Marketing Report Card Benchmark Report

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Executive Summary: …

Executive Summary:

In a study sponsored by Pardot, Demand Metric conducted a survey to explore marketing’s evolution from a lead generation service bureau to a strategic, center of influence and revenue engine. Answers to these questions were pursued to better understand the current perception of marketing:

- How is marketing perceived internally?
- What level of influence does marketing have in the organization?
- How is marketing connecting its activities and programs to revenue results?
- How difficult is it for the marketing team to justify its budget?
- How current or “state-of-the-art” are the marketing team’s skills?
- How well equipped is the marketing team with technology infrastructure?
- How aligned are the sales and marketing teams?

These study results provide a record card of sorts, providing benchmark data useful for comparison, planning and improvement.


Table of Contents:

- Introduction
- Executive Summary
- Current Perception of Marketing
- Marketing's Contribution to Objectives
- Marketing's Leadership & Respect
- Marketing Revenue Impact
- Marketing Skills
- Analytics, Alignment & Orientation
- Marketing Infrastructure
- Looking Ahead
- Analyst Bottom Line
- Acknowledgements

- About Salesfusion & Demand Metric
- Appendix - Survey Background


Research Methodology:

The Demand Metric 2014 study, “Keeping our Seat at the Table: A Marketing Report Card” was administered online during the period of January 17, 2014 through February 10, 2014. During this period, 259 responses were collected, 207 of which were qualified and complete enough for inclusion in the analysis.

To obtain this document, visit us at http://www.demandmetric.com/register

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  • 1. Benchmark Report Marketing Report Card: Sponsored By: © 2014 Demand Metric Research Corporation. All Rights Reserved.
  • 2. TABLE OF CONTENTS 3 Introduction 23 Analytics, Alignment & Orientation 5 Executive Summary 27 Marketing Infrastructure 6 Current Perception of Marketing 28 Looking Ahead 10 Marketing’s Contribution to Objectives 29 Analyst Bottom Line 15 Marketing’s Leadership & Respect 30 Acknowledgements 18 Marketing’s Revenue Impact 31 About Pardot & Demand Metric 22 Marketing Skills 33 Appendix – Survey Background
  • 3. INTRODUCTION When viewed at the organizational level, marketing can take on several personas. In some organizations, it is reactive and operationally oriented, managed by a marketing professional that is perpetually busy – the “hair on fire” type. In other organizations, marketing exists as a strategic asset, providing leadership not just to the marketing team but also to the entire organization because it is has a visionary leader with a plan that aligns beautifully with corporate strategy. At the operational end of this marketing persona spectrum, marketing at best delivers incremental value, and it constantly struggles to justify its budget and existence. At the strategic end of this spectrum, marketing is a major driver of the organization’s success; it can easily prove its worth and it rarely has issues justifying its existence or the investment made in it. The marketing community at large has aspired to become more relevant by shifting from the operational orientation to the strategic one. Financially, this shift is about moving from existing as a tolerated expense to a valued revenue center, becoming more relevant in the process. This shift must continue if marketing wants to keep its seat at the leadership table. The velocity of this shift at times seems glacial. Pushing this progress along are the improved systems, tools, methods, channels, skills and leadership that marketers are developing or exploiting. Creating drag against progress is an increasingly complex marketing environment, the difficulty of attributing marketing activities to business results, and sometimes simply the culture within organizations that marketers serve. 3
  • 4. INTRODUCTION In a study sponsored by Pardot, Demand Metric conducted a survey to explore marketing’s evolution from a lead generation service bureau to a strategic, center of influence and revenue engine. Answers to these questions were pursued to better understand the current perception of marketing:  How is marketing perceived internally?  What level of influence does marketing have in the organization?  How is marketing connecting its activities and programs to revenue results?  How difficult is it for the marketing team to justify its budget?  How current or “state-of-the-art” are the marketing team’s skills?  How well equipped is the marketing team with technology infrastructure?  How aligned are the sales and marketing teams? These study results provide a record card of sorts, providing benchmark data useful for comparison, planning and improvement. 4
  • 5. EXECUTIVE SUMMARY Primary research for this study was done using a survey, and the data analysis provides these key findings:  Over half of organizations (59%) view marketing as either a necessary or unnecessary expense. Marketers are more likely to view their own function as an expense (65%) than non-marketers (50%).  As company size increases, marketing is more likely viewed as an expense, and less likely viewed as contributing to achieving business objectives.  Marketing organizations identified as “indispensable” in helping achieve business objectives are more strategically oriented, have better alignment with sales, and use analytics to a greater extent to guide their efforts.  The rest of the organization (45%) gives marketing more credit for having a complete understanding of its impact on revenue than marketing itself does (34%).  Over one-third of study participants report that justifying the annual marketing budget is difficult or very difficult.  Marketing skills correlate strongly to revenue growth. Measuring skills of the marketing team on a scale from one to seven where 1 = obsolete or lagging and 7 = state-of-the-art, the average was 4.8. This report details the results and insights from the analysis of the study data. For more detail on the survey participants, please see the Appendix. 5
  • 6. CURRENT PERCEPTION OF MARKETING Figure 1: The dominant internal view of marketing is as an expense. Most modern marketers understand the importance of having the marketing organization operate as a revenue center, where marketing’s contribution to revenue is analytics driven and quantified. To exist as an expense puts the marketing function in jeopardy, keeping it on the short list for cutbacks when financial pressures arise. Internal Perception of Marketing 60% 50% 51% 40% Even though they haven’t figured out how to transform their organizations into revenue centers, CMOs pursue this orientation. The first thing this study attempted to learn is the financial perception of marketing inside the company. 30% 20% 21% 10% 12% 8% 8% 0% Unnecessary expense Necessary expense Breakeven center Modestly Highly profitable profitable revenue center revenue center Marketing Report Card Benchmark Report, Demand Metric, March 2014, n=207 6 The survey sample for this study included members of the C-suite, marketing team, sales team and other corporate functions. Their aggregate perception of marketing is summarized in Figure 1. Over half of organizations perceive that marketing is an expense, and further insights come from looking at the responses to this survey question by role.
  • 7. CURRENT PERCEPTION OF MARKETING Figure 2: Marketing is more likely to view itself as an expense than non-marketers. Perceive Marketing as an Expense Unnecessary Necessary The fact that there is a difference of opinion regarding this perception is not surprise. Even the degree of difference – a 15% delta – doesn’t surprise. The surprise is that marketers are more likely to perceive their function as an expense than the full sample does. 70% 60% 50% 40% 30% 57% 44% 20% 6% 8% Non-marketers Marketers Marketing Report Card Benchmark Report, Demand Metric, March 2014, n=207 7 This perception isn’t the one the modern marketer aspires to for the marketing organization. Do marketers have the more accurate, realistic view? 10% 0% Marketers assess their perception differently than nonmarketers. Their responses are essentially an introspective self-assessment (as seen in Figure 2). It’s impossible to discern from this data. Perhaps this harsher self-assessment is the result of an inferiority complex, cynicism, a steady drumbeat of criticism or possibly a clearer understanding of the true contribution the function is making. Whatever the reason for this selfassessment, the self-esteem of the marketing function seems to have suffered a blow, somewhat unexpected from a department that usually doesn’t lack for swagger.
  • 8. CURRENT PERCEPTION OF MARKETING A major part to remedying this perception of marketing as an expense is analytics. Of those organizations that view marketing as an expense, 50% don’t use analytics at all or only to a slight extent to guide their efforts and show accountability to the rest of the organization. By contrast, for the organizations that perceive marketing as a revenue center, just 16% fall into this same analytics use category. Any organization with properly deployed CRM and marketing automation systems that maintain data quality should have access to the tools and data necessary to demonstrate not just relevance, but revenue impact. The modern marketing organization shouldn’t function any other way. It’s important to acknowledge that analytics alone may not provide all the leverage needed for marketing to transform itself from an expense to a revenue center – corporate culture is sometimes a significant barrier as well. In such cases, however, analytics are still one of the best tools for breaking down cultural barriers. 8
  • 9. CURRENT PERCEPTION OF MARKETING Figure 3: The perception of marketing as an expense increases with company size. Expense Perception by Company Size Another relationship exists between this perception of marketing as an expense and company size, where annual sales determines size: 80%  Small companies: $25 million or less 66% 60% 68%  Medium companies: between $26 million & $500 million  Large companies: Over $500 million 52% 40% This definition of company size will remain consistent throughout this report. The results of this analysis show a trend (as seen in Figure 3). 20% 0% Small Medium Marketing Report Card Benchmark Report, Demand Metric, March 2014, n=207 9 Large The larger a company is, the more likely it is that marketing is perceived internally as an expense. Perhaps marketing is considered more vital in small companies, some of which are struggling to establish themselves or even fighting for survival. Whatever the reasons, as sales increase, so does the perception that marketing is an expense.
  • 10. ABOUT DEMAND METRIC Demand Metric is a global marketing research & advisory firm serving a membership community of over 38,000 marketing professionals, CEOs, and business owners with advisory services, custom research & benchmarking reports, vendor studies, consulting methodologies, training, and a library of 500+ practical tools and templates. Using Demand Metric resources, members complete projects faster and with greater confidence, boosting respect for the marketing team and making it easier to justify needed resources. Our 1,000+ corporate clients range from start-ups to consulting firms to members of the Global 1000. To learn more about Demand Metric, please visit: www.demandmetric.com. To read the rest of this Benchmark Report, become a Demand Metric member today!