US Marketers Continue to Debate RoI Accountability Metrics

02 July 2008

NEW YORK: Despite increased collaboration between corporate marketing and finance functions, US marketers are still struggling to create accountability programs that effectively measure the bottom-line impact of their efforts.

So reports the latest annual study conducted for the Association of National Advertisers and Marketing Management Analytics.

Overall, marketing accountability has a presence in nearly every major company, with a growing number of MA programs comfortably stashed within marketing departments. 

Forty-five percent of respondents indicated that their accountability programs are based within the marketing group, a jump of 14 points over last year.

The latest survey showed progress in improving the relationship between marketing and finance. Thirty-three percent of respondents reported "full cooperation and an open dialogue" in establishing metrics and methodologies for marketing ROI – up from 22% in 2007.

Moreover, nearly half of respondents found "some cooperation". Increasingly, survey participants said they believed that marketing and finance "speak with one voice" or "share common metrics".

As to the goals set for marketing accountability, these varied greatly ... 

  • Forty percent of respondents said that marketing ROI goals were based on internal benchmarks within the marketing department.
  • Approximately one-third reported that marketing ROI goals were closely aligned with overall corporate goals.
  • However, one-third indicated that there were no written goals for marketing in their companies.
Where marketers had established accountability metrics ... 
  • Sixty-one percent measured marketing's impact on sales, and 73% viewed them as useful in establishing marketing budgets.
  • Sixty percent looked at consumer attitude, but only 39% considered these metrics to be useful.
  • Overall, 23% of respondents expressed dissatisfaction with accountability metrics.
  • Marketers are investing in accountability programs such as brand and customer equity models (53%), predictive models for direct response (43%); recency and frequency monetary value models (45%); and customer lifetime value models (27%).
  • Importantly, over half (57%) use their marketing accountability programs as a factor in increasing or maintaining their marketing budgets.
Key strategic marketing accountability challenges are ...
  • Understanding the impact of changes in consumer attitudes and perceptions on sales (45%).
  • Understanding the offline impact of online advertising (26%).
  • Understanding the impact of experiential marketing - such as event sponsorships - on sales (23%).
  • Measuring long-term ROI for a time period greater than one year (19%).
Comments ANA president/ceo Bob Liodice: "In demonstrating the value of marketing as a contributor to business growth, it is important for marketers to engage their counterparts in finance and throughout the organization.

"We are pleased that marketers are moving in the right direction, but there is still much work to be done."

Data sourced from Association of National Advertisers (USA); additional content by WARC staff