No one in the C-suite except the CMO cares about marketing vanity metrics such as reach, impressions, likes, shares, followers or anything else that isn’t directly tied to the performance of the business. Instead, they care about clear measures that show progress against specific, measurable problems and ROI.
Companies are striving to cut costs and operate more efficiently, leaving marketing budgets in a state of flux and instability. With 75% of CMOs feeling heightened pressure to “do more with less,” tangible outcomes that directly impact the bottom line are the only meaningful indicators of marketing’s effectiveness.
Traffic, check growth, sales and market-share shifts can effectively be demonstrated and understood as impactful to everyone in the organization. They provide concrete evidence of marketing’s contributions to the business’s financial success, especially during a down economy.
Marketing is an investment, not an expense
As CMO, the only way to protect our teams, budget and brand is by putting “points on the board” that the CFO understands and can endorse. Demonstrating changes in real business trends influenced by marketing – like in-store traffic and sales trends vs. a control – can show your CFO and C-suite that marketing is an investment, not an expense.
Here are four crucial steps to ensure your marketing organization focuses on the right KPIs.
- Drop the BS from your dashboard. Whittle down to things that those in operations and those who run P&Ls understand. Use marketing metrics such as reach, likes and impressions only as leading indicators that tactics are working. When reporting to those tracking actual business revenue, stick with traffic, sales, check growth or other tangibles.
- Fix the trend. Focus on changes in trends vs. raw numbers. Showcase real business results that are measurable and impactful. Week-to-week sales can be deceiving, as seasonality, market differences and even external factors like weather can have a huge impact.
You’re trying to improve your trend and forecast how a program will impact the overall business with those meaningful metrics, not hold up the biggest number. Metrics like visitation, sales growth and market share shifts are true indicators of marketing’s effectiveness.
- Don’t take your media partners’ word for it. Avoid solely relying on the dashboards your media partners provide. Find out how your marketing correlates to real changes in the business that the rest of your organization measures. Use your media partner’s data as a leading indicator of what creative or tactics work, but not as a way to report on the impact of a program.
- Start with performance to build trust, then move to brand. Build trust that marketing can impact real business results before you move to larger brand-building initiatives. Brand is important, but it’s hard to sell in brand-building initiatives until the organization understands your motivation is the same as theirs: to grow the business.
Spending on brand building is predicted to slow (11.7% budget increase in Feb. 2022 vs. only 5.5% today). Almost all effective media plans have both performance and brand, anyway. Just start with what will align the organization to marketing. For example, starting with a cost-per-visit media model will let you show incremental traffic for every media dollar spent.
The bottom line
As members of the executive leadership team, CMOs need to consider themselves investors in the business that drives meaningful growth – not stewards of big media budgets. Simply put, drop the vanity metrics. Don’t focus on the biggest number.
Instead, focus on what will grow buy-in of marketing and drive the business. After all, whether you are the CMO, CEO, CRO or CFO, success is ultimately measured by your ability to generate real progress and performance that leads to real business results.
“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
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