Today’s CMO is fluent in metrics, but which metrics matter most to internal stakeholders? According to a recent Forbes Insights study conducted among global senior executives, this is a question marketers should spend more time considering.
According to the senior executives polled — 79% of whom helm companies with greater than $1 billion in revenue — CEOs are nearly 3 times more likely than CMOs to believe that marketing dollars are poorly spent. A solid 33% of CEOs strongly agreed that marketing efforts are wasting money, compared with only 12% of CMOs.
In fact, 7 out of 10 enterprise CEOs agreed (36%) or strongly agreed (33%) that their company wastes money on marketing initiatives. That’s compared with only 3 out of 10 CMOs, 22% of whom agreed and 12% strongly agreed.
What’s more, nearly double the percentage of CEOs versus CMOs reported that their company has limited insight into who is engaging with their product (74% versus 41%), and that their company does not understand consumer tastes (69% versus 37%).
Interestingly, however, despite their limited faith in the efficiency of marketing spending, CEOs were also significantly more likely to evaluate marketing performance as exceeding expectations:
“In terms of sales, CEOs are significantly more likely to view performance as exceeding expectations than are CMOs—35% vs. 26%. As for contributing to the launch of new products, CEOs are again significantly more likely to view performance as exceeding expectations than are CMOs—this time 46% vs. 26% respectively.”
So what’s the cause for this disconnect? Why do CEOs have greater faith in marketing performance, but less faith in the effectiveness of marketing spend?
For longtime marketer-turned-CEO Joe Payne, marketers’ access to real-time data is not only of pivotal importance to how marketers should evaluate their departments’ efforts. Presenting the right metrics internally is equally critical for marketers.
“The only department that ever comes to the executive meeting and reports on their activity is the marketing department,” Payne noted at our Marketing Summit earlier this year. “The CFO doesn’t come to an executive meeting and say, ‘Well, this week we sent out 75 bills, and we paid 227 bills, and we opened 35 letters.’ They come and say, ‘Our cash is this.’ That’s when they stop.”
According to Payne, marketers have been slow to bring their analytical approach into the boardroom. “When marketers go to an executive meeting, we’re like, “Well, I want to tell you all the things I did to get those results. Or if I don’t know the results yet, I want to tell you about the activity so you know what I’m doing. At the executive level, they don’t really want to hear about activity. This is really one of the biggest changes as we have more data in marketing.”
Former Eloqua CEO Joe Payne (far right) with Matt Heinz, Meghan Gill, and Joe Chernov at the 2014 TrackMaven Marketing Summit.
“We were all trained to report on activity in my day, because we didn’t have any data. We had to come tell executives about the campaign we ran, and show the thing on the screen, and all that kind of stuff. We don’t need to do that anymore. CMOs are legitimate business execs like the others. Instead of reporting our activity, we can actually report our business results.”
For more from Joe Payne and fellow industry experts on the future of marketing analytics, check out Moneyball Marketing: How To Avoid Drowning In Data.