New Study Claims That Marketers Fail To Understand ROI

Return on Investment slotThe IAPI ADFX Awards are held every two years and are generally considered by the advertising industry as the most prestigious of all the various industry awards to win. They are prestigious for agencies (and clients) to win in that an ADFX award is only given those advertising campaigns which can prove that they have delivered real and tangible results. One of the key criteria used for measuring the results of a successful ADFX advertising campaign is the return on investment (ROI) delivered by the campaign. However, despite the high importance placed on achieving a tangible return on marketing investment a new research study has found that many marketers are simply unable to demonstrate the real financial outcome of their work and that the majority of marketers also lack proper training in the area of marketing ROI and marketing performance.

The findings are from a new research study conducted by The Fournaise Marketing Group who are a marketing performance measurement company. As part of the study the company interviewed more than 1,200 top-level management and marketing executives around the world and also measured the effectiveness of more than 2.5 million business to consumer / business to business marketing strategies, campaigns and advertisements.

Some of the main and somewhat surprising results from the study included the following: 

  • Just over two thirds of marketers (67%) showed a complete failure to understand ROI by thinking that it did not require a financial result.
  • A similar proportion (64%) said they used brand awareness as their main KPI, while 58% put ‘Likes, ‘Tweets’, ‘Clicks’ and/or ‘CTR’ in their top five marketing ROI KPIs.
  • Almost one third (31%) were simply measuring the audience they reached and calling that figure marketing ROI.
  • 63% of marketers did not include any financial outcome when reporting on and presenting marketing results to their CEOs and top management.
  • 80% of marketers were unable to unable to write a profit and loss account and a balance sheet correctly when given a simple business scenario.

As part of its summary and conclusions, the research company identified two major problem areas which both centered on the education of marketers:

  • First, most of the marketing degrees and diplomas being taken around the world did not have any specific training in the area of finance and the measurement of marketing return on investment.
  • Second, even though marketers were well-educated, more than half had qualifications in a field outside their current work and had failed to acquire knowledge of marketing techniques and formulae.
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