By Cari Baldwin, Co-Founder & Partner, BlueBird Strategies
Marketing departments today are under pressure to justify the effectiveness of their spending and demonstrate that their programs contribute to revenue growth. Estimates of campaign results and the relation of marketing-generated leads to actual sales won’t satisfy executives who want proof of returns on their large investments in marketing.
Analytics can help marketers with these challenges. Applied to information gathered from related relevant systems, analytics reveal patterns and enable organizations to measure their performance continually, comparing past to present and forecasting the future. They are the key to constructing metrics and key performance indicators (KPIs) that guide improvement in individuals and groups, and show them where to deploy resources for the best ROI.
At this point, the use of analytics to assess marketing effectiveness is an emerging trend. Many marketing professionals want to measure the impact of their programs but are skeptical about whether software can really help. “Historically, vendors have promised more than they have delivered, but that’s changing.” said Jon Miller, VP of Marketing, Marketo.
Clearly the use of analytics is evolving, as several marketing automation vendors have added analytics to their products. Now they must make potential customers aware of their benefits and how they enhance the way marketing departments function. Part of the challenge for vendors is that to see the value of marketing analytics requires a new way of thinking. “The majority of marketing automation users are at the execution level,” said Adam Blitzer, Co-Founder and COO of Pardot. “They are more focused on getting campaigns out the door than in analyzing their effectiveness.”
To quickly bring this functionality to its users, Pardot has partnered with GoodData to provide marketing analytics capabilities, including lead funnel, campaign performance, program success. It will also include pre-built metrics and dashboards encompassing the Pardot data.
Doug Sechrist, VP of Demand Generation, Eloqua, agreed that a change in mindset is necessary. For example, when marketers have a deeper and more holistic view, they can suggest that to increase revenue, instead of simply adding more sales reps, the company should work to improve conversion rates or qualify leads more accurately. Having the right technology is indispensable, Sechrist added, but more important is a process of using the analytics to create and adjust KPIs that enable continuous improvement toward goals.
Vendors agree that providing analytics for marketing is a challenge. One problem, Miller said, is that marketing investments have “an uncertain payoff at an undetermined time in the future.” For example, the results of spending on trade shows are revealed only piecemeal over time. Without analytics to track those outcomes on a continuing basis, the investment may not seem worthwhile. Miller said Marketo’s Revenue Cycle Analytics solution provides the visibility of a prospect’s movement through the revenue cycle over time, avoiding what he calls the “tyranny of time” — or a stagnant view of measurement.
Another benefit concerns Marketing’s role in the overall organization. Not only can analytics help the marketing department demonstrate the value of its programs, they can help it gain a stronger voice in planning and decision-making. “It’s a great opportunity for marketers to assert themselves and lead their company,” Sechrist said. Eloqua’s latest release includes a robust business intelligence engine, which, he said, empowers marketers to do just that.
The inexact nature of traditional marketing approaches and their inability to quantify ROI in many cases have undermined the function’s credibility with peers and executives. When Marketing can show its contribution to revenue generation and progress in optimizing its processes and performance, it is likely to be taken seriously in both tangible and intangible ways. “Analytics help marketers earn respect from other departments and can be used as leverage to increase marketing investments over time,” Blitzer noted.
Using quantifiable metrics to track and improve performance can boost confidence not just in Marketing but also in Sales and Finance, which have stakes in the successful outcome of marketing. Forecasting will also become a hot topic related to analytics, as savvy Marketers should not only be looking backwards, but forward — and determine where to invest resources to gain the best return. It is clear that companies want more from their marketing efforts, so it will be interesting to see how well vendors can convey their messages and how quickly and widely marketing groups adopt analytics.
Cari Baldwin is a seasoned demand gen guru, recognized thought leader and frequent industry speaker on marketing automation with nearly 20 years experience. As partner and Co-Founder of BlueBird, Baldwin ensures the firm drives marketing programs that deliver measurable ROI for their clients. With a solid technology understanding of leading marketing automation solutions, her strengths include a deep focus on lead nurture content and process strategy, demand generation planning, content and offer development, scoring, program planning, management, execution and analysis.