09 Sep Marketers are Struggling to Calculate ROMI
According to a study from Allocadia, a marketing agency in Vancouver, Canada, 47% of marketing leaders in North America struggle to calculate return on marketing investment (ROMI), even though it is a key performance metric for their business.
Why do marketers struggle to determine such a critical metric?
Marketers Don’t Trust Their Data
According to the report, 61% of marketers attribute this problem to a lack of trust in their data. Gathering good data is critical for calculating ROMI and drawing actionable insights. But not tracking the data or tracking the data sporadically leads to inaccurate calculations and untrustworthy insights.
Business Functions Disagree on How to Calculate ROMI
Another reason marketers struggle to determine ROMI is misalignment between the sales, finance, and marketing functions. They operate in silos instead of collaborating and understanding how each function drives growth and profit. The study found that 43% percent of marketers do not believe all three functions agree on how to calculate ROI.
Calculating ROMI is simple: ([Incremental] Profit Margin / [Incremental] Marketing Investment – 1 ) *100%
But the lack of strategic alignment between the departments prevents marketers and the company, from accurately turning the data and the analytics into actionable insights that inform decision-making.