Marketing effectiveness rose up the corporate agenda in 2022 as record inflation, a cost of living crisis and global supply chain squeeze made making a compelling case for investment crucial.
More than half (61.2%) of the 1,610 brand-side marketers responding to Marketing Week’s exclusive Language of Effectiveness Survey say marketing effectiveness measurement has become a more prominent factor in marketing and business decisions over the past three years.
Conversion rates (51.7%) are the number one metric being studied by marketers in their effectiveness tracking, followed closely by new customer acquisition (51.1%) and click-through rates (49.1%).
Brand awareness (47.9%) was the fourth most popular metric employed by marketers to track effectiveness, followed by leads generated (46.9%) and return on investment (44.9%).
Over a third of marketers (38.2%) measure how their activity is delivering business outcomes, with 34.7% analysing campaign views. Lower down the ranking of metrics, 31.9% of respondents are actively measuring customer retention rates, 31.3% measure Net Promoter Score and 30.2% are interested in brand recall.
The tracking of return on investment increased in importance in 2022, according to 36.9% of marketers. This is followed by new customer acquisition (35.8%), conversion rates (31.7%), brand awareness (30.5%) and customer retention rates (28.3%).
Furthermore, almost half of marketers (48.4%) say ROI is the most important metric for their CEO, CFO and board members, followed by delivering business outcomes (39.9%) and new customer acquisition (35.8%).
However, the survey revealed a tension between the effectiveness measures marketers value and those high on the agenda for business leaders. Close to half (45.7%) of marketers feel their brand is too focused on ROI and despite understanding the importance of the metric for their CEO, only 28.4% of marketers always measure the return on investment of their campaigns.
In fact, most marketers (71.8%) agree their company needs to expand its marketing effectiveness capabilities, while 6.9% work for a company that does not conduct any form of marketing effectiveness analysis at all.
When it comes to who is receiving the results, gaps may need to be filled in 2023. According to the research, less than a third (31%) of marketers share effectiveness analysis with the chairman or CEO, while just 20% present the results to board members.
Worryingly, 18.6% of marketers strongly agree marketing effectiveness is not a defined role and rarely a priority within their business, with analysis performed on an ad-hoc basis with limited accountability for results.
In a wider sense, there is the fundamental issue of meaningful effectiveness to be tackled. As Marketing Week columnist Tom Roach wrote in October, ROAS (return on ad spend) is commonly used by digital marketers as a buying objective in the real-time optimisation of performance marketing.
ROAS is typically calculated using digital attribution, which Roach warned can vary from platform to platform and could be contributing to short-termism, under-investment, deprioritising longer-lasting activity and stifled growth.
While it is encouraging to see marketing effectiveness climbing the corporate agenda, issues must be addressed in 2023. For starters, marketers will need to tackle the disconnect between the metrics that matter to them and those of importance to the CEO, especially in a year when marketing budgets will be scrutinised like never before.
Moreover, marketers will need to consider who in the business needs to see the analysis and how well defined the effectiveness role is within their organisation. The ability not to slip into a short-term mindset will be key to thriving in 2023, as marketers will need to rely on effectiveness to make the business case for investment.