A new survey of 220 marketing leaders by executive talent firm Korn Ferry found half of those surveyed cannot make a direct correlation between their marketing efforts and the company’s financial performance.
“Today’s marketers have more data and analytics than ever before, so it would seem they should be able to tie their efforts directly to the profitability of the organization,” said Korn Ferry’s Caren Fleit. “Unfortunately, many measure the effectiveness of initiatives only in terms of marketing metrics and miss the opportunity to connect it to overall business performance as measured in terms of sales and profit, among other factors.”
The survey pointed to the need for a better understanding between CEO and CMO around the role of marketing in the organization. CEOs too often failed to grasp the complexity of brand building or the importance of a customer-centric approach, according to survey respondents.
“CEOs need to position marketing as a key business driver rather than a cost center and ensure they have a CMO that can embody that role,” said Fleit.
Only 17 percent of respondents said an increased budget would make them more effective at their jobs.
Meanwhile, 84 percent said finding the right talent to help with digital transformation, including data science, digital technology, content creation, and social community management, was critical to their job success.
A lack of alignment between the marketing function and the rest of the C-suite is a perennial issue for companies.
According to Christine Moorman at Duke University’s Fuqua School of Business, companies remain overly focused on developing “digital marketing strategies” to the detriment of building a “digital marketing organization.”
Recent research from Gartner pointed to a modest contraction in marketing budgets at larger organizations compared with the previous year, from 12.1 percent of annual revenue in 2016 to 11.3 percent in 2017.
This comes at a time when marketing is increasingly tasked with much more than simply brand building and demand generation.
More than a century ago, American businessman John Wanamaker said he knew that half of his marketing spend didn’t work but didn’t know which half. Little did he suspect his question would remain unanswered today.