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Measure Your Digital Marketing Roi, Keep Your Job
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CHICAGO -- This is the year click-throughs and other "vanity metrics" that marketing teams use to "prove" digital marketing ROI will be thrown away. Instead, spending on customer outreach -- and investments in the martech stack used to enable them -- will be directly tied to revenue.
So said Shashi Seth, Oracle's marketing cloud senior vice president, across several sessions, including a keynote at the Modern Customer ExperienceCRM user conference, en route to announcing new data analysis tech to help businesses find that holy grail linking marketing spend to bottom-line revenue. That long-sought-after digital marketing ROI metric has been nearly unmanageable to measure before the presentage of big data collection and AI tools to examine through it.
"2008, for many of you -- if you're old enough to remember -- was anoceanic change for ad tech. For the first time it became attentive on performance," Seth said in his keynote. "2018 is going to be the year for martech. We are going to be obligated to revenue."
Some customers presentat the conference acknowledged the idea, saying that the cost and capabilities of new martech tools, coupled with heavier digital rivalry from competitors, makes digital marketing ROI anessential metric to define how much firepower to buy in order to win market share.
Others, nonetheless, weren't so sure, saying that the tech might be ready, but their companies aren't. Or in some cases, maybe they aren't philosophically associated with the idea that marketing teams should be held to direct-revenue objectives.
Some feel need for martech ROI
Bigger companies are feeling it. Alice Dungey, senior technology and operations manager at Southwest Airlines, runs the enterprise's Rapid Rewards loyalty program. Southwest has been binding marketing to revenue for awhile, she said.
Marketing can impact revenue noticeably in the heated airline market, filling seats by endorsing reduced-fare sales to customers and stealing them from other airlines' frequent-flyer programs. Another way is geography-specific digital campaigns, such as one recent initiative to inspire Californians to earn companion passes -- free tickets Southwest gives away when definite mileage thresholds are met.
"With every marketing campaign and every sale that we have, we have set objectives," Dungey said. "We set those objectives; we know exactly what the markets are that we're looking at that we want to drive that sale. At the end, like everybody else, we assess -- how did we do?"
In Albuquerque, the metrics aren't revenue, but the city still measures digital marketing ROI, as it is accountable to citizens for the use of tax dollars. Digital engagement expert Matthew Maez, who was also at the session, said that click-throughs and opened emails are indeed timeworn ways of assessing marketing success.
His team is trying to automate the answering of simple questions from residents in order to devote more bandwidth to the more complicated issues from those who most need help. That, and driving awareness and utilization of services through digital campaigns, is where his team's success metrics lie.
"Our ROI is value to the people and the capability to develop outcomes," Maez said. "Are we getting more children into early childhood education programs because we built a more effective marketing strategy? Or are we reducing our city's carbon footprint by creating digital tools to make transit options more accessible or reliable?"
Others not so sure martech should be accountable
Not everyone buys into the notion that there will be a sea change this year involving companies holding their marketers accountable for revenue performance.
"We're in the first half of 2018, and we're talking about how this is going to be the big thing in 2018?" Matseshe-Crawford said. "We don't know yet."
Smaller companies -- with smaller marketing budgets, smaller data sets and less bandwidth for adopting new AI tools -- will lag behind, up to five years or more, said Jim Giordano, vice president and CIO of Latham Pool Products. His company, which deals with a smaller universe of pool cover distributors, has far fewer resources at its disposal than a Southwest or Fanatics.
"Bigger players have more of the Google Analytics and more of the tools that can track this kind of thing," Giordano said. "Our market is not there yet."
Glenn Coles, CIO at Yamaha Motor Corporation, North America, said “while I don't see it yet either, technology that can connect marketing dollars to revenue is coming”. Although he offers a caveat: He believes it can never be a "nirvana state" with clear dollar-for-dollar measurements, but it will be a lot more precise than it is today thanks to cloud technologies, digital transformations creating the data sets, and the rapid advancement of Artificial Intelligence (AI) tools. "My senses are that in the next 18 months it might be true, just because of how fast things are moving."
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