Why CEOs Should Care About Marketing Attribution
Where is your investment in marketing adding revenue to your company’s bottom line — and where is it losing revenue?
This is a critical question for today’s marketing leaders. But it’s also a critical question for CEOs. The answer can be found in advanced marketing attribution processes — also known as revenue attribution.
This function is logically within the responsibilities of a marketing operations resource. However, companies need the support of the CEO to deploy a successful marketing attribution platform. Here’s why.
Why Revenue Attribution in Marketing?
First, let’s overview the purpose and potential of revenue attribution. It is the art and science of assigning revenue value to your marketing activities. In other words, it’s having the ability to determine exactly which marketing efforts yield the best or worst revenue results.
The leading value of revenue attribution is that it provides directional accuracy on which touchpoints are impacting revenue generation and which are not. In other words, which touchpoints create the intended result and which don’t. With this insight, marketing teams can invest more in successful touchpoints and abandon or fix broken touchpoints.
The goal is to have a buyer’s journey that is successful at every touchpoint. In this way, leadership knows where its marketing investments are positively impacting the bottom line.
Without an advanced level of attribution insight, marketing’s contribution to revenue generation can be either underrepresented or misrepresented. This impacts a company’s bottom line because without it you are not able to correctly measure how effective marketing activities are at contributing to revenue.
Revenue Attribution in Action
Here’s how revenue attribution looks in a simplified hypothetical example:
- Your marketing team spent $80,000 on LinkedIn ads last quarter.
- The ads generated 200 leads.
- Of those 200 leads, 20 converted into new opportunities.
- Of those 20 opportunities, five became closed-won for a total of $500,000 in revenue.
- Now you can say that your LinkedIn ads from last quarter influenced $500,000.
- With this example in mind your ROI would be $500,000 ➗ $80,000 = 625%.
Caveat: This marketing revenue tracking example only works if you can correctly attribute a lead’s marketing interactions with the correct marketing channel. In this case, the marketing channel is LinkedIn advertising. However, it’s highly likely the leads that were created from LinkedIn during the last quarter also had other marketing interactions with the company, such as an email campaign, an event, or additional social media interactions. Only a robust revenue attribution program is capable of tracking and analyzing attribution at a micro level. So how do you get there?
Revenue Attribution Has Matured
Historically, CMOs could only formulate a general idea of where their investments were getting the greatest returns. But that weakness has been overcome with the advent of more sophisticated ways to measure marketing’s impact at a granular level. This is thanks to advances in revenue attribution technologies and analytics.
Yet, most companies have not deployed these advanced attrition solutions. As a result, they still cannot pinpoint the economic impact of their marketing activities at a micro level.
This is a huge lost opportunity — especially in today’s marketing and sales world. Today, the average buyer journey has eight to 12 touchpoints with the company before making a purchase — from the website to social media to white paper downloads to analyst reports. If marketing leaders aren’t spending their budgets where it counts to propel their ideal customer profiles (ICP) forward on the buyer’s journey, the result is lost sales and wasted marketing dollars.
The Power of Revenue Attribution
Revenue attribution can deliver significant financial benefits, according to a study commissioned by Google. It found that best-in-class digital marketers gain 30% greater cost benefits and a revenue impact of up to 20%. One of the six best-in-class practices is applying attribution to marketing investments.
Despite its potential to generate the greatest return on every dollar that companies invest in marketing, only 36% of marketers have a strategy in place for revenue attribution. What’s more, one-quarter admit to having no plan for building an attribution strategy.
That’s a very low percentage considering the power of revenue attribution. It’s likely these companies do not have either a CEO or marketing leader championing the move to attribution.
However, this likely explains why 50% of CMOs struggle to prove their impact on revenue. With advertising prices on the rise and the buyer’s journey becoming increasingly digital, there’s never been a more critical time for marketing leaders to connect the dots between touchpoints and revenue.
This is where CEOs are critical.
CEO vs. CMO Attribution Responsibilities
To launch an effective revenue attribution program, CMOs and other marketing leaders require the support of their CEOs. Here’s how the responsibilities breakdown.
- Set the overall business objective
- Ensure the measurement strategy is in alignment with business objectives
- Support attribution integration across silos, including sales, finance, IT, and marketing
- Approve the attribution budget
- Assess the ROI of the attribution initiative
CMO responsibilities (including marketing leaders, such as VPs)
- Take ownership, including advocacy, implementation, and guardianship
- Understand how marketing attribution integrates with business objectives
- Make and implement strategic measurement decisions
- Continue to iterate and optimize strategic measurement decisions
- Ensure the marketing ops personnel is put in place
- Manage the attribution budget
- Report back to CEO and the sales team
Beyond the CEO
It’s not just the CEO who must be supportive of launching a revenue attribution initiative, but also the entire leadership team. To realize this value, the attribution initiative requires alignment and integration across several functions — for example, the marketing team, the IT team, and the marketing budget team.
While the CMO and marketing team drive the initiative, they must be able to easily interface with other leaders in the company. If they can’t, it will be difficult for them to drive an effective revenue attribution initiative forward.
What’s more, without alignment across the C-suite, the entire marketing attribution initiative will fail to gain traction. The executive leadership must agree that revenue attribution is a worthy undertaking and investment. The departments must work collaboratively to define objectives, analyze data, share information, and create short- and long-term successful sales strategies.
Success Starts at the Top
Every team and department has its own metrics and KPIs related to its responsibilities. But revenue is the one metric that matters to every department — especially the C-suite.
Today’s marketing departments need to be empowered to deploy attribution systems that are capable of tracking marketing’s impact in a way that truly matters to an organization — revenue. This is the only way they can create marketing programs that optimize revenue generation with every investment made in touchpoints along the buyer’s journey.
To execute an effective marketing revenue attribution program, CMOs can’t do it alone. Success starts at the top — with the full support of the CEO.
Ready to launch revenue attribution?
Do you have the resources in-house to implement a revenue attribution initiative in your marketing department? Interim marketing leaders from Cortado Group work with our private-equity-owned clients to launch impactful revenue attribution processes. Contact us to discuss our interim leadership services today.