B2B Marketers Yet to Connect Financial Metrics to Marketing Campaigns - eMarketer
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B2B Marketers Yet to Connect Financial Metrics to Marketing Campaigns

Greater ability to demonstrate efforts vs. financial impact of marketing programs

August 30, 2011

According to Sagefrog Marketing Group, 68% of US business-to-business (B2B) companies allocate 5% or less of their company revenue on marketing. For an enterprise-level company, this could mean millions of dollars. But for SMBs, marketing money could be much tighter.

Although April 2011 data from Forrester Research suggested companies with 100 to 499 employees tend to allocate a slightly higher percentage of their company revenues to marketing than companies with more than 1,000 employees, these percentages still remain only a tiny wedge of total company revenue.

Percent of Company Revenue Spent on Marketing According to US B2B Marketers, 2011 (% of respondents)

Given how tightly B2B companies tie marketing budget to company revenue, one would assume the majority of companies are closely measuring the effect of their marketing efforts on their bottom line.

However, research from Lenskold and the Pedowitz Group indicated only about one in three B2B marketers worldwide report financial-contribution metrics to senior management.

Though a third of B2B marketers track revenue metrics associated with marketing-generated opportunities, closed deals and percent of total sales, 35% said they do not report any financial-contribution metrics to executives.

Financial Contribution Metrics Reported to Senior Management According to B2B Marketers Worldwide, 2011 (% of respondents)

Slightly fewer (33%) did not track return on investment (ROI) at all this year—a percentage mostly unchanged since 2009, indicating little movement on the part of B2B companies worldwide toward holding their marketing departments more accountable for the company’s bottom line.

B2B Marketers Worldwide Who Calculate ROI to Assess Marketing Effectiveness, 2009-2011 (% of respondents)

For now, it appears marketers are more likely to be held accountable for marketing-performance-related metrics. More than half (58%) report the number of marketing-qualified leads to senior management and 48% track the number of opportunities generated. Far fewer B2B marketers report lower-funnel metrics like percent of opportunities converting to closed sales (40%) and number of days from lead to closed sale (20%)—a particularly important metric to understand for proper campaign flight and window of measurement.

Performance Metrics Reported to Senior Management According to B2B Marketers Worldwide, 2011 (% of respondents)

Undoubtedly, these types of metrics are much easier to track and report than financial-related metrics that require a closed-loop reporting setup that takes time, effort and financial investment on the part of marketers and internal stakeholders. For example, the marketing department must work closely with sales to align metrics and often must invest in CRM technology or software to accurately track campaign influence through the life of the sales cycle.

Those B2B marketers who are able to move beyond performance-related metrics will not only be able to better justify their existing efforts, but also their future marketing budgets.

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Check out today’s other article, “Sizing the Mobile Payments Market.”

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