New Research from Allocadia Finds Only 21% of Companies Able to Fully Measure Marketing’s Contribution to Revenue; High-Growth Firms 3X More

January 10, 2017

New original research reveals the industry’s maturity level of Marketing Performance Management

Allocadia, leaders in Marketing Performance Management (MPM), today announced the availability of the Allocadia 2017 Marketing Performance Management Benchmark Maturity Study. This new original research reveals how companies run the business of marketing today, and serves as a benchmark for organizations to compare against. The results of this research will be analyzed in a live webinar on Wednesday, January 31st at 10:00am PST / 1:00pm EST – registration is free.

The study of over 200+ organizations was led by Allocadia VP of Marketing Sam Melnick, a former award-winning analyst in the CMO Advisory practice of research firm International Data Corporation (IDC). “Our study revealed companies who are excelling at managing performance expect their marketing budgets to increase,” said Melnick, “see significant revenue growth of at least 10% year over year, and have a higher confidence in their return on marketing investment than the average marketing department. As CMOs are tasked with more responsibility, having stewardship over their investments and making MPM a strategic mandate is critical for marketers who want to prove their impact on the business.”

Companies Must Prioritize Marketing Performance Management

The report reveals a major challenge among organizations to effectively align their marketing investments to revenue. In the study, only 21% of companies are able to point all measurements to marketing’s contribution to revenue. In addition, only 6% of companies feel that their measurements help determine the next best marketing action. This is likely due in part to the use of spreadsheets to manage insights, as 82% of marketing departments use Excel for critical business functions including planning, investment management, and measurements (core components of MPM.)

“We are seeing a dynamic expansion in the role of marketing operations to drive efficiency and effectiveness across marketing,” says Debbie Qaqish, Chief Strategy Officer of the Pedowitz Group. “In essence, the job description of the marketing operations leader has become marketing performance management and their job is now essential to marketing success in delivering results. Responding to this market shift, Allocadia has produced the first ever empirical research on the four traits of leaders responsible for marketing performance management. This benchmark report is a must read for every marketing operations organization looking to build an effective marketing performance management practice.”

Marketing and Finance as Strategic Partners is Critical, but Overlooked

According to the study, high-growth organizations are 3X more likely to align Marketing with Finance, but only 14% of companies in the study saw Finance as a trusted, strategic partner. 28% of companies surveyed either have no relationship with this function, or speak only when forced to.
Companies who are able to bridge the gap between the CMO and CFO report revenue growth of over 25% (or more). 61% of companies expecting 25%+ growth report consistent alignment with finance on the measurement of budgets and returns. Those expecting flat to negative growth report the same only 27% of the time.

Mature MPM Organizations Collaborate to Create Action-Oriented Data

The study found that internal alignment regarding measurement is key to success, as 80% of organizations with flat or negative growth have no agreed-upon measurement approach, or are only capable of baseline measurements.
In contrast, mature MPM leaders ensure marketing is in lock-step with company objectives, as high-growth organizations in the study report that they are 2X more likely to align marketing KPIs directly to contribution to the business than those with negative to flat growth (65% compared to 33%).

Thoughtful Approach to Marketing Technology Drives Growth

The role of technology is paramount to a CMO today. This research found that high-growth organizations leverage Marketing Performance Management software 3.5X more often than static or negative-growth organizations.
In addition, companies who consistently integrate technology across their entire marketing organization are 5X as likely to see 25%+ revenue growth than those with flat or negative growth (57% vs. 13%). What’s more, 70% of companies that expect revenue increases have good or excellent clarity of their marketing technology roadmap, versus 27% of those with flat to negative growth expectations.

Data Quality is Limiting Marketing Decision Making

More than 55% of companies in the study report they can only run baseline reports on past marketing performance, with 13% of those reporting they don’t even know where all their data lives and can’t run any reports.
In another indication of struggle, only 8% of organizations have marketing, sales and finance data in one data warehouse that acts as a “single source of truth.” and only 28% feel marketing’s data is accounted for and well formatted (this includes that initial 8%). It’s no surprise, then, that almost 50% of organizations report not having control of their data.

How This Study Was Conducted

Allocadia, in partnership with market research firm Researchscape, surveyed over 200 respondents using an online study fielded in the fall of 2016. The study analyzed 13 different industries, both B2B and B2C organizations, at companies of all sizes, from under $20M to over $2.5B. Respondents were located primarily in North America, with some responses from European organizations.

This study was aligned with Allocadia’s Essential Framework for Optimizing Marketing Performance, a maturity model that provides context for understanding these results. For companies who wish to benchmark themselves against these results, Allocadia has provided a complimentary Marketing Performance Management Benchmark Assessment.

To join a free, live analysis of these findings, register for a live webinar on Wednesday, January 31st at 10:00am PST / 1:00pm EST – registration is free.

About Allocadia

Allocadia empowers marketers to run marketing more effectively by providing them with greater control over their marketing investments and the insights they need to drive revenue. The recognized leader in Marketing Performance Management (MPM), Allocadia serves more than 150 customers and thousands of users worldwide, and manages billions of marketing dollars for companies like Microsoft, Juniper Networks, VMware, Red Hat and Charles Schwab.

Contact
Katie Martell, Allocadia
Katie.Martell@allocadia.com
(978) 216-2588

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