As budgets tighten in tough economic climates, marketing is often the first place the CEO and CFO look to cut expenses.
So how does the CMO protect the marketing budget? The answer: position it as an investment rather than an expense.
But how do you do that?
Management and peers must agree with the evaluation criteria used by marketing to reduce, retain or increase the advertising budget. Ultimately, that means access to a dashboard on the computer that yields the latest metrics for all marketing channels in the format that company leaders understand.
In a recent Forrester report dated November 13, 2008 "Getting Started With Marketing Dashboards Protecting Marketing budgets in an Economic Downturn," Cindy Commander and her team addressed dashboard development in detail.
It is well researched and written. I recommend it to any CMO looking to create a new or better dashboard.
The report lists a few key points that demand special attention.
The executive summary in this report states that "marketers today use dashboards to align the organization to standard objectives, communicate the value of specific marketing initiatives, increase the transparency of marketing budget spending, or highlight opportunities for more efficient budget allocations or performance improvement."
In my experience, the need for dashboard access to marketing intelligence has become mandatory for a number of reasons.
-The phenomenal growth of data muddies the water and hides the answers about what is and is not working.
-Marketing budgets are under siege as economy places pressure on all non-accountable marketing costs.
-The complexity of the marketing options have focused more attention to marketing as well the credibility of the true value of marketing to peers and the CEO.
-The growing complexity of the channels has made measurement more difficult for all marketers.
-The report says, "...40% of chief marketing officers list improving marketing return on investment (ROI) as a top objective...marketing leaders believed that the economic slowdown would result in their budgets being cut."
Dashboards designed to show the contribution of marketing in metrics the company understands and agrees to.
But there is a significant obstacle encountered by CMOs according to Forrester. The marketing team lacks the analytical skill needed to create metrics that drive the dashboard.
And there are additional challenges.
-It's hard to fix the leaks when it's pouring rain. The dashboard issue should have been addressed when times were good. But better late than never. So many companies outsource the dashboard development working with internal staff as needed.
-Internal disagreements on what measurements or metrics will drive the marketing budgets. For example, B2B tracks leads but not the conversion of leads to sales or retention data. Every silo has its own set of evaluation criteria. One CMO was noted by Forrester as saying, "Despite having consistent metrics, he was unable to use them to offer comparable insights across the company because of the organization’s vague definition of customer satisfaction."
-"Absence of a single marketing dashboard technology platform."
The report goes into some detail about how to go about dashboard development and recommends a focus on People, Process, and Technology. "As companies look to mature their dashboards and include more sophisticated modeling and analysis, the need for analytics skills will increase; a recent Forrester survey indicates that 71% of chief and senior marketers believe that analytics capabilities will be important to the future success of their marketing organization."
The ultimate challenge for the CMO lies in working collaboratively with silos to create the dashboard. The dashboard assembles marketing budgets, circulation and divisional sales relying heavily upon the different operational areas of the company. Without CEO support, some companies will never be able to create a useful dashboard that validates the marketing budget.
What experiences have you encountered with your efforts to use or develop a dashboard? What are the things to watch out for that spell the difference between success and failure in such an effort?