Commentary

Brands Find Less ROI Accountable In 2016 Compared With A Year Ago, Study Shows

Marketers in charge of advertising budgets find that the complexity of technology makes it increasingly difficult to prove and measure return on investments (ROI). Only 10% of C-level executives participating in a 2016 survey say more than 75% of their advertising and marketing budget is accountable to ROI -- down from 40% in 2015.

The Leapfrog Marketing Institute study -- 2016 Planning Report - Evolving Strategic and Financial Plans for the Always-On Consumer -- released Thursday shows a dramatic drop in accountability for marketing budgets. Jason Wadler, Leapfrog Marketing Institute chair, and Leapfrog Online EVP, says that aside from complex technology, social marketing -- which continues to attract a chunk of the budget -- makes it difficult to understand the return and track every dollar spent against campaigns.

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Cross-channel marketing also continues to throw a wrench in tracking and measuring ROI. "Marketers are asking themselves how to start going into different media channels and connect offline results to online," Wadler says. "We know tracking tools are getting better. We also know the C-suite is pushing toward ROI accountability, but we don't know what's happening to make marketers feel less accountable and less confident in their ability to deliver this ROI."

He said this may just mean that last year marketers thought they could track more than they actually could.

Leapfrog's 2016 Planning Report -- fielded in January and composed of about a dozen questions -- focuses on how marketing executives are evolving their strategic and financial plans to become more consumer-centric. This year’s report analyzes trends related to marketers' overall priorities, the impact of digital and mobile on spending, and how Millennials influence budget planning. 

Mobile marketing initiatives have become a priority, and 84% of marketers continue to integrate them into a larger marketing budget, per the report. This is part of a focus on customers. In fact, 60% of survey respondents built their budgets with a primary focus on the customer rather than product or service lines or media channels.

Nearly 60% of survey respondents said millennials remain a target segment for their business. Of the group, 56% said targeting Millennials changes how they spend budgets. 

When asked how much of their budget is allocated to Millennials, 54% said between 10% and 25% of their budgets was spend on Millennials. While that may seem low, given that Millennials account for about 25% of the U.S. population, but marketing spend does not take into account the impact this age group has on marketing resources and focus. Only 4% of marketers allocate more than half of their budget to target millennials, according to the study.

1 comment about "Brands Find Less ROI Accountable In 2016 Compared With A Year Ago, Study Shows".
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  1. Ed Papazian from Media Dynamics Inc, March 17, 2016 at 3:59 p.m.

    Laurie, the scale of the difference in the percent of execs who think 75% or more of their advertising-marketing budgets is "accountable" between this year and last year is so great it calls into question the validity of both  studies. What happened in one year to cause such a change? More likely, the composition of the two samples was not the same.

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