Measuring ROI still a major challenge

At a time when spending accountability is top of mind, the majority of companies are still unable to measure the return on investment (ROI) of their marketing campaigns, according to a recent study from international management and technology consultancy Accenture. Meanwhile, those with measures in place generally underestimate their costs, which should include the entire process, from research through to creative.

At a time when spending accountability is top of mind, the majority of companies are still unable to measure the return on investment (ROI) of their marketing campaigns, according to a recent study from international management and technology consultancy Accenture. Meanwhile, those with measures in place generally underestimate their costs, which should include the entire process, from research through to creative.

The study found that 68% of respondents could not measure ROI, 70% continue to have trouble capturing consumer attention and 65% are wrestling with data integration in order to develop better customer insights.

Jerry Garcia, partner in Toronto-based Accenture’s Customer Relationship Management practice, says that while effectiveness of a campaign was measured mainly by revenue generation, customer retention and profit generation, most marketing executives are hampered by company structures that build walls between departments when it comes to getting true measurement of ROI.

‘It depends on the analysis on the customer segment, how it was executed through call centres and outbound sales groups, the effectiveness of creative marketing and inbound response to a call centre,’ says Garcia. ‘Tying all those things together typically crosses organizational boundaries and many different processes in a company. What the survey points out clearly is that many marketing executives felt they didn’t have the ability to control or effectively influence those other processes and groups that aren’t within marketing.’

Because of these inter-company divisions, costs are often underestimated, says Garcia. For true accountability, companies need an end-to-end view that integrates analytical, operational and creative marketing. The IT, sales (including call centres and customer feedback), advertising and marketing groups have to be linked, not necessarily under one executive, but under two or three who work together.

Garcia says a perfect example of a company that does this well is Docomo, a Japanese wireless company with almost 40 million customers. ‘They have integrated their marketing and sales together, including call centres, under one executive vice-president.’

Using analytical measures extracted from the data warehouse, the marketing team handles handset design, interfaces with the finance department to determine rate plans, and interacts with call centre agents. The group also teams with the creative advertising groups to drive campaigns.

‘[The company] is very well-integrated and it didn’t happen by accident – it took years to get there,’ adds Garcia.

Although the Accenture study polled marketing executives in the U.S. and the U.K., Garcia says it is also very representative of the Canadian experience, based on other Accenture reports.

Two other top marketing challenges cited by executives include breaking through ad clutter, and integrating and sharing customer data across their companies.