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.]

SoLoMo: The Newest Buzz Term in Marketing Communications

solomoEvery few years or so, we start hearing a pithy (and sometimes obnoxious) new buzz term in marketing communications.

The most recent entry into the lexicon is SoLoMo – a cutesy amalgam of three terms:  Social Media, Location, and Mobile Devices.

SoLoMo purports to convey the convergence of these three elements into a powerful new driver for marketing:  sparking audience engagement and brand usage via the use of social media, and targeting consumers via their mobile devices when they are locationally proximate.

businesspersonBeyond the inevitable “wink-wink, nudge-nudge” aspects of this term and the “oh-so relevant” connotation it has for those who choose to name-drop it in casual conversation, another drawback I see is the term’s emphasis on tactics rather than on the true meaning of today’s always-connected customers and the potential this offers for relationship-building.

Right now, there are more than a few company and brand marketers who are trying to figure out the best way to have their customers do all sorts of things that will benefit a product’s acceptance and position in the market — things like checking in to a physical location, then taking a mobile picture and uploading it to an Instagram or Facebook page.

This over-reliance on “shiny new object tactics” is what gets marketers to the same place as designing a new and novel app that doesn’t actually fill a true need – and hence becomes an inglorious failure.

Here’s what’s actually going on with consumers today:

  • They have more digital connections available to them than ever before.
  • Because of the pervasiveness of interactivity, consumers expect information to be available to them at any time – and on any device.

The good news is that marketers can establish just these sorts of connections with consumers, simply by using the very same social platforms.  The bigger challenge is making those connections meaningful and relevant.  That’s where effectiveness so often falls by the roadside.

Social media is an “ism” to many marketers … whereas to regular people, they hardly think of it that way.  For them, it’s just another way to engage in their relationships with friends, acquaintances, industry colleagues, fellow hobbyist … and favorite brands.  Other than the digital aspect of the communication, there’s really very little difference from the connections people have established and maintained for years the old-fashioned way.

Location is much more than simply where someone happens to be.  It’s the context of understanding when — and what — the person is doing at or near that location.  Knowing that makes for a more relevant – and potentially profitable — interactions.

Today’s focus on Mobile everything has become almost as myopic as marketers’ tunnel-focus on desktops was a few years back.  Today, we’re dealing with consumers who are perpetually connected.  As for which device, it simply depends on what’s handy at the moment – desktops, laptops, tablets, smartphones.  So, strategies and tactics that focus on one or two of these to the exclusion of the others will fall short of the mark.

While we can give an acknowledging nod to the SoLoMo buzz term, the key is to recognize that it’s actually about today’s perpetually connected consumers — and all of the expectations that come along with that.

In other words, marketers need to be people-focused … but tactics-agnostic.