It’s no secret that CMOs are facing downward pressure on their budgets: according to the 2024 Gartner CMO Spend Survey, average marketing budgets fell 15% year-on-year in 2024. It’s more important than ever that CMOs are able to justify their spend and demonstrate the ROI of marketing investments.
However, according to Gartner research, only 40% of marketing leaders report that their marketing data and analytics (MDA) has met their expectations for influence on the marketing function and are able to demonstrate ROI. In such cases, leaders are 2.4 times more likely to reduce or plan to reduce budgets.
There are three steps that marketing leaders can take to address these challenges and better prove the ROI of their budgets:
Tackle marketing analytics skills gaps
Gartner’s survey found that marketing leaders who say their marketers have the necessary skills to use marketing analytics are 9.5 times more likely to say that MDA has met expectations for influence and demonstrated ROI. But, it’s not just about upskilling the MDA team – CMOs must focus on improving the data literacy of all marketers in the business.
In 2024, marketing programmes are data-driven, and teams need to have the foundational skills to make decisions, understand customer needs and plan omnichannel campaigns.
Enable and encourage frequent communication with MDA staff
Communication with MDA is key. Marketing leaders who said they could demonstrate ROI and had achieved the expected level of influence with MDA said they had frequent communications with their internal marketing analytics staff. However, frequent communication with external marketing analytics service providers did not impact the ability to gain influence or demonstrate ROI. This highlights the value of the institutional knowledge of an internal team.
Even so, CMOs don’t necessarily need to insource everything for marketing analytics in order to improve. Instead, they should be strategic about when to insource or outsource. They should consider areas where it is okay for MDA to be one step removed from the business context, or where external expertise might help build internal capabilities, versus areas where internal context is vital.
Elevate MDA leaders to senior positions
The seniority, and therefore influence level, of MDA leaders has a significant impact on the effectiveness of MDA programmes. Senior marketing leaders whose highest-ranking marketing analytics professional was two or more levels below the C-suite were 1.8 times more likely to report a lack of MDA influence and failure to demonstrate ROI.
By elevating MDA leaders to more senior positions, CMOs can build the credibility of MDA and its work. This will improve the power of MDA to influence internal stakeholders and prove marketing’s ROI. At the same time, MDA leaders need to become more effective at identifying, cultivating and engaging champions in the C-suite to solidify their strategic influence.
CMOs should consider placing an analytics professional in the C-suite or one level below. If this isn’t possible, they can elevate the profile of a key marketing analytics stakeholder in other ways. This could include giving them specific roles in key strategic projects or promoting their expertise in specific functions, capabilities or project groups to increase their exposure to key internal stakeholders.
There are many ways for CMOs to improve their ability to prove marketing’s ROI. By focusing on optimising MDA, CMOs can improve their team’s skills and address capability gaps and elevate the visibility of MDA and their work.
Lizzy Foo Kune is VP analyst in the Gartner Marketing Practice
