Shennandoah Goodson Director
Shennandoah has over 20 years of experience helping small to midsize firms in construction, technology, finance, publishing and other industries accelerate growth by...
For any investment an organization makes, leaders want to see a return. Yet even as marketing and technology evolve and become more robust and sophisticated, many marketing leaders still struggle to demonstrate marketing ROI. Many marketing professionals argue that it is difficult if not impossible to demonstrate ROI for marketing dollars. Though there are some challenges to drawing a line between marketing dollars invested and returns realized, it is not impossible, and even more important it is necessary to the vitality of the organization and the role of marketing for marketing professionals to demonstrate marketing ROI.
Below is an exploration of the challenges in demonstrating Marketing ROI and how they can be addressed.
Even with the advent of the internet, social media, CRMs, and other marketing technologies, it is still rather difficult to draw a direct line of causation from the dollars invested in a marketing tactics or campaigns and revenue realized for the organization. This is especially true for those marketing activities that occur offline without the advantage of online based tracking methods like traceable links. Unfortunately, few marketing professionals are ever taught how to draw connections between direct investment and correlated results.
Another reason why it is a struggle to demonstrate marketing ROI is the fact that marketing occurs in a variety of ways, both online and offline. Because the numerous channels employed by marketing don’t communicate with each other, it creates a tremendous amount of extra work for marketing departments to effectively track and report. Even if marketing is able to get accurate and efficient reports from the different channels, they still are faced with creating a single, easy to read, visual representation that speaks to leaders.
To properly demonstrate return, marketing has to make the connection from marketing dollars spent to metrics that matter to the organization as a whole. Unfortunately, those metrics often aren’t disclosed, or marketing doesn’t understand them well enough to demonstrate a relationship between marketing efforts and organizational goals. This is especially true in organizations that are heavily siloed and that view marketing as expendable “overhead.” The lines of communication required to convey critical strategic information are broken or closed, making it difficult for marketing to position themselves as strategic partners within the organization.
Although its isn’t as easy to demonstrate marketing ROI as it is for other areas of the business, it is not only possible, it is critical. Marketing has a major role to play in attracting new customers, retaining existing customers, and even in securing and maintaining talent. The more marketing can demonstrate return for their efforts, the more their value will be seen and understood by leadership and the organization as a whole.