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Why measure web marketing performance?

I was honored to be asked to speak at this weeks MPM Forum in New York, focusing on Marketing Performance Metrics, one of the hottest ideas in marketing today. Regular readers of this blog know how important I find metrics in measuring search marketing (or any other kind of marketing), but I want to pass along what others are saying. It’s clear that the time for marketing measurement has come.


If you tend to look askance at marketers because they are rarely accountable for what they do, you’ve never met these marketers. I was surrounded by 100 of the top CMOs in the business, brought together by the CMO Council. Some of them have the popular new Chief Marketing Officer title, while others are still calling themselves the VP of Marketing, but they are all searching for new ways to measure the impact of what they do. Some, as you might expect, cut their teeth in direct marketing, where metrics are the lifeblood of the business. But many have grown up in Web marketing, co-opting the response rate and A/B testing mentality of their direct marketing forebears.
Geoff Ramsey, the CEO of eMarketer, explained why. While most forecasts for traditional mass media spending are up slightly or even flat, online marketing spending is projected to rise by a third in 2005. BtoB Magazine says that 68% of B2B firms plan to increase online ad spending. In short, online is where the growth is.
Ramsey theorizes that the rise in online spending reflects consumer weariness with traditional one-size-fits-all mass market advertising—consumers say that 59% of ads have no relevance to them. As consumer skepticism rises, marketers are scrambling to find an alternative—almost 50% of CMOs want an alternative to mass media. Many are turning to the Web, and not just for advertising. Marketers want to get customers “involved”—Benjamin Moore’s Personal Color Viewer allows consumers to “paint” virtual rooms that look like their room at home, while choosing the exact tint of Benjamin Moore’s paints. Other marketers are increasing leads from their Web sites with elaborate video and other streaming media presentations. Clearly, some companies are experimenting with cutting-edge techniques.
And it’s not just consumers that are skeptical. Increasingly, CEOs and CFOs are asking hard questions about the level of marketing spending. Jim Lenskold, President of Lenskold Group, spoke of a rising “credibility gap” for marketers who can’t show the business value of what they do. So how do you convince a doubting CEO to invest in newfangled ideas such as Benjamin Moore’s Web site? These CMOs said you need metrics. Compelling numbers that show the payback on the investment.
But those numbers are rarely available, says a survey from Lenskold Group and MarketingProfs.com: 80% said marketing metrics are not where they should be, and they felt that a stunning 10-25% profit improvement awaited those who could get the proper measurements in place. According to CMO Magazine, one-quarter of CMOs can’t measure marketing impact at all because no MPM systems are in place.
So, it’s clear that marketers think metrics are critical to driving budget increases from doubting CEOs and CFOs, but are they right? Ramsey quoted a Blackfriars Communications study that showed that marketers practicing MPM got 27% increases in their budgets while those who did not received paltry 3% boosts.
OK, so if you’re convinced that it works, how exactly do you pull it off? We’ll tackle that in a future blog.

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Mike Moran

Mike Moran is an expert in digital marketing, search technology, social media, text analytics, web personalization, and web metrics, who, as a Certified Speaking Professional, regularly makes speaking appearances. Mike’s previous appearances include keynote speaking appearances worldwide. Mike serves as a senior strategist for Converseon, an AI powered consumer intelligence technology and consulting firm. He is also a senior strategist for SoloSegment, a marketing automation software solutions and services firm. Mike also serves as a member of the Board of Directors of SEMPO. Mike spent 30 years at IBM, rising to Distinguished Engineer, an executive-level technical position. Mike held various roles in his IBM career, including eight years at IBM’s customer-facing website, ibm.com, most recently as the Manager of ibm.com Web Experience, where he led 65 information architects, web designers, webmasters, programmers, and technical architects around the world. Mike's newest book is Outside-In Marketing with world-renowned author James Mathewson. He is co-author of the best-selling Search Engine Marketing, Inc. (with fellow search marketing expert Bill Hunt), now in its Third Edition. Mike is also the author of the acclaimed internet marketing book, Do It Wrong Quickly: How the Web Changes the Old Marketing Rules, named one of best business books of 2007 by the Miami Herald. Mike founded and writes for Biznology® and writes regularly for other blogs. In addition to Mike’s broad technical background, he holds an Advanced Certificate in Market Management Practice from the Royal UK Charter Institute of Marketing and is a Visiting Lecturer at the University of Virginia’s Darden School of Business. He also teaches at Rutgers Business School. He is a Senior Fellow at the Society for New Communications Research. Mike worked at ibm.com from 1998 through 2006, pioneering IBM’s successful search marketing program. IBM’s website of over two million pages was a classic “big company” website that has traditionally been difficult to optimize for search marketing. Mike, working with Bill Hunt, developed a strategy for search engine marketing that works for any business, large or small. Moran and Hunt spearheaded IBM’s content improvement that has resulted in dramatic gains in traffic from Google and other internet portals.

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