This 2014 study from Duke University is a bit dated now — a lot can happen in five years — but the numbers are still sobering.
In this most recent survey, 37% of CMOs reported that they?re able to prove the short-term impact of marketing spending quantitatively, while 44% have a good qualitative sense, but not a quantitative one. That leaves about 1 in 5 unable to show the impact yet at all. In comparison to the February survey, there has been no change in the ability for CMOs to quantitatively prove their short-term impact, while there?s been an increase in the percentage unable to measure it at all.
Think about that a bit. Just a few years ago, only a minority of people holding the Chief Marketing Officer title could actually measure in a quantitative sense how their marketing budget was contributing to their business’s viability. Allowing for vague qualitative factors, the numbers aren’t overwhelmingly good at the other end, either, since at least 20 per cent can’t measure ANY value in their marketing.
Ugh, but I think I can understand why. Even with rational efforts to build in systems to do it right, measuring isn’t easy — and defining measurements that really are valid is even harder.
I’m facing these issues for the first time in 30 years in business, because until now, while we’ve provided services for marketers, we’ve never actually spent a significant amount of money on marketing.
This is rational. As media publishers, our product essentially becomes our primary marketing vehicle. As well, other marketing services are often willing to engage in non-cash trade-outs; so we give some advertising in exchange for trade show booth space.
But Ontarioconstructionnews.com is a different challenge. We need to reach a specific audience (general contractors and built-industry trades engaged in direct relationships with owners — in other words they aren’t sub-contractors) completing projects in Ontario. These businesses need to publish a Certificate of Substantial Performance (CSP) under the Ontario Construction Act to recover their 10 per cent construction lien hold backs from their owner/clients.
This is a finite and highly specific market, and it should be easy to measure results directly. I have much information at my disposal, including the market base’s names/addresses and the exact market size. And I can clearly track if an order has come from our marketing — because it couldn’t happen any other way (unless it is a repeat client, of which fortunately we are acquiring many.)
Sounds easy, and in some respects it is — I can certainly determine our market share and I have a general idea of where we are finding our clients. But (and this is the challenge) we do not have reliable break-downs about which of our marketing campaigns and initiatives are generating the actual orders, and so (at least at present) we are not properly tracking our cost/ROI on the initiatives.
Why is that?
Well, even though we have tracking tools, we haven’t been diligent in truly surveying our clients on from where they’ve learned about our business. Google AdWords, for example, can track some conversions in that we can tell how many of the people who clicked on the ads downloaded the relevant form (the final stage before an order) but we cannot yet determine how well that action leads to actual orders.
I’m sure we can fix these things — perhaps with a simple change to our initial advertising order where the new client can check a “how he learned about us” box. And, yes, I can do a macro assessment of our ROI – by adding our total marketing expense and comparing it to our market share. I know we aren’t blowing our brains out and the marketing is ultimately proving successful, especially since the lifetime value of new clients is turning out to be much higher than I originally anticipated.
But if we are having challenges with a simple and at least theoretically highly measurable marketing circumstance, how can you handle the longer-cycle and multivariate challenges for most AEC businesses, where the sales cycle is incredibly long and the small sample size could make statistical interpretation ineffective?
There are answers, such as tools associating go/no go decisions with calculations of preparation/RFP presentation costs against “hit rates” or success in winning jobs (which can then be further refined based on the jobs’ actual profitability.
But if you want to say this sort of thing is easy to do, I’ll call you out as a fibber since we aren’t finding it easy even on a simple and straightforward marketing measuring challenge.