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Pressure for metrics mounts on marketers

The CMO Council outlines the top 10 technology spending priorities for marketers as they face increasing pressure to justify spending.

Results from a recent survey of marketing professionals should come as no surprise -- marketers' top challenge in 2007 is to quantify and measure the value of their programs and investments.

"There's certainly ever more attention being paid to quantifying what it is marketers spend their resources on," said Brian Regan, senior vice president of the CMO Council, a Palo Alto, Calif.-based organization. "There is an increased demand coming down from senior levels, the CEO particularly, to quantify all aspects of ROI across the entire marketing organization." @33938

The CMO Council surveyed 350 marketers in the fourth quarter of last year about their priorities for 2007. Respondents said their top challenge is to quantify and measure the value of marketing programs and investments. That was followed by a desire to improve their efficiency and effectiveness and, finally, growing customer insight and conversations.

Justifying spending to senior management is a continual struggle for marketers, and pressure is only mounting, the CMO Council says. In fact, the average tenure of a chief marketing officer is less than two years, according to past studies. Marketers are responding with new metrics and measurability programs, the report states, but finding the right set of metrics is a difficult task.

"It's typically driven by the type of organization or business they're engaged in that's driving the metrics they may be employing," Regan said. "It's an evolutionary process. There are so many components, from advertising to email marketing. It's evolutionary but certainly it's inexorable." @33939

On the bright side, marketers are getting more funding. According to the report, 65% say their budgets have increased for 2007, with 20% seeing no change and 15% losing budget. Of those who saw an increase, 14% said their budget would grow by more than 20%.

When that spending turns to technology, marketers are looking long and hard at marketing performance dashboards, according to the report. That was the top marketing automation application that respondents intend to deploy this year, followed closely by email campaign management, which is favored by smaller organizations.

"Marketers need to get more laser-focused on reaching the customer, and technology is increasingly allowing the marketer to cut it down very fine to a demographic standpoint -- reaching subsets of customers," Regan said.

Analytics and customer intelligence tools are also being targeted by companies with more than $500 million in revenues, while smaller companies are focused on viral word of mouth. All companies indicated plans to spend on CRM and lead generation and qualification technology, according to the report.

Marketers who have focused on improving customer profitability and tracked and measured their success have the ear -- and the support -- of their CEO, according to Regan. That is winning them the budget to continue those efforts with the improved technology now available.

"Those that are indoctrinated to marketing performance measurement, that have created a culture of MPM from the manager to the EVP or CEO level," Regan said, "then that CMO or senior marketer has buy-in from the C-level to think strategically about how to continue to employ CRM tools and technologies, including analytics and customer intelligence, and extract more marketing spend year over year to improve retention and customer profitability."

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