Why is ROI so Hard to Prove?

If you’re struggling with ROI, you’re not alone. According to a recent study of global CMOs conducted by IBM, over 50% of global CMOs are having trouble providing hard numbers to prove the value of their work.

This is a serious problem, as the same study showed that 63% of CMOs said they believe marketing ROI “will become the most important measure of success over the next three to five years.” Reading between the lines, your job rides on your ability to prove ROI.

The first step to correcting this ROI problem is recognizing its root. From our perspective, struggles with ROI are the result of many interrelated factors, none of which can be considered in a vacuum. Here are some of the main reasons people tell us they have trouble proving ROI:

• So much of marketing is about building awareness. Technology is making measurement easier, but that doesn’t change the fact that a great number of the tactics we engage in are still aimed at building name recognition and a caché of goodwill toward our brands. Short of conducting comprehensive awareness studies (which are expensive and out of reach for many companies) it’s difficult to prove how much marketing is impacting consumer awareness. It’s even more difficult to tie that data to tangible results for a company’s bottom line.

• Too much data. It’s no secret that we’re in the middle of a data explosion. According to Google, more content is created every 48 hours today than between the beginning of time and 2013, and much of that content is about brands. Making sense of all of this data and communicating it in a way that makes sense from a business perspective is not an easy job.

• A changing environment. Before the Internet Age, measurement was fairly straightforward. We knew exactly which channels we had to pay attention to, and we knew how to reach our customers. Now, new channels are coming to the surface all the time, and we’re working with business models (and marketing plans) that are in a state of constant flux. This makes measuring ROI, and especially tracking it over time, a tall order.

While these challenges might seem insurmountable, we have a lot of ideas about ways you can ease the ROI pain, which we’ll share in upcoming posts.

For now, tell us: what’s your biggest barrier to proving ROI?

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