Demonstrate sizable, continually growing digital marketing ROI from a mix of long-term, integrated campaigns to targeted audiences and insight-driven, real-time messaging to interested prospects and customers.
That’s what every CMO desires (well — expects, honestly) from their teams today.
After all, these marketing executives need to prove to the rest of their C-suite — especially their CEOs — the approaches implemented (and marketing cost of said approaches) bear fruit in the form of new and returning website visitors, active app users, engaged email recipients, and, ultimately, customers.
But these business leaders don’t just expect substantial digital marketing ROI from their ongoing cross-channel marketing campaigns and individualized messaging.
They also expect meaningful results from their martech stacks — proof their technological investments have paid off and will continue to do so.
In other words, CMOs need to conduct ROI calculations to prove said investments in marketing tech — legacy tools like campaign measurement and analytics software and modern solutions like customer data platforms (CDPs) — lead to success with digital campaigns and, directly or indirectly, revenue generated.
One thing marketers like you may not realize?
The marketing ROI from campaign tactics and messaging versus the return on marketing investment from martech isn’t the same — at least in terms of measurement.
So, let’s break down the key differences between them.
Marketing ROI calculations: One formula for martech, one for your tactics
Every dollar spent by your marketing team — social media ads, sponsorships, digital advertising, retargeting efforts — counts. What’s more, that spend is scrutinized by leadership regularly.
These executives need hard data from their CMOs that says, “This is what X tactic or technology will do for our digital marketing ROI and business as a whole in Y days/weeks/months.”
Given only one in four marketers say they can quantify their return on marketing investment, you should make it a big priority to ensure you and your team have a plan in place to boost your digital ROI — both from individual marketing campaigns as well as enabling technologies you and your team put in place.
Measuring marketing ROI from your ongoing campaigns
There are several commonly used marketing ROI measurements both B2B and B2C marketers monitor regularly regarding their integrated campaigns (a.k.a. cross-channel marketing) and attempt to improve upon. But not all of these metrics carry the same weight for all organizations.
Thus, it shouldn’t come as a surprise each brand is unique in respect to how it calculates ROI over time.
For instance, customer lifetime value (CLV) matters to both B2B and B2C marketing pros, but how both marketers define “successful” CLV based on their clients and customer base and the types of attribution models they build to determine which touch points impacted their ROI will vary.
Having said all that, these are the most popular marketing metrics — ones that truly impact a brand’s success — CMOs and their teams track today:
To reiterate: The importance and prioritization of these marketing metrics will vary from brand to brand based on their own distinct objectives — meaning there is no one, widely used ROI calculator you can use to determine the quality of returns on tactics put into play and martech applied for your strategy.
But the one commonality for businesses who use these metrics as a barometer for their marketing and sales success is they need the appropriate technology foundation to aid their efforts.
How to calculate marketing ROI from your martech stack
Marketers everywhere — from B2C retailers and DTC brands to B2B ecommerce companies — are rapidly realizing the need for lucrative martech that helps them better leverage the first-party customer data that is currently scattered and locked across various systems.
The right technology can enhance the operational efficiency of the marketing organization first and foremost, which ultimately leads to greater efficacy of integrated campaigns and real-time messaging.
According to a 2019 CMO survey, artificial intelligence is marketing executives’ secret weapon for digital ROI improvements, as they apply it in a variety of ways:
We happen to be experts when it comes to maximizing marketing ROI with a CDP, especially as it relates to enabling marketing organizations to unlock greater value from the first-party data they already have, but are unable to utilize with maximum efficiency.
But we also recognize brands like yours have other software and tools in their marketing technology stacks you use to store and leverage customer data.
With that in mind, now’s the time to audit your martech stack and ask important questions — ones that can provide clarity on the state of your tech and any needs you have, including:
- How many team members — marketing, IT, and otherwise — help own and operate our martech and data for marketing? And how much time does it take for each member to handle core tasks?
- How easily can we activate customer data through our martech solutions and, in turn, orchestrate customer lifecycle marketing activities that convert our prospects and customers?
- What barriers, if any, do we encounter when planning, executing, and analyzing our integrated marketing campaigns? And what solutions or workarounds, if any, do we implement?
- Did we, as a company, meet our target monthly, quarterly, or yearly business goals and SLA based on the results of marketing campaigns run through the solutions in our martech stack?
- Has our martech stack ultimately led to a greater number of conversions, improved customer churn prediction and retention figures, and better customer loyalty?
The quicker you understand which marketing solutions actually provide value for you and your team, are easy to use and extract insights from, and allow you to activate data in different capacities across channels, the sooner you can eliminate the weak links in your martech stack — solutions that serves little or no purpose or are simply redundant — and turn your attention to the platforms that actually “work.”
As the CMO Survey noted, “Executives in other functions want to be assured that marketing is minimizing waste and staying at the frontier of effectiveness, efficiency, and agility.”
If you recognize your current tech isn’t accelerating your programs’ goals because each one is narrowly focused on specific stages of the customer lifecycle like brand awareness (important, but far from telling the whole story of your marketing), it’s time for a change.
Improving your organization’s marketing ROI requires right martech and attention
From the moment new martech solutions or campaigns and programs are implemented, the clock starts ticking for your team to deliver on its promised digital marketing ROI.
Some marketers need to show at least moderate progress (e.g., leads generated) for any platforms or programs they put into play in the short term (i.e., the next calendar month or fiscal quarter).
Other marketers — those whose C-suites have grander ambitions and, thus, expedited timelines for success — need to show those strategic additions will provide both short- and long-term benefits, which may not be measured based on KPI metrics like CPA.
Instead, focus on measuring operational efficiencies like time saved on execution or the ability to test and learn on a more rapid cadence.
Regardless of the specific return on marketing investment you need to eventually prove to leadership, it’s important to realize the right mix of marketing campaigns and martech makes all the difference.
How to identify marketing ROI-enhancing martech
With thousands of marketing technology options available today (7,040 martech vendors, according to one revered industry veteran), it can be overwhelming to narrow down your list and choose a select few solutions to advance your marketing metrics and generate greater marketing ROI over time.
But there are certain questions you should ask these companies to ensure they meet your requirements. Nielsen offers 10 such questions to ask, the most important of which are:
- Does your marketing tech support some, most, or all of your business use cases?
- Will your martech seamlessly integrate with all the other tools in your stack?
- Can one person own the technology entirely, or do you need a team to operate it?
- How will your tech ultimately help you better connect with and convert customers?
Ask these Qs and others on the list to the martech vendors you deem as potential options, then present your business case to marketing leadership for the top choices.
It may take some (or a lot) of person-hours to find the right tech. But if the implementation of said tech leads to an amplification of the marketing organization’s output that results in gradually growing metrics, it will have been worth the time.
Achieving better marketing ROI with a pure-play customer data platform
Harvard Business School’s Jill Avery noted there are four key benefits for marketers and CMOs to properly measure their marketing return on investment:
- 1) They can justify their marketing spend (assuming they achieved the desired results).
- 2) They can use those justifications to get more money for additional resources.
- 3) They can see how their marketing campaigns stack up against their competitors.
- 4) They can hold themselves accountable by showing their marketing metrics to sales.
If you’re unable to accomplish the first marketing ROI goal, then the following three are all moot. It also means it’s time to rethink your overall marketing strategy and the purpose of the martech in your stack.
When it comes to the latter, there’s really only one proven martech solution enterprise marketers are adopting to consistently provide greater marketing ROI by syncing with other systems in their stack and extracting the most value out of those platforms and the marketing organization at large.
(You already know where we’re going with this.)
How a CDP can help increase your return on investment
When you incorporate a customer data platform into your stack, you greatly enhance the odds of proving your marketing investment was more than worth it.
To get to this point, though, you need to analyze the digital marketing metrics associated with the activation of your unified first-party data via your CDP.
In other words? You need hard data to prove your marketing campaigns deliver results.
This is where an insights dashboard, like the one in BlueConic, comes into play. Here, you get the full picture of how segments engage with you on a granular level.
Some of your martech undoubtedly has built-in analytics, meaning you can see all (or at least most) engagement related to those platforms and their distinct purposes (see the metrics graphic above).
In a CDP like BlueConic, you can not only view meaningful customer insights from those systems unified together, but also activate that data into real-time messaging and ongoing marketing campaigns.
Why other marketing tech doesn’t stack up to a CDP
There are many ways a CDP differs from a data management platform (DMP), data warehouse, master data management (MDM) system, and other popular marketing software.
The two true differentiators, though — ones that can be the difference between maintaining baseline marketing metrics instead of 3x-ing them year-over-year — are data unification and activation.
When you don’t have a legit CDP (and there are certain vendors claiming they are CDPs, but, in reality, don’t meet the qualifying criteria), your data lives in silos — a major deterrent to ROI success.
What’s more, when you want to fuse siloed data sets together, you have to call the aforementioned IT department or marketing operations colleagues to help clean and organize them.
The amount of time that can take these specialists is often anyone’s guess — especially if the marketing and data science teams aren’t as aligned as you and leadership would like them to be.
The CDP as the centerpiece of your marketing program
In short, it’s one headache after another — and the likelihood of potentially stagnant (or decreasing) marketing ROI — when you lack a customer data platform in your marketing tech stack.
When you do have a CDP connected to all your other data sources and, in turn, a constant stream of data coming in and out of your platform, you and your team are capable of accomplishing so much more with your marketing campaigns — and capable of constantly growing your marketing ROI.
Check out our eBook to learn how enterprise brands can transition from cloud suites to best-of-breed stacks built around CDPs to bolster their marketing ROI.