How To Justify Your Marketing Spend To Your CFO
Marketers are under increased pressure to prove the value of every marketing activity and channel within their marketing mix – not only to show that they are having a positive impact on the growth of the business – but to secure that all important buy-in from the CFO and other stakeholders who hold power over budget. In fact, research by eConsultancy highlights the fact that 60% of marketers face pressure to prove ROI on their activity.
But the very real issue for many marketers is lack of access to the right type of marketing attribution tools to do just that.
So, if you can’t show that any marketing channels other than Direct or PPC are bringing real value, chances are you’ll be deterred from exploring any new channels where there could be opportunities to acquire new customers at a much lower CPA.
And even if you are tempted to explore these other channels there is strong evidence to suggest that internal stakeholder pressure is going to limit your scope. With QueryClick’s own research uncovering the fact that 68% of Marketing Directors report that internal stakeholder pressure actively restricts the option to employ marketing activity with longer term payback.
So, attribution matters. And accurate data gives marketers the power to push back and take more control over the marketing mix and allocation of budget. And, with spending on marketing analytics expected to increase 71% in the next three years getting buy-in and finding the right attribution solution is crucial.
How you frame your attribution analysis is key
We all know customer journeys are becoming longer and more complex – spanning multiple devices and touchpoints.
Research by Forrester suggests that 56% of consumers use their mobile device to research products and Marketing Week found that buyers also use an average of almost 6 touch-points on the buying journey.
Because of this, how you frame your marketing spend to your CFO is crucial for justifying spend.
But, CFOs want to see results – fast.
So, they are going to be looking for you to show how many conversions are associated with a campaign in a given – often very short – time frame. And that matters. But what is just as, if not more, important is to understand and explain how that number is still only a small part of a much bigger picture that drives ROI.
And to do that you need an attribution view that allows you to “see” right across the customer journey. And to include the impact of each and every touchpoint along the way to conversion.
This is where a multi-touch attribution model comes in.
Don’t let a single-touch model hold your analysis back
If you’re relying on a single-touch model – such as First or Last-Click – that treats every touchpoint as an individual event in a silo, it’s impossible to get a complete picture of the entire customer journey. And how each marketing activity influenced that conversion.
And even more difficult to clearly show the impact to your CFO.
Let’s return to our example from earlier – and assume you are a retailer of smart washing machines. A potential customer performs a Google search on smart washing machines and comes across an educational video guide to buying smart washing machines on your website. Over the next couple of weeks, he interacts with a combination of retargeting ads, Paid and Organic social and emails in his inbox from you. And finally clicks through on a PPC ad to make the purchase.
In the scenario above using either First or Last-Click analysis the initial Google search or PPC click at the end of the journey would get 100% credit respectively, which is a clear over-simplification on what is actually happening during the user journey.
Over-reliance on this type of simplistic analysis is driving spend into PPC – which is having a bigger side effect as it is driving overall CPAs up and marketing effectiveness and ROI down over time.
Connect the discussion to the customer journey, wasted spend and ROI
So how do you ensure that your attribution is more active than the scenario above?
In short, you need to select an attribution solution that gives you a complete picture of the customer journey so you can see what’s working – and what’s not working – to drive growth and ROI. And the results are worth considering.
Again – let’s look at a practical example. In a recent webinar that QueryClick participated in with Campaign, Haroun Saleemi (Head of Ecommerce at clothing retailer QUIZ) explained how using this type of solution has enabled them to rebuild their attribution data and view of the customer journey to:
- Reallocate Google Ads media spend from poor performing campaigns to the best performing campaign in this set – taking 22% of media spend that’s wasted and generating an extra £1.4 million a year of revenue.
- Identifying 34% of their Facebook ad spend was being wasted within certain Facebook campaigns – and by reallocating this, they could drive an additional £1.6million of revenue from this activity
These are the types of discussions that are worth having with your CFO and ones that are likely to be music to their ears!
Discover how to combat wasted spend
We’ve created six use cases that explore why effective marketing attribution is key to solving a number of challenges faced by today’s marketers: from justifying marketing spend to getting more customers for less. To learn more, download the eBook below.
Marketing Attribution Use Cases
Own your marketing data & simplify your tech stack.
Have you read?
Attribution models are central to delivering highly effective marketing that contributes to revenue and ROI inside any business. And there are a plethora of them out there from simple rules-based...
With Black Friday just around the corner the thoughts of many retailers will have turned to how to maximise what, on the face of it, has become a key time...
Marketers are still dealing with the ramifications of the iOS14.5 update. But before we get the chance to step back and assess the impact this has had on our marketing...