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New Report: Most Marketers Don’t Know How to Calculate ROI

By January 4, 2016 May 13th, 2019 No Comments

marketing-roi.jpgNine out of ten (90%) global marketers are not trained to calculate return on investment (ROI), and 80% struggle with being able to properly demonstrate to their management the business effectiveness of their spending, campaigns and activities, according to new research.

The study, from The Fournaise Marketing Group, measured the performance of Marketers each year, via interviews with more than 1,200 CEOs, management and marketing decision-makers in North America, Europe, Asia and Australia.

The study also looked at the actual effectiveness of 2.5+ million B2C/B2B marketing strategies, campaigns and ads Fournaise Performance-Tracks across all media channels (traditional, digital, direct, mobile) across 20+ countries worldwide each year.

CEO’s want marketers who have a 360-degree view of performance and are trained to deliver (real) business results and prove/optimize ROI.

Key findings from the report include:

  1. 67% of marketers don’t believe marketing ROI requires a financial outcome (these are the very Marketers who struggle to give the correct mathematical formula for marketing ROI), demonstrating a total lack of understanding of what ROI is all about.
  2. 64% of marketers use brand awareness as their top marketing ROI KPI, 58% place “Likes”, “Tweets”, “Clicks” and/or “CTR” in their top 5 marketing ROI KPIs, and 31% still believe simply measuring the audience they have reached is marketing ROI.
  3. 63% of Marketers don’t include any financial outcome when reporting on and presenting Marketing results to their CEOs and top management.
  4. More than 80% are unable to write a P&L and balance sheet correctly when given a simple business scenario. These marketers are unable to give the correct definitions of basic financial KPIs used day in day out by CEOs and Boards (such as EBITDA, P/E Ratio or ROE), and are unable to correctly explain the impact marketing can have on a company’s balance sheet – demonstrating an inability to understand and speak the finance & accounting language.

In other words, every Tom, Dick & Harry is a Marketer, lacking the scientific and financial knowledge necessary to inform and optimize the creative side of marketing.

The report attributed these shortfalls to ‘education problem at two levels’:

(1) The study analysed the content of hundreds of marketing degrees/diplomas around the world and found that 90% do not have any specific (and proper) training on marketing performance & marketing ROI.

(2) The study tracked that 85% of marketers are well educated, but more than 50% have degrees/diplomas in a non-marketing-related field such as English, History, Economics, Journalism, Sociology and Foreign Languages.

Jerome Fontaine, Global CEO & Chief Tracker of Fournaise, said: “In other words, every Tom, Dick & Harry is a Marketer, lacking the scientific and financial knowledge necessary to inform and optimize the creative side of marketing. CEOs have told us again and again: they want marketers who have a 360-degree view of performance and are trained to deliver (real) business results and prove/optimize ROI. As long as marketers continue to fail to get trained in, master the use of and optimize marketing analytics & marketing ROI, they will struggle to demonstrate to CEOs that they are not ‘money spenders who jump on (and hide) behind the latest fads and blow smoke’, but real business generators.”

Source: https://www.fournaisegroup.com/.

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Larry Levenson

Larry Levenson

Larry is passionate about inbound marketing and is a HubSpot Certified Trainer. He's learned the "secrets" of leveraging HubSpot to make marketing hyper-effective and customizes that information to help our clients meet their goals. Larry lives in Prescott, AZ, and when not at work, he is hiking or hanging out with teenagers as a volunteer with Boys to Men USA.