The average tenure of a CMO has doubled over the past decade. However, the 45-month average for CMOs still pales in comparison to the seven-year tenure of other C-level executives. What is causing this trend, and why do a CMOs still lag behind their peers in longevity?
Historically, CMOs found it difficult, if not impossible, to quantify the impact of their marketing programs on sales revenues. Current thinking is that this gap contributed to the frequent turnover in marketing leadership roles. With the rise of digital channels and technologies, companies have different expectations of what marketing can and should do. There is an expectation that marketing can measure and communicate impact. Fortunately, the evolution of technology is enabling marketers to accomplish just that.
The ability to more definitively quantify marketing’s contribution to sales is promoting a longer shelf life for the CMO. Data-driven CMOs who can show marketing ROI numbers, impact on sales pipelines, and campaign effectiveness find themselves in a much more strategic and valued role than their predecessors. Demonstrating value can still be challenging, even in the digital age, especially for B2B organizations where most sales are still completed offline. Accurate and timely attribution is an essential component for quantifying marketing’s contributions.
As important as it is (and should be) to marketing leaders, the term attribution is so often tossed around in the marketing world that it has lost its meaning. To further complicate matters, attribution can have different meanings across businesses and even between internal teams. Let’s level-set, though: Attribution, as a marketing term, is defined by eMarketer simply as “a method of assigning credit to a particular marketing-driven interaction or another brand-impressed touch point.”
Sports analogies are often used to help audiences conceptualize attribution. Whether you use an analogy from soccer, basketball, or ultimate Frisbee, the concept is the same: Many players and steps are involved in scoring, so who gets credit for the point? In the marketing world, the question changes: “There are many campaigns, channels, and tactics involved in a sale or conversion. Which one drove and contributed to the sale and to what extent?” This is a loaded question and is difficult to answer, but the answer(s) provide invaluable insights into marketing impact, budget optimization, and customer preferences.
The benefits of a sophisticated attribution practice are real. Some of the benefits are organizationwide, while others are specific to the marketing group(s).
- Stronger and more respected voice in the company
- Marketing will be able to share their impact on sales and their contribution to the sales pipeline
- Companies can see marketing effectiveness and ROI at a granular level
- Improved marketing/sales relationship
- Marketing channels and tactics are viewed as an investment portfolio that can be adjusted and optimized in real time
- Simple and quick allocation of extra or added budget
- Rich insight into the effectiveness of campaigns, channels, and tactics to enable optimization along the entire customer journey
- Improved marketing ROI
According to Forrester, optimizing based on attribution-based insights can reduce cost per action by 30% to 50% and drive improvements in ROI by 50% to 100% over time.
Due to the many benefits of attribution, you might assume that every company would be working tirelessly to build an attribution practice. However, recent studies by Adobe and Econsultancy reveal that roughly 45% of companies are using the most basic of attribution models, and 34% of companies don’t have any formal attribution practice in place. The studies also show that only one in five companies have built mature attribution practices.
One reason for the lack of adoption is that the task can be daunting, and many don’t know where to begin. The growth and evolution of digital channels and technologies have enabled more granular levels of attribution, which has added to the complexity of sophisticated attribution. Use this high-level guide to attribution to help you get started (click on chart to view larger image in another tab):
The value of attribution is proven. As organizations increasingly require marketing efforts to be tied to bottom-line results, sophisticated attribution will become the differentiator between CMOs who have a respected seat at the executive table and CMOs who find their shelf life has expired.