Marketing has access to more data, but struggles to get actionable insights. Determining the right metrics requires collaboration.
Marketing has access to more data than ever, but struggles to get actionable insights. Determining the right metrics requires collaboration between marketing and finance.
More metrics don’t translate into better metrics. In fact, tracking too many KPIs can degrade an organization’s ability to identify value as the most relevant information can get buried beneath an avalanche of results. If KPIs aren’t defined and measured the same way across an organization, results will not be accurate or reliable. At the same time, if metrics only measure short-term financial impact (e.g. cost/lead, marketing spend/revenue), longer term benefits can be overlooked. The same challenge can arise from using KPIs from outside suppliers or industry groups – without an agreed-to definition and method for tracking, metrics are not comparable.
The challenge of defining accurate marketing metrics is one that many of the world’s biggest brands, such as PepsiCo and Sky, have grappled with for years. And the impact of uncertainty can be considerable. Procter and Gamble cut $200 million of digital ad spending in 2017 because it could not be certain of the validity of the metrics provided by its digital agencies and suppliers.
To make their suite of marketing metrics more effective, Chief Marketing Officers need to work collaboratively with their Chief Financial Officers to agree on a set of firm-wide marketing metrics that are relevant, insight-driven, and reliable.
To establish marketing metrics that can truly help drive an organization’s financial and business performance forward, CMOs and CFOs must work together. To learn more click here.