Marketers Give Themselves Only Middling Grades on Understanding ROI

Marketing frustrationIt turns out that even the practitioners in the marketing field don’t think they’re doing a very good job of understanding the return on investment on key marketing tactics.

That’s a major takeaway fnding from the most recent State of Search Marketing survey conducted by digital marketing information clearinghouse Econsultancy in conjunction with the Search Engine Marketing Professional Organization (SEMPO).

This survey of industry professionals is conducted annually.  The 2013 research cycle queried ~400 industry and marketing/communications agency professionals.

One would think that in an evolving field like digital marketing, the degree of collective skill in the discipline would be rising over time.  But the opposite appears to be the case – at least in terms of the professionals’ own self-assessment of their skills.

The SEMPO research report presents how marketers consider their level of understanding to be in terms of ROI factors.

What the research reveals is a pretty stark decline in self-assessment grades between the 2012 and 2013 surveys:

  • Understanding of paid search ROI:  ~47% consider their understanding to be “good” (down from ~79%)
  • Email communications ROI:  ~41% consider good (down from ~57%)
  • Digital display media ROI:  ~28% consider good (down from ~37%)
  • Social media ROI:  ~11% consider good (down from ~15%)

What’s the reason for the decline in these self-assessment ratings?

It could be ever-changing definitions of what each of these marketing tactics actually encompass.

… It may be that there is an actual decline in overall proficiency as more people are assigned these marketing tasks who have little or no relevant knowledge or prior training.

… Or if could be the rapid speed in which technology is evolving in the marketing sphere.  (Big data isn’t the half of it.)

Of the major marketing tactics addressed by the Econsultancy/SEMPO research, it’s clear that social media and mobile are the most mystifying to practitioners, judging from the percentage of survey respondents that profess to have a “poor” understanding of their ROI:

  • Social media ROI:  ~51% report having a “poor” understanding
  • Mobile marketing ROI:  ~35%
  • Search engine optimization ROI:  ~28%
  • Digital display advertising ROI:  ~26%
  • Paid search ROI:  ~19%
  • Email marketing ROI:  ~14%

Underscoring the admitted lack of understanding about ROI in social and mobile channels, the survey respondents reported that only ~11% of the digital marketing dollars in 2014 will be allocated to social media.

For mobile marketing, it’s even lower (~3% of the marketing budget).

This isn’t to imply that marketers don’t recognize the importance of these tactics.  For instance, more than eight of ten respondents consider mobile marketing to be a significant development in the field.

It’s just that many of them are having great difficulty going from Point A to Point B when it comes to quantifying the marketing payback.

[For access to the full report, which also provides interesting insights on the most popular marketing metrics, go to this page on the SEMPO website.]

2 thoughts on “Marketers Give Themselves Only Middling Grades on Understanding ROI

  1. You allude to my point towards the end of your post. In addition to the three reasons you cite, I think a big reason for this decline is that we (marketers) now “know just how much we don’t know.”

    In prior years, I don’t think we knew what we didn’t know.

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