UK marketers are throwing away billions of pounds a year in spend by relying on gut instinct and guesswork rather than data and rational decision-making – with even agencies being left out in the cold.
That is the damning verdict of a new report by marketing software firm marketingQED, which quizzed 459 marketers, and found that according to the industry’s own estimates more than £2.5bn is wasted annually.
But the study found the level of forecasting and evaluation undertaken by companies was typically so low that the true figure is likely to be significantly higher.
When asked what most influences their marketing decisions, respondents were more likely to simply follow what their firm has tended to do in the past (39.4%) or what seems to be the commonly accepted practice in the industry (34.9%) rather than seek advice. Just 6.8% sought advice from colleagues, 6.1% from their marketing agencies.
Very few used data to predict what results they would achieve. Three quarters (75.6%) had never employed a data professional.
Even of firms with marketing budgets in excess of £1m, nearly two-fifths (37.2%) did not report using any analytics tools whatsoever. Even after campaigns had ended, little analysis was reported – overall a fifth (22.4%) of firms do no evaluation on whether their choice of marketing channels had been effective.
As a result, the report claims it is likely that very few marketers have an accurate idea of what the outcome of a planned campaign will be, nor do they have a clear idea why past campaigns achieved the results they did.
MarketingQED chief executive Glenn Granger said: “Most marketers make decisions based on instinct, convention, or their experience of what tended to work well in the past. The problem is that this seldom works, and there is massive wastage as a result.
“Marketing is fiendishly complicated: most single purchases are the result of many messages received through many channels, in many places, over a period of time, and this is too much data for our brains to process. Marketers can guess what works and what doesn’t, but their guesses are often wrong. At worst, they are playing darts blindfold.”
And despite more than a quarter (28.6%) of marketers estimating that at least one in five pounds they spend is wasted, the industry has proven slow to adopt new technologies. Overall, just 2.6% of respondents reported basing their decisions primarily on algorithmic forecasts.
Granger added: “Marketers are missing tricks left, right and centre. They often use the wrong channels, allocate too much or too little money, on their campaigns, and have little accurate idea of what impact each choice has on the bottom line. This needn’t happen.
“In my experience, marketers who have used data intelligently have raised their profits by as much as 20%. However, these are the exceptions. Unfortunately, most marketers remain rain-dancers when they could and should have evolved into meteorologists.”
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