Survey by Marketing Management Analytics and Financial Executives International Shows Low Level of Confidence in Marketing Forecasts
Wilton, CT, March 13, 2007 – Despite marketing’s drive toward financial accountability, only 7% of senior-level financial executives surveyed report being satisfied with their company’s ability to measure marketing ROI, according to new survey findings released today by Marketing Management Analytics (MMA) and Financial Executives International (FEI). MMA, an innovator in marketing mix modeling, is an independent operating unit of Carat, one of the world’s leading media services companies.
The nationwide survey, conducted in November 2006, also found that only one in 10 senior-level financial executives report confidence in marketing’s ability to forecast its impact on sales. The study surveyed 150 members of FEI, a worldwide association of senior corporate financial executives.
“Marketing needs to stop fostering ‘rock star’ behavior, and focus on rock-steady results,” said Ed See, Chief Operating Officer of MMA. “Our survey shows that marketing accountability falls short of the expectations of the C suite, and most financial executives can’t get visibility into how well marketing is driving sales.”
In contrast to the low level of satisfaction among financial executives, an April 2006 survey of senior-level marketers by MMA and the Association of National Advertisers (ANA) found that nearly one-fourth (23%) of the marketers surveyed were satisfied with their company’s ability to measure ROI. It also showed that a quarter of the marketers surveyed felt confident that they could forecast marketing’s impact on sales.
“While marketing has made progress in measurement, many marketers are still not focusing on ROI,” said See. “The fiduciary responsibility of marketers must match that of the rest of the executive suite. They need to be able to express their impact in dollars returned for dollars invested.”
The FEI survey also showed that less than 20% of financial executives surveyed indicated they have full cooperation and an open dialogue with marketing in order to establish metrics. Additionally, less than 10% indicated their company had a separate budget allocated for measuring marketing effectiveness.
“Many organizations treat marketing measurement as an expense, rather than a control, and that’s the root of the problem,” said See. “However, given the ever growing amount of marketing spend, that is beginning to change. As CMOs with operational (rather than advertising backgrounds) take charge, they are bringing accountability into the marketing organization.”
Attitudes of financial executives also lagged behind marketing executives when it comes to forecasting. While one-third of marketers in the MMA-ANA survey agreed they could forecast the impact on sales of a 10% budget cut, only 16% of financial service executives agreed with the same statement.
“While we saw gaps between the financial executives and marketing executives in many areas, there were also some areas that everyone seemed to struggle with,” said See, who noted that gaining agreement of a definition on ROI and having a separate budget allocated for marketing measurement received similarly low scores in both studies. “For many companies, marketing and marketing measurement are the least-managed areas in corporate spending.”
About Marketing Management Analytics
MMA pioneered the use of marketing mix modeling to help companies plan, measure, validate, and optimize their marketing performance. Since that time, MMA has conducted more than 1,000 studies on hundreds of brands and businesses in more than 20 countries. MMA’s clients include many of the most recognized marketers in the world. MMA has been a unit of Aegis Group, PLC, London (AGS.L) since 1997. For more information about other MMA services, visit http://www.mma.com
