Across marketing blogs, there is a consensus that chief marketing officers (CMO) are under “increased pressure,” “even more pressure” or “increasing pressure.” The role is changing at a tumultuous pace, and digital marketing can feel more like a minefield than an opportunity for one nagging reason: return on investment (ROI). The technology and buzzwords of the day constantly change, but the belief that CMOs can trace every dollar spent to dollars made is becoming widely accepted. It’s time we address this expectation.
Despite what CEOs and board members might believe, airtight ROI tracking is a mirage. According to a 2015 CMO Survey Report, 42 per cent of CMOs claim they can demonstrate the short-term impact of marketing spend quantitatively – even fewer, just 34%, say they can prove the long-term impact.
I would argue that those 42 per cent and 34 per cent of CMOs are either overconfident, or they are pure e-tailers using a select few channels. Cross-channel attribution – the concept of connecting marketing spend in one channel (social, email, web, billboards, TV, etc.) to spending in another – is infinitely complex and often misleading.
Let’s say I’m driving down the street and pass Home Depot. It reminds me that I need to buy a new lawnmower. When I arrive at home, I search “Home Depot” on Google. A Home Depot search ad comes up as the first result, so I click the ad, link to HomeDepot.com and purchase a lawnmower.
Home Depot marketing will think hey, we spent $X on Google Ads and it led to the purchase of a $200 lawnmower, when in reality, their physical store drove the purchase. Keep in mind, too, that I could have scrolled down past the ad and clicked an organic Home Depot link, in which case marketing might have attributed the purchase to good search engine optimization (SEO).
Conversely, I could have clicked a Google ad, researched lawnmowers and then drove to Home Depot to make my purchase (i.e. reverse showrooming). In that case, search ads worked, but how would the marketing department know? If instead I discovered my lawnmower of choice in an email blast and bought in-store, how could marketing make the connection?
The most technologically mature companies will still mess up cross-channel attribution and could delude themselves into spending on services that, in truth, won’t have an impact on sales. Expecting CMOs to omnisciently track ROI will only increase the probability of delusional spending.
Therefore, we must broaden our notion of “ROI” to include both dollars and engagement metrics. On social, for instance, video views, comments, re-tweets, pins, re-grams and other such metrics have an inherent value, even if you can’t necessarily tie them to a purchase. They still reveal a lot about the quality of a marketing campaign.
I’m not advocating that we return to the TV and radio days when measuring impressions was the only option. We are getting closer to measuring cross-channel attribution. As we consolidate from using smartphones, computers, tablets, etc. to relying on a single device that handles all research, social activity, online purchases and offline purchases (a la Apple Pay), cross-channel attribution will be more attainable. Random events, like a consumer driving by a store, will still be difficult to trace.
CMOs can’t perform well under a microscope. The pressure of delusional expectations won’t help any organization succeed. Try as we might to integrate every channel under the sun, there will still be holes, and we have to be transparent about that. It’s ok for a CMO to say, “Look, I will measure everything I can measure, but my team can’t be accountable for tracing every dollar to a sale. Trust that we’re tracking ROI as far and wide as we can, and working with other departments to do it.”
Perfect ROI tracking is a nice aspiration, but today, it is a myth. Let CMOs stress out about things they can actually accomplish.
Matt Goddard is the chief executive officer of R2integrated. He tweets @R2imatt.