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Over the past few years, analytic CRM and marketing applications have been among the most active and fast growing areas within CRM. We saw that trend continuing in 2005.
Perhaps the biggest story in the marketing side of things is the continuing pressure on senior marketing executives to become more accountable for marketing spending. For 280 senior marketing executives surveyed by Forrester Consulting for a Unica-sponsored study in 2004 (Marketing Challenges Benchmark Survey of Senior Marketers), the primary challenge was measuring marketing effectiveness.
However, only 20 percent had formal marketing measurements in place, and 80 percent were "dissatisfied with their ability to demonstrate their marketing programs' business value and impact." Marketing ROI became an oft-repeated mantra of the conference-going set, with numerous organizations ranging from CMO Magazine and the CMO Council to the Institute for International Research hosting seminars and conferences in this area. The Wharton School of Business has a special seminar on linking marketing and financial metrics. Almost half of our clients at Quaero are planning, building and using marketing dashboards to help improve measurability and accountability.
Currently they tend to be large firms in industries that spend a great deal of money on marketing, such as financial services, pharma, high technology, automotive and telecom, but as the concept and the technology matures, we see a much broader embrace coming. If these dashboards are designed properly, they permit marketers to track the results of marketing campaigns on an ongoing basis (weekly or daily) as well as allow senior executives in marketing, finance and operations to look at the big picture, across campaigns and channels and analyze the impact on revenues and the bottom line.
However, while ROI seems to be all the rage today, the backlash and reaction are probably not too far behind. ROI is nice as a final measure, but the value often comes from measuring factors that drive ROI, because that is where you can make changes and improvements. We are not convinced that companies are paying enough attention to these intermediate, causal measures. Marketing has always sought a balance between short-term impact that can be achieved through promotions and direct marketing versus the longer term impact that comes from building brand awareness and equity. Too much of this ROI bandwagon seems to be driven by short-term considerations that may, if wrongly applied, do damage to long-term brand and customer building.
In conjunction with the increased focus on accountability, we are also seeing more emphasis on making the technology behind the dashboard more dynamic and easier to use. Emerging software tools from companies such as Endeca and Spotfire are easier for executives to use than traditional business intelligence tools that are often used as the front end for marketing dashboards. This ease of use comes from their heritage as search engines rather than analytic tools. In addition, some of these tools also have the added advantage of being able to sift through non-structured data, such as text information, because of their heritage in the world of online search.
Marketing Resource Management applications are making it easier for marketers to gather all of their planning and execution data within one system as well as manage complex processes and handoffs more efficiently. This is the first step toward accountability, i.e. figuring out where the money is going. Dashboards, of course, help to round off the other end by helping quantify the business impact of that spending.
The world of marketing automation and analysis will be challenged to keep up with these developments in what promises to be another exciting year. We are anticipating broader, deeper and better-informed approaches to marketing accountability that balance the long-term and short-term considerations as well as balancing internal challenges such as those of process, technology and organization and external challenges of meeting customer and competitive needs.
By Naras V. Eechambadi, Ph.D., Quaero
Over the past few years, analytic CRM and marketing applications have been among the most active and fast growing areas within CRM. We saw that trend continuing in 2005.
Perhaps the biggest story in the marketing side of things is the continuing pressure on senior marketing executives to become more accountable for marketing spending. For 280 senior marketing executives surveyed by Forrester Consulting for a Unica-sponsored study in 2004 (Marketing Challenges Benchmark Survey of Senior Marketers), the primary challenge was measuring marketing effectiveness.
However, only 20 percent had formal marketing measurements in place, and 80 percent were "dissatisfied with their ability to demonstrate their marketing programs' business value and impact." Marketing ROI became an oft-repeated mantra of the conference-going set, with numerous organizations ranging from CMO Magazine and the CMO Council to the Institute for International Research hosting seminars and conferences in this area. The Wharton School of Business has a special seminar on linking marketing and financial metrics. Almost half of our clients at Quaero are planning, building and using marketing dashboards to help improve measurability and accountability.
Currently they tend to be large firms in industries that spend a great deal of money on marketing, such as financial services, pharma, high technology, automotive and telecom, but as the concept and the technology matures, we see a much broader embrace coming. If these dashboards are designed properly, they permit marketers to track the results of marketing campaigns on an ongoing basis (weekly or daily) as well as allow senior executives in marketing, finance and operations to look at the big picture, across campaigns and channels and analyze the impact on revenues and the bottom line.
However, while ROI seems to be all the rage today, the backlash and reaction are probably not too far behind. ROI is nice as a final measure, but the value often comes from measuring factors that drive ROI, because that is where you can make changes and improvements. We are not convinced that companies are paying enough attention to these intermediate, causal measures. Marketing has always sought a balance between short-term impact that can be achieved through promotions and direct marketing versus the longer term impact that comes from building brand awareness and equity. Too much of this ROI bandwagon seems to be driven by short-term considerations that may, if wrongly applied, do damage to long-term brand and customer building.
In conjunction with the increased focus on accountability, we are also seeing more emphasis on making the technology behind the dashboard more dynamic and easier to use. Emerging software tools from companies such as Endeca and Spotfire are easier for executives to use than traditional business intelligence tools that are often used as the front end for marketing dashboards. This ease of use comes from their heritage as search engines rather than analytic tools. In addition, some of these tools also have the added advantage of being able to sift through non-structured data, such as text information, because of their heritage in the world of online search.
Marketing Resource Management applications are making it easier for marketers to gather all of their planning and execution data within one system as well as manage complex processes and handoffs more efficiently. This is the first step toward accountability, i.e. figuring out where the money is going. Dashboards, of course, help to round off the other end by helping quantify the business impact of that spending.
The world of marketing automation and analysis will be challenged to keep up with these developments in what promises to be another exciting year. We are anticipating broader, deeper and better-informed approaches to marketing accountability that balance the long-term and short-term considerations as well as balancing internal challenges such as those of process, technology and organization and external challenges of meeting customer and competitive needs.
Naras Eechambadi is the CEO of Quaero , a marketing and technology services company that helps companies looking to improve the effectiveness of their marketing efforts and marketing technology investments. He is the author of High Performance Marketing: Bringing Method to the Madness of Marketing (Kaplan Professional Press, 2005).
