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Unsolved Marketing Mysteries

Unsolved Marketing Mysteries

Just because the Energizer Bunny is widely recognized (and “beloved” according to Energizer’s website), doesn’t necessarily mean that consumers are more likely to buy Energizer batteries. Figuring out which marketing messages actually translate into sales and revenues is the Holy Grail of marketers. Some marketers in search of data are turning to what are called marketing automation technologies, which analyze data from various sources such as CRM systems, point-of-sale systems and other databases.

A recent report shows that measuring multimedia campaigns and the associated sales impact are the top challenges of marketers today. The survey of 113 members of the Association of National Advertisers (conducted by Cambridge, Mass.-based Forrester Research) found that 59 percent of respondents considered themselves “very” or “somewhat” aggressive in the use of marketing automation technologies.

Jim Nail, Forrester analyst, says theories about marketing exposure as it relates to sales and revenues are muddied by lack of real data. “There’s no direct linkage between that marketing stimulus and the consumers’ reaction,” Nail says.

According to the report, technology companies have established themselves as the most aggressive users of this technology, followed by the health care and pharmaceutical industries—a finding that Nail wasn’t expecting.

“That was a surprise,” Nail says. “Certainly as they are doing more direct-to-consumer advertising, they’re trying very hard to create that link between advertising and sales.”

Just 43 percent of consumer packaged goods (CPG) companies reported they were using marketing technology aggressively. Nail says that while CPG companies lag behind in direct marketing, or closed-loop measurement, they are pioneering a technique called correlative measurement, which tries to quantify the delayed impact of an ad by tracking ad data with online promotions, loyalty programs and so on.

Spending plans showed what Nail called a “classic divide” between the early adopters and non-adopters. Nearly half (47 percent) of respondents said they planned to spend more than $750,000 on marketing software and technology in 2002, while 40 percent expected to spend less than $250,000. “Some companies, due to their culture or who their leaders are, understand, and they try to incorporate the benefits of technology in their operation and they’re willing to take some sort of risk,” Nail says. “Others wait and copy what they do.”

Although 61 percent of respondents said they would spend more on marketing technology in 2003 versus 2002, there is concern over return on investment, which could affect their spending plans. More than two-thirds of respondents said uncertain ROI metrics were preventing them from making marketing investments. “Clearly, in this kind of environment, nobody wants to spend any money unless they are 100 percent certain they are going to get a return,” Nail says. “Even the market leaders meet internal resistance.”

When implementing new technology, the survey found that CIOs and IT managers tended to take a back seat to chief marketing officers and marketing managers. While 36 percent of respondents indicated that authority over the purchase and use of marketing technologies was shared by both IT and marketing departments, just 22 percent of IT executives and managers called the shots on marketing investments, leaving the remaining decisions in the hands of marketing officers (37 percent) and CEOs (5 percent).

“The CIOs install all the plumbing, but they don’t have a very good understanding of the marketing process, which data marketers use and how they use it,” Nail says. “Marketers are not terribly knowledgeable about technology. It’s really a partnership where marketing and IT have to sit down together and somehow meet in the middle. The CIO alone can’t do this and a CMO alone can’t do this.”

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