• CMOs Remain Challenged to Prove Competitive Advantage and ROI

    Today’s buyer is more connected, empowered, demanding, skeptical and frugal than ever before. At the same time, marketing budgets are being constrained and scrutinized just as the number of channels, complexity and demands are dramatically increasing. So how are CMOs faring with these increasing challenges?

    IBM sought to find the answers as to how CMOs are addressing these new challenges, conducting face-to-face interviews with 1,734 CMOs, spanning 19 industries and 64 countries.

    CMO Challenges

    First, IBM sought to understand the challenges CMOs are facing, and most importantly which ones they were currently least prepared to address.

    The results indicated that regardless of industry and company size, most CMOs are facing the same challenges and lack of preparedness in managing them.

    Ranking high as worldwide challenges that CMOs are less prepared to handle include:

    • Social Media – ranked as second highest level of unpreparedness, with 68% reporting;
    • ROI accountability – ranked as eight highest, with 56% reporting.

    Source: IBM (N = 1,734 CMOs)

    Analyzing the results, IBM summarized the challenges into three key areas for improvement which CMOs must address in order to thrive:

    • Understand and deliver value to empowered customers;
    • Create lasting relationships with those customers;
    • Measure marketing’s contribution to the business in relevant, quantifiable terms.

    Guiding the Strategy

    In order to understand and navigate these new challenges, IBM reported that CMOs rely on a wealth of information sources and both internal and external measurements and metrics.

    To understand and drive performance, CMOs indicated that the most important marketing performance measurements include:

    • Competitive benchmarking (80%);
    • Financial metrics (68%);
    • Campaign analysis (68%);
    • Brand performance analysis (65%).

    Source: IBM (N = 1,734 CMOs)

    With marketing budgets constrained, and risk management in full effect, Frugalnomics reigns with senior executives demanding that the CMO prove the value of marketing campaigns and financially justify budgets. CMOs are under a great deal of scrutiny to prove the effectiveness and efficiency of their operations in quantifiable returns, particularly the requirement to show a positive return on investment (ROI).

    According to IBM’s survey results, 63% of respondents indicate that marketing ROI will become the most important measure of success over the next three to five years. However, only 44% of respondents currently indicate that they are prepared to manage the increasing importance of ROI accountability.

    Source: IBM (N = 1,734 CMOs)

    The Bottom-Line

    In a new world of empowered buyers and frugal senior executives, CMOs are doubly challenged to connect and engage a more complex buyer , while financially justifying campaigns and budgets to senior executives. IBM’s survey results of CMOs show that worldwide, CMOs are challenged to add value to connections and engagements with empowered customers, create lasting relationships with those customers, and quantify marketing’s contribution to the business in terms senior executives deem relevant.

    Measuring competitive advantage and proving ROI are two of important initiatives to address these challenges, helping drive campaign effectiveness to more complex buyers, while at the same time providing quantifiable proof points to senior executives, that marketing generating significant value.

    Source: From Stretched to Strengthened – Insights from the Global Chief Marketing Officer Study http://public.dhe.ibm.com/common/ssi/ecm/en/gbe03433usen/GBE03433USEN.PDF

    For more information on social media ROI and competitive benchmarking, visit the Social Benjamins Blog at: http://www.socialbenjamins.com

    Tom Pisello, The ROI Guy, and Chairman and Founder of Akonna, has been developing measurement software for ROI and economic justification for the past 20 years. Tom’s newest creation, Akonna, is an emerging Saas provider for measuring, proving and improving the ROI of marketing campaigns and social media efforts. For more information about Akonna, please visitwww.akonna.com.

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