of the eMarketing Strategy consulting firm and an adjunct professor of NYU Stern School of Business. “My sense is that marketers are under so much new pressure because much of the budget is being spent in digital channels where the perception is that it’s all measurable. But the attribution question is still a conundrum. It’s really hard to say what sealed the deal in a complex selling environment where the sales cycle is long and lots of parties are involved in the buying committee. No one really knows. You’re never going to be able to say that.”

Julie Schwartz, of the influential B2B research firm ITSMA, agreed with that sentiment – especially in the enterprise sales world.

“I would push back on the idea that we’re actually seeing marketing’s contribution to ROI,” said Schwartz, ITSMA’s senior vice president, research and thought leadership. “If you’re talking about a complex, multi-million-dollar solution, I don’t think you can really isolate and calculate marketing ROI. For many of the companies we deal with, you can’t say: ‘Someone read this white paper and as a result they spent a half-million on this solution.’”

marketing_technology_jan2015

Marketing Technology Landscape Supergraphic (2015)

But businesses keep trying to solve that riddle as they search for richer insights into how and why people buy. And the growing MarTech ecosystem aids that cause by providing marketers with tools that offer an unprecedented level of understanding of the entire buying cycle.

In fact, research is showing that firms intend to continue boosting their budgets for new technology. An August report by VentureBeat found that companies plan to increase their spending 73 percent over the next three years on marketing analytics. For enterprise-sized B2B companies, the figure is closer to 100 percent.

Also, a recent CMO Survey indicated that marketing executives will grow the portion of their budgets devoted to tech solutions from 6.7 percent to 11.1 percent over the next three years. Advanced analytics and big data, the report concluded, have “set off something of a buying frenzy.”

Clearly, the marketer’s toolbox is growing.

But there was a caveat to both of those studies. Even though CMOs face more expectations to demonstrate performance, paradoxically more data doesn’t seem to be helping them do that. VentureBeat found that marketers reported their “levels of confidence in analytics’ ability to generate insight are mediocre, at best.”

The CMO Survey authors found even more skepticism.

Toolbox

The Marketer’s Toolbox

“Given all the money being spent on analytics, there is surprisingly little scrutiny about their impact,” they wrote in the Harvard Business Review. “In the end, analytics effectiveness boils down to two questions: Do marketing analytics improve profits or ROI? And are companies using marketing analytics effectively?”

They answered their own questions by saying that while they do have a significant effect, “their use is surprisingly limited.”

It seems to come down to a question of trust. A recent LeanData survey looking at sales and marketing alignment found that 39 percent of marketers don’t believe the pipeline and revenue attribution numbers they are reporting. Maybe that speaks to the age-old question that marketers always have struggled to address with confidence – what exactly is their impact on successful deals?

Schwartz, of ITSMA, believes it’s possible to quantify ROI influence in some transactional B2B purchases. But placing an exact value on marketing’s role in long sales cycles is something else entirely.

“That’s going to be really difficult to isolate what was the impact of a particular marketing activity because it’s all a network effect,” she said. “Everything has a synergy. Nothing really works on its own.”

How businesses measure marketing’s influence, Schwartz added, is unique to each firm.

“It’s different for every company and it’s based on a conversation with the senior executives and learning from them what are the business goals, what do you expect marketing to contribute and how will you know that marketing contributed,” she said. “That’s going to be a different conversation for every company.”

Brinker soon will be unveiling his 2016 Marketing Technology Landscape Supergraphic. The whole point for creating the annual charts, he said, was to make marketers aware of how much technology was available and the growing importance of integrating it into their businesses.

The graphic, he added, has taken on a life of its own.

“If I were truly open to every conceivable MarTech vendor that I could find, I suspect it would be around 4,000,” Brinker said. “That’s about how many technology companies are out there that in some way touch marketing.”

It also conveys just how much of a hunger there is for marketers to prove their impact on revenue. There might not yet be definitive answers, but the quest to remove the guesswork continues.
 

The End of Growth at All Costs

The boom in Silicon Valley has been fueled by a gusher of venture capital pumping into tech startups. But what happens if the money evaporates? This LeanData series examines the underpinnings of the technology economy and how sales and marketing departments could be profoundly impacted by tougher financial conditions.

 

Previous Article
“There Is a Pain Point in Marketing Today”
“There Is a Pain Point in Marketing Today”

The best way to understand the challenges and priorities of chief marketing officers is to just ask them. I...

Next Article
How InsightSquared Uses LeanData
How InsightSquared Uses LeanData

In a previous professional life, I was a newspaper sportswriter. One of the fun parts of that job was being...