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Study: Most Tech Marketers Don't Measure ROI

Few technology marketers have formal systems to measure marketing performance and return on investment even though corporate marketing budgets are rebounding, a new study found.

The study, to be announced today by the Chief Marketing Officer Council in Palo Alto, CA, found that more than 80 percent of respondents lacked formal marketing performance measurement systems. This is despite spending as much as 25 percent of their revenue on marketing.

In another finding, nearly 80 percent of the senior marketing executives surveyed said they were dissatisfied with their ability to demonstrate their marketing programs' business value and impact.

“Technology marketing is very action-oriented, so, in general, when technology marketers are spending money and exerting effort using their people resources, they tend to focus on things that drive immediate results,” said Carol Meyers, vice president of marketing at Unica Corp., a Waltham, MA, marketing software firm that is one of the study sponsors.

“I think that attitude is the result of two things: Wall Street expectations and an orientation toward supporting the sales. And measurement is a little bit more of a long-term thing — you measure so that you can identify what's working or not to correct your future programs.”

The findings were published in the CMO Council's Measures + Metrics Audit — Assessing Marketing Value and Impact study. The study will be released at an executive conference June 9 in New York. BusinessWeek magazine is the host.

The CMO Council polled 319 marketing vice presidents and higher-ranking executives from leading technology firms worldwide. The council counts as members tech companies like Cisco Systems, Hewlett-Packard Co., AT&T Corp., Sony Electronics, Yahoo, Sun, eBay Inc., Apple Computer Corp., Microsoft Corp., Adobe and Intel. Polling was done in the first quarter.

A deeper look into the study revealed other findings. Nearly 90 percent of respondents think measuring marketing performance is a top priority for technology firms. The larger the company, the more the priority.

Still, 70 percent said they spend less than 2 percent of their marketing dollars on measuring performance. However, nearly 60 percent of them aim to boost spending in this area in the next few years.

The measurements most frequently reported to management are qualified leads generated, feedback from sales and channel groups, revenue impact and Web site traffic and content viewing.

Measures rated least frequently as performance indicators were stock price, share of mind, brand equity and Wall Street perceptions.

Among the hardest-to-measure activities were results from advertising, sales, branding and marketing collateral, the study claimed. Easiest to measure were results from direct mail and e-mail campaigns, Web site and Internet search engine marketing, telemarketing and contact management programs.

High on the list of weaknesses in performance measurement analytics were performance tracking for individual countries, automated report generation across all functions and information drill-downs on each program. Other weak spots were competitive benchmarking and executive dashboards of key performance indicators.

“It's not been a priority, it's never been mandated,” said Donovan Neale-May, executive director of the CMO Council and managing director of marketing communications firms Global Fluency and Neale-May & Partners. “The pressure is on now to change that. Most marketers have got to really strengthen their business analytics and look at the overarching strategic contributions and value of marketing or else the marketing spend levels will continue to be challenged and questioned.”

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