DMA unites with Merkle for CMO Measurement Toolkit

dma_new2The DMA has joined forces with Dentsu agency Merkle for a new initiative designed to provide marketing chiefs with guidance to identify effective measurement and prove marketing effectiveness in the boardroom.

The launch of the CMO Measurement Toolkit is in response to the current economic climate of “stagflation” which has led to marketing budgets being under more pressure than ever.

There is now a greater burden on the marketing bosses to prove the impact of their spend, with an ever-increasing demand to articulate short-term business outcomes at the expense of focusing on what drives long-term sustainable business growth.

However, at the same time, according to the DMA, short-term performance marketing effectiveness has declined by 62% over the past two years, while brand campaign effectiveness has nearly doubled.

The CMO Measurement Toolkit is aimed at helping the industry to communicate marketing effectiveness in the boardroom, while focusing on the measurement best practices that articulate its impact as robustly as possible.

It draws on insight from the DMA’s Effectiveness Databank; a database of advertising effectiveness which has now been updated to cover over 1,200 DMA Awards entries from the past six years.

DMA UK director of insight Ian Gibbs said: “The pace of change in marketing is hard to keep up with. New channels, platforms, metrics, and pieces of adtech kit flood the market on a weekly basis, each proclaiming that their relevance has superseded everything that has come before.

“Proving marketing effectiveness has become a complex task, but it doesn’t need to be – our new toolkit will help marketers to identify effective measurement and communicate it with the boardroom to showcase the true value of marketing.

“Marketing effectiveness is below pre-pandemic levels for the second year running, so we must prioritise implementing effective measurement to combat the industry’s worsening measurement crisis.”

The report shares five key takeaways for marketers to help:

Focus on measuring what matters to your business: Linking marketing spend to business outcomes such as ROI, profit growth, and long-term customer loyalty will help to sell the organisational value of marketing when budgets are under pressure. However, this was only the case for 8% of marketing measurement KPIs in 2022, indicating that the industry has a long way to go in speaking the language of the boardroom.

Assess which metrics are linked to business outcomes: If the reporting of business effects is what appeals to the boardroom, it’s crucial to understand which KPIs are most strongly linked to positive business outcomes. Ad volume, efficiency and engagement, along with Net Promoter Score and Retention Rate growth were found to be strong business effectiveness drivers.

Contextualise marketing performance against benchmarks: Marketing effectiveness is still below pre-pandemic levels, with sub-standard measurement undoubtedly playing its part. Make like-for-like comparisons with relevant industry benchmarks when setting campaign KPIs.

Stimulate future demand through brand building: Generating customer response to marketing comms is harder when household budgets are under severe pressure. Brand activity can itself drive sales directly, and through a halo effect on performance / response marketing in the short term. Brand campaign effectiveness has nearly doubled over the last two years.

Rediscover the lost art of creativity to drive campaign response: Performance marketing effects have declined by 62% over the past two years in the face of muted consumer demand. Creativity is being severely under-used in the performance marketing space. This is a big opportunity for advertisers aiming to arrest the decline in response effectiveness.

Merkle chief marketing officer Azlan Raj said: “For today’s typical CMO, proving effectiveness is vital, even more so now that marketing budgets are tightly squeezed and pressure to compete with both traditional rivals and new market or category entrants is keener than ever.

“There is so much data that’s now at our fingertips that it can prove paralysing, as marketers struggle to keep their heads above the data flood and aren’t sure what to report upon.

“This toolkit not only provides marketers with actionable insights, it also offers a checklist of our key guidance, to help them summarise their current maturity and rapidly identify opportunities for progression in the measurement space.”

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