ROI top effectiveness metric demanded by C-suite

ROI is considered by marketers to be the key metric demanded by the CEO, CFO and other senior stakeholders to prove marketing effectiveness.

More than two-thirds (41.6%) of the more than 1,300 brand-side marketers who completed Marketing Week’s second annual Language of Effectiveness survey, supported by Kantar, say ROI is the most important consideration for the boardroom.

This is a drop from 48.4% last year but still represents by far the most important metric marketers believe the board want to see.

The weight given to ROI does differ depending on company size, though. More than half (52.5%) of marketers at larger businesses (those with more than 250 employees) say ROI is key, this drops to 29.7% among small businesses. It is also not the most important metric for senior stakeholders at SMEs, with marketers small firms suggesting new customer acquisition (32.3%) is the most important metric to the board.

It’s a similar story when comparing B2C and B2B, with consumer companies (41.8%) more likely to consider ROI the most important metric than those targeting businesses (36.9%). New customer acquisition is also more important than ROI at B2B firms (40.4%).

Across the full sample, new customer acquisition (36.1%) is the second most important metric, while delivering business outcomes (35.4%) comes third, suggesting those at the top table see immediate economic returns as key to any financial investment.

Other metrics which marketers suggest the C-suite rate highly include conversion rates (26.5%), brand awareness (21%), customer retention rates (16.9%) and customer lifetime value (15.4%) – all more performance-related metrics. Less than 10% of senior stakeholders are deemed to consider brand attributes a valuable tool to consider the success of a marketing campaign with it coming a lowly 11th out of 14 attributes.

Money talks

Perhaps it is no surprise, then, that 48.1% of marketers believe their company is too focused on ROI when it comes to examining effectiveness, a slight increase on the 45.7% who reported the same last year, and significantly more than the 23.7% of marketers who believe the opposite.

It is this laser focus on ROI that Premier Foods CMO, Yilmaz Erceyes, warned could lead to a dilution of brand equity that may “transpire into a performance problem in the mid- to long-term”. This is a viewpoint shared by Les Binet, head of effectiveness at Adam&eveDDB, who stated in October that if you “optimise ROI you will destroy your business”.

There may be some comfort, however, that more than half of surveyed marketers (56%) are positive overall in their feelings that the senior leadership does understand the importance of both short- and long-term marketing effectiveness.

Broken down further, 19.4% of marketers strongly agree and 36.6% agree that senior leadership does understand the importance brand marketing plays in a varied media mix.

However, there has been a sharp increase in the demand for performance marketing amid a flurry of uncertain economic factors, though, so time will tell if this belief in brand manifests in increased budgets.

Marketing Week is planning a series of content based on the Language of Effectiveness data. In the coming weeks we will be exploring how economic uncertainty has impacted budgets and how the role of digital media. 

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