1、Gartner for Marketers3 Techniques to Prove Marketing ValueHow CMOs can defend their marketing budget in an uncertain economy1232Gartner for Marketers Follow Us on LinkedIn Become a Client 3 Techniques to Prove Marketing ValueCMOs need to protect the resources they need to deliver valueBoards and the

2、 C-suite expect CMOs to lead the way to revenue growth in 2023 despite the inflation,supply chain constraints and rising talent costs that continue to make everything more expensive.And though marketing budgets as a share of revenue rebounded in 2022 to more than 9%,according to the 2022 Gartner CMO

3、 Spend and Strategy Survey,they are still lower than they were in 2019,forcing CMOs to achieve more with less.If economic conditions degrade further,the C-suite may follow the typical playbook of cutting marketing budgets to manage costs,threatening marketings ability to deliver value.In times of ec

4、onomic uncertainty,CMOs need a strategy to protect their budgets and,with it,their results.This eBook presents three approaches that focus on quantifying how marketing drives demand and communicating that to executives.They are:Prove marketings value.Evaluate different versions of the marketing budg

5、et across multiple KPIs.Establish triggers for adjusting marketing investments.These approaches leverage marketing analytics and marketing mix modeling not budget cuts or efficiency approaches to establish guideposts for planning.CMOs Respond to Economic Uncertainty in a Variety of WaysSource:Gartne

6、rDefend MarketingMarketing-Led GrowthProve Marketings ValueCost Optimization on Marketing SpendEvaluate Budget Versions Across Multiple KPIsIncrease Marketing EfficienciesEstablish Marketing Investment TriggersMarketing-Led InnovationCovered in This Report3Gartner for Marketers Follow Us on LinkedIn

7、 Become a Client 3 Techniques to Prove Marketing ValueProve marketings valueMost companies have clear growth plans.When economic headwinds challenge them,marketers must show the connection between marketing investments and growth to protect them.To do so,it is important to know the overall value of

8、every marketing dollar spent and communicate that in terms the executive team cares about.For example,marketing should be able to communicate,for every$1,000 invested in marketing,how much the company generates in demand,in the number of marketing qualified leads(MQLs),in new accounts and so on.Metr

9、ics related to MQLs and new accounts are more powerful when linked to concrete impact in monetary terms.Metrics are stronger,as well,when tied to annual strategic priorities.For example,if a bank has a goal of opening 100,000 new checking accounts in a calendar year,marketing should have an aggregat

10、e estimate of how$1,000 of investment translates to new account acquisition.If customer loyalty is the goal,marketing should show how marketing investments deliver retention.01Strategy4Gartner for Marketers Follow Us on LinkedIn Become a Client 3 Techniques to Prove Marketing ValueCMOs need to prote

11、ct the resources they need to deliver valueProve marketings valueThe exact calculation a given organization uses will depend on its maturity in using marketing analytics coupled with the availability of relevant data.Less mature organizations with less data should offer metrics at the aggregate leve

12、l for the year.For example,an organization that spends$300,000 on new customer growth in 2021 and acquires 1,500 new customers during that year would have a customer acquisition cost of$200 per customer.Use benchmarks when usable data doesnt exist.More mature organizations with more data provide det

13、ails and granular metrics for different activities.Metrics reflect the true,incremental value caused directly by marketing,which is updated monthly and can be broken down into finer detail.Underlying methods tend to be more advanced.One technique is marketing mix modeling,which leverages techniques

14、to identify the exact incremental impact of specific marketing activities to inform investments and adjustments to strategy.Low Maturity High Maturity 01Strategy5Gartner for Marketers Follow Us on LinkedIn Become a Client 3 Techniques to Prove Marketing ValueEvaluate different versions of the market

15、ing budget for how they affect different KPIs not just ROIWhy Marketing ROI Is Not a Perfect MetricSource:Gartner Analysis.Based on the work of Professor Tim Ambler,London Business SchoolActualAlternative A(10%Decrease in Marketing Spend)Alternative B(20%Increase in Marketing Spend)Volume(Indexed)10

16、0.095.0 110.0Revenue($B)10.09.511.0Marketing Spend($B)2.01.82.4Variable Costs($B)4.03.84.4Fixed Costs($B)2.42.42.4Net Profit($B)1.61.51.8ROI(%)80.083.375.0A 10%decrease in marketing spend may sound compelling when it yields a significantly higher ROI than other spend options.however,it could prevent

17、 marketing from pursuing more profitable alternatives.CMOs often assume that ROI is the best metric to prove marketings value to the enterprise.But relying on ROI alone may harm marketings ability to deliver against a broader set of enterprise goals.Enterprises also care about market share,profitabi

18、lity,sustainability and so on.To build a value case for marketing,CMOs should instead leverage the broader concept of return on objectives to show how marketing investments deliver against a diverse set of goals.AssumptionsVariable costs as 40%of revenueMarketing spend is separated out from all othe

19、r costsTen percent decrease in marketing spend=5%decrease in revenueTwenty percent increase in marketing spend=10%increase in revenue02Strategy6Gartner for Marketers Follow Us on LinkedIn Become a Client 3 Techniques to Prove Marketing ValueCMOs need to protect the resources they need to deliver val

20、ueEvaluate different versions of the marketing budget for how they affect different KPIs not just ROIEvaluate budgets across multiple metrics to stimulate dialogue about trade-offs,such as revenue versus margin growth,short-term versus long-term growth,growth for one product line versus another.Cond

21、uct scenario planning based on aggregated activity spanning multiple metrics.Data will most likely be available for metrics related to customer value,sales volume and marketing expense.Additional metrics will require new investment,but make sure insights can be delivered fast enough to leverage for

22、key decisions.More mature programs will have access to syndicated data,survey trackers,proprietary data streams and affinity modeling.These deeper insights allow marketers to calculate market share and consumer sentiment-type metrics the value of which is high when the economy is uncertain,and teams

23、 can leverage them to scenario plan and weight the benefits of different approaches.02StrategyMarketers are better able to maximize returns when they evaluate multiple scenarios,including those that look forward using the predictive models available with marketing mix modeling and which include a si

24、mulation interface or tool.Low Maturity High Maturity 7Gartner for Marketers Follow Us on LinkedIn Become a Client 3 Techniques to Prove Marketing ValueEstablish marketing investment triggersTriggers Improve Strategic Execution of PlansSource:GartnerStrategy Triggers Ensure Plans Stay RelevantInvest

25、ment Triggers Spark Likely Need to Respond Identify and use assumptions as triggers for strategy review.Contain a measure for validation that can be falsified.Example:The inflation rate will hover between 4.2%and 6.1%for the next 12 months.Example:Customer acquisition cost increases of 15%trigger up

26、per funnel marketing review and investment decision.Identify market changes as triggers for course change or investment.Documenting assumptions ensures transparency and distinguishes objective facts from beliefs.Marketing teams should identify triggers that signal when conditions change,and they nee

27、d to revisit their strategic plan.Triggers improve planning in two ways.They:1.Ensure plans stay relevant by prompting a review when assumptions fail to hold up2.Spark the need for investments when in-market behavior exceeds a predefined thresholdExample triggers include:Loss of market share Decreas

28、es in product consideration Increases in competitor spending Declines in new customer value Increased acquisition costs Erosion of conversion rates03Strategy8Gartner for Marketers Follow Us on LinkedIn Become a Client 3 Techniques to Prove Marketing ValueCMOs need to protect the resources they need

29、to deliver valueEstablish marketing investment triggersAn organizations choice of trigger metrics should balance slow metrics that dont change that quickly or the updates to which are infrequent and quick metrics that are revised weekly,daily or even more frequently.Identify the right one or two tri

30、ggers that balance speed with accuracy for the executive team.The benefits of using a quicker trigger metric than your competition can be immense.Track costs per activity(such as cost per webinar sign-up,form fill out or website visitor)in aggregate for a given time period.Consider diverting resourc

31、es to competitive intelligence,such as tracking messaging by competitors,by monitoring owned digital properties and paid advertising.Track trigger metrics,such as conversion rates,in more detail and level of granularity for example,by customer segment,geographic region or details related to a purcha

32、se.These detailed metrics allow teams to make granular changes and measure the results.For example,mature teams can cut paid digital campaign spending in one geographic region for a specified time and compare performance results to those of a similar geography.These“natural experiments”provide the s

33、trongest evidence of marketing impact.03StrategyThe largest differences in the use of triggers across organizations at different maturity levels tend to be the use of faster,more granular trigger metrics,including conversion rates,customer acquisition costs and customer value.The planning tools in m

34、arketing mix modeling can also predict the impact a trigger event will have on different marketing activities,such as paid search versus display.Low Maturity High Maturity 9Gartner for Marketers Follow Us on LinkedIn Become a Client 3 Techniques to Prove Marketing ValueWhen budgets still need cutsTh

35、ink long term A study on the budgeting decisions made during the last global recession found that winners in six of 11 industries took proactive budget cuts which enabled them to accelerate growth investments when conditions eased.Reprioritize Many marketing teams overinvest in legacy processes and

36、skills.Use cuts as an opportunity to accelerate simplification,consolidation,automation and outsourcing decisions.Focus training on new skills needed to advance your team,such as experimentation,enabling them to update assumptions and reveal areas for improvement.Reinforce triggersA study on the bud

37、geting decisions made establishing“claw back”triggers reinforces the importance of marketing by establishing conditions under which to make considered investment reductions.Conditions may still require CMOs to reduce their spending.These cuts can hurt,especially when they impact staff and contractor

38、s whove made real contributions to your marketing performance.When evaluating the trade-offs needed to cut budgets,consider three strategies:10Gartner for Marketers Follow Us on LinkedIn Become a Client 3 Techniques to Prove Marketing ValueActionable,objective insightWhat CMOs Need to Know About Mar

39、keting Attribution,Measurement and TestingBroaden Your Marketing Measurement Toolkit to Address Both Tactics and StrategyMaturity Model for Marketing AnalyticsManage Marketing Measurement Trade-Offs by Identifying Your Measurement ProfileHow to Identify,Illustrate and Increase the Impact of Marketin

40、g AnalyticsGartner has a broad set of resources focused on promoting more advanced marketing measurement.Consider scheduling an inquiry to help guide you through this research and highlight the few notes most suited to your particular circumstance and needs.Common reference materials include:2023 Ga

41、rtner,Inc.and/or its affiliates.All rights reserved.CM_2075923Connect With UsGet actionable,objective insight to deliver on your mission-critical priorities.Our expert guidance and tools enable faster,smarter decisions and stronger performance.Contact us to become a client:U.S.:1 855 811 7593 International:+44(0)3330 607 044Become a ClientLearn more about Gartner for Marketing Leaders connected to the latest insightsAttend a Gartner conference View Conference