The CMO of the future is one grounded in analytics. Big ideas, creative vision and innovative thinking are all still critical for the long-term success of an organization, yet with the drastic proliferation of data available to a marketing team, the future CMO has no choice but to use the data to leverage strategic advantage over the competition. It’s either do that, or allow the competition to do the same to your firm.
When talking about marketing metrics, Return on Investment (ROI) quickly surfaces as the centerpiece of the conversation. Impressions, clicks, media costs, conversions, view-through conversions, conversion rate, and cost per conversion are thrown onto the table and dissected for new insights.
What’s not discussed as frequently is the Total Cost of Marketing (TCM). When TCM enters the discussion, it changes the dynamics of the dialogue and forces everyone to take a broader, deeper and more holistic view. In other words, it enables the CMO to assess ROI at a much more detailed, accurate and useful level.
In assessing the value of a specific marketing channel or campaign, it’s important for the CMO to include costs for overhead, salaries, production costs and outsourcing fees. At the same time, the CMO cannot have a myopic view of the “R” in ROI. Instead of limiting their view of results to the volume of leads or other types of conversion, additional factors such as lead-to-customer ratio and lifetime value of customer need to be included in the equation.
The true measure of a campaign is not necessarily return-on-ad-spend (ROAS), for example. It’s the projected lifetime value of the campaign vs. TCM. Yet you hear certain marketers treat ROAS as a golden standard all the time. We need to upgrade the conversation in order to gain a firmer grip on true ROI.
The CMO of the future is certainly one grounded in numbers and metrics, but the data needs to go way beyond surface-level campaign stats.